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Friday, May 02, 2008

Ontario's Equalization Non-Disaster

How is it even possible that the good news story of Newfoundland & Labrador coming off equalization has somehow turned into catalyst for concern and near hysteria in some circles?

After 59 years of being a so called "have not" province one would think the news this week that Newfoundland & Labrador will no longer need equalization payments would be a good thing but in reading the headlines one gets the opposite impression.

Unfortunately Newfoundland & Labrador's announcement took place at the same time that financial analysts are saying Ontario could soon become an equalization receiving province. As with most things Canadian, when Ontario sneezes everybody listens and all else is quickly forgotten in the rush to find a tissue.

As a result, instead of cudos being offered, everyone from politicians to the media have gone on the offensive to protect poor little Ontario from those cruel people down East. CTV political reporter, Mike Duffy" even went so far this week as to accuse Premier Danny Williams of being "uppity" because he had the gall to say that he was glad his province was finally able to stop collecting federal support, and in doing so, allowing the system to better help those who needed support.

"Uppity" now there's a word you don't hear very often regarding Newfoundlanders & Labradorians. In fact the last time I recall hearing the word it was used in reference to individuals from a certain segment of the North American population that had been repressed for generations and had finally found a voice. I believe the exact term was, "That's one uppity...".

I won't finish the quote but believe me when I say that the "N" word used in that context wasn't Newfoundlander, though the sentiment was reminiscient.

Thanks to a perfect storm of high oil prices, a soaring Canadian dollar and a booming economy out west and in Newfoundland & Labrador Ontario is no longer at the top of the heap financially. Add to this the coincidental events of Newfoundland and Labrador moving off of equalization while Ontario moves in to replace it and the perfect scapegoat has been created for all that pent up Central Canadian anger. Who better than Canada's favorite whipping boy, er... Province, to take the heat.

According to reports, Ontario MPs are fuming over the situation and one columnist in an Ontario paper was quick to note that, "Newfoundland was always the place we pointed to as somewhere to go if we wanted to see our tax dollars at work".

Through all the noise the prize for twisting reality and spewing venom has to go to none other than the Premier of Ontario himself, Dalton McGuinty.

The Ontario Premier is telling anyone who'll listen, and apparently there are quite a few, that the reason Ontario is in such hard shape is because his province sends $20 billion more to Ottawa than it gets back in services. Money that is being used to support the rest of Canada.

Putting aside the simple geographical fact that Ottawa itself is a part of Ontario, McGuinty is still full of it.

To listen to the guy you'd think Ontario was on the brink of collapse. That bread lines were forming on every street corner and food was being flown in by Oxfam.

Calm down Dalton, things aren't all that bad.

In truth, the reason Ontario may become an equalization recieving province is because the new 10 province standard(adopted in consultation with the Ontario Premier)has raised the provincial average, pushing Ontario closer to the center line of "Have" and "Have Not".

In addition, though McGuinty would love to have people believe the opposite, in reality Ontario doesn't send $20 billion to Ottawa to fund social programs or equalization across the Country.

Federal revenues used for these programs come from the pockets of all taxpayers across the Country. It doesn't matter if you live in BC, Alberta, Ontario or in Newfoundland & Labrador, everyone pays the same federal tax rates. In other words, someone making 50K in Medicine Hat pays the same taxes as someone making 50K in Twillingate. It's these taxes that pay for equalization, not the Province of Ontario or any other Province for that matter.

The reason for the $20 billion discrepancy is simply that Ontario has more people paying federal taxes and a larger percentage of high paying jobs than many other places. That's not exactly the profile of a Province on the brink of collapse.

As one columnist for the Halifax Chronicle Herald recently put it, "...hold the cat food orders, Toronto.

...Mr. McGuinty says Ontarians pay too much to Ottawa. But we all pay the same federal tax rates, so Ontarians can only pay less if Ottawa returns more money through transfers.

Mr. McGuinty is really saying: Give me more transfers, but don’t call them equalization – that’s for have-nots."

4 comments:

Calvin said...

Ha Ha HA Ha ,Pardon me as I grab my knee."Yes", that was a knee slapper Myles to say the least.

As always when the proverbally s%#@ hits the fan everybody needs someone to blame.Thats typical Canadain politics.Instead of fixing the problem they constantly look to fix the blame.I can't help but wonder what was in Prime Minister Williams head when he ran head long into that fight.What does he hope to achieve,besides rubbing everybodys noise in the fact that Newfoundland and Labrador is now contributing to ,instaed of taking out.

I think the message is ,"without the rest of us.You really don't matter that much."

Still to go and more or less look for a fight is one thing that Mr Williams is famouse for.The message for canada I think is,"watch out.Here we come"

All in All Patriot, a very rememberable article none the less.Very well done ,Sir.

Anonymous said...

So much is being made of the possibility of Ontario becoming a 'have not' province. Is this a deflector or smoke screen for some unknown reason?

I doubt, like others doubt, that Ontario will ever take a payment from the equalization pot. Instead the extra monies that it will receive will be channelled to it in a roundabout way. That would be too degrading for Ontario to receive monies from equalization. Ottawa will save Ontario the embarrassment, and instead the amounts received yearly by Ontario through the different pots of monies will be increased substantially on the quiet and we will never have the details of what it receives.

I am sure most of us remember when Newfoundland and Labrador received its $2 Billion payment for the Atlantic Accord, monies that were owed it, and for which it waited
10 years to receive after its Oil was being pumped out of the ground and exported off to markets.

Ontario's Dalton McGuinty seized the opportunity at the same time and demanded and received a payment of more than $5 Billion dollars for Ontario. For what I don't know.

By the way what percentage of the Canadian tax payers' dollars go to Ontario simply for the upkeep of Ottawa, the seat of the Federal Government? That is a question that I would love to have an answer for. I know it is Billions. Yes Billions to upkeep infrastructure that the Canadian Tax payers paid Billions and Billions to put there in the first place. That is one aspect that very seldom gets spoken off, and then, of course, there is the remainder of Ontario which has many cities which collects Billions from our Canadian Tax payers’ dollars.

I wish there was an accounting done of every one of the Tax payer's dollars that gets spent by Ottawa, I bet what the province of Ontario gets would rival anything that is paid out through the equalization program to the 'have not' provinces.

I doubt though that we will ever get an answer to reflect the true accounting figure of what Ontario receives.

It seems to me that every politician in Ottawa, no matter from which province they hail from, is sworn to secrecy not to report anything they are privy to. If that wasn't so why did the province of Newfoundland and Labrador not get its fair share of the Federal Regional Offices, Military Bases and other Federal goodies which get handed out by Ottawa? Yes why would Newfoundland and Labrador's Federal politicians not want to take credit for bringing some of the big prizes back home and then getting a pat on the back or verbal accolades for it?

There should never be Patronage Plums stored in the larder of Ottawa. We know that they get used to keep people quiet. As a result some provinces lose. As far as I am concerned Newfoundland and Labrador lost big time. It lost its raw natural resources to the other provinces to be processed and it lost it human resource as well.

Anonymous said...

This sort of attitude toward NL is so common in Ontario and other places that it's sickening.

Just read what the leader of the provincial PC party in Ontario said in the legislature today and tell me it doesn't say it all:

"My question is for the Premier. Once again today, it has to do with the impending attainment of have-not status for the province, an embarrassing moment in this great province's history.

Yesterday, when the Premier of Newfoundland, Danny Williams, was asked about Ontario's economic plight, he said Newfoundland is prepared "to help our weaker sisters." That's where you and your taxing, spending and regulatory policies have brought this great rovince. We now have the Newfoundland Premier describing Ontario as a weaker sister. What's next, Ontario jokes? Are you proud of this legacy?"

How condescending is that. He might as well have said point blank, "We are better than Newfoundland and we don't need any help from that welfare bunch".

Welcome to the real Canada, it's amazing how quickly the claws come out when "their favorite whipping boy...er Province" gets "Uppity"

Anonymous said...

I know what you mean about Mike Duffy and the rest.

I had the same impression when I heard him say that yesterday.

Today Williams did an interview with Duffy and it got worse.

Duffy asked him if he was willing to "Stop taking money from Ontario" as a way of helping out that province.

Williams replied, rightfully, that there is a $13 billion dollar pot, the maritime provinces get money, Manitoba gets money and Quebec gets $8 billion of the 13. NL by comparison got 18 million this year.

Williams went on to say:

1. He's glad we are off equalization.

2. With us off there is a little more to go around to those who need it.

3. That he would support Ontario in their stand to get help from Ottawa with the Auto sector.

4. That he is proud we will be net contributors.

5. That he loves this Country.

Duffy responded by saying in his closing, "There you go, fighting words from the Premier of Newfoundland and Labrador".

Can you believe that?

There is no winning with those A-holes.