Dalton McGuinty’s been fighting for a more equitable share of federal resources for a long time now—did you know there’s a whole, official Ontario government website on this topic? I didn’t, until today, but it is informative. For example, while I already knew that Ontarians got considerably less per-person health care funding than other Canadians, I didn’t realize that Ontarians have to work longer to qualify for EI, and are eligible for fewer weeks of payout.
So twisted is the equalization formula, in fact, that even even if Ontario were to become a poor, “have-not” province, its residents would continue to be net contributors to the system. In other words, if Ontario’s economy were to tank to the extent that it qualified for equalization payments, that additional money would actually come in part from — Ontario.
So no wonder some argue that the system makes Ontario the “patsy” of confederation.
Now, much as I’d like to, I can’t really blame all of this on the Conservatives. They didn’t write all these rules, it is a long-standing problem, and I’ll accept that these things are complicated and expensive and can’t necessarily all be fixed in two years.
I’m just not so sure, given their track record, that they’d start fixing them in the next four years, either.
You will recall Flaherty helpfully saying that Ontario is the “last place” that businesses would want to invest, as though he were any kind of example to follow in tax policy.
And you might not recall this, but they’re also trying to pass Bill C-22, which tries give Ontario less representation in Ottawa. The proposal gives BC and Alberta 1 new federal seat for every 100,000 increase in population, while Ontario gets half that — one new seat per 200,000 increase. Hmm. Couldn’t be because the westerners are more inclined to vote Conservative, is it? No, it just means that McGuinty is a “small man of Confederation”, according to Conservative House Leader Peter Van Loan.
Cultureguru's Weblog 
September 22, 2008 at 5:02 pm
Ah, equalization – my favourite topic that no one gets right!
Actually, the Conservatives are too blame for Ontario maybe qualifying for equalization. They changed the program in 2007 from the old 5-province formula (which didn’t include the economies of Alberta or the 4 Atlantic Provinces) to the 10-province formula, which does give a fairer national standard benchmark than the old 5-province formula did, but it also raises that national standard a lot thanks to including Alberta (and also NL). So it’s not so much that Ontario’s economic performance has declined, it’s just that the equalization standard has gone up – significantly. I’m not saying ON’s economy isn’t hurting, but the main reason why it’s closer to qualifying for equalization is because the bar has been raised thanks to the Tories changing the formula.
And don’t forget that ALL provinces are net contributors to equalization in the sense that the money for equalization comes from the federal gov’t’s general revenues – money it gets from personal and corporate taxes, GST and other taxes, duties, etc. So all recipient provinces are getting their own money back, so to speak.
Also, EI has always varied by region – remember the old “lotto 6/49” jokes in the Maritimes – where fish plant workers would work 6 weeks to qualify for 49 weeks of EI? Regions with higher unemployment rates get better and longer EI benefits because there simply aren’t as many job opportunities out there, while regions with lower unemployment rates get shorter benefit periods because the assumption is you have a better chance at finding another job. It’s not an Ontario-specific issue.
The reason why health care benefits weren’t paid out on a per capita basis was because, again, it was assumed that the bigger, richer provinces had an easier time in generating their own revenue for health care given their larger tax bases (compared to say, PEI). That is set to change in 2011 or 2012 (can’t recall exactly) – McGuinty just wants it to change sooner.
I’m not saying that McGuinty doesn’t have a few good arguments, but not everything on their website is 100% accurate either. I really hate reading op ed pieces on equalization – few people really understand how it works and it drives me crazy that there is so much misinformation about the program out there…
September 23, 2008 at 12:04 am
But Ontarians pay the same for EI as those with better benefits? Patsys, I tell you!
Just kidding. Yes, in my bit of research about equalization, I had to conclude it was a very complicated topic! And, in hindsight, maybe I should have just stuck to the “not giving Ontario enough seats” thing. Because that’s more clearly wrong — plus I understand it!