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Jul 08, 2014

Oliver’s flawed facts: Ontario a net contributor to Canada, Ottawa’s assertions notwithstanding

July 8, 2014

Federal tinkering has cost Ontario $1.2-billion–more than other provinces

Federal finance Minister Joe Oliver wrote an opinion piece last week in this paper, in which he called Ontario’s concerns about federal transfer payments to the province “false and sad.”

Joe Oliver responds: Your facts are out of date
Matthew Mendelsohn takes issue with an op-ed I wrote pointing out that our government’s transfers to Ontario have been generous, fair and responsible to Canadian taxpayers. Interestingly, he confirms my central point

Minister Oliver is new to the job so there is time for him to find a new script. The one he is reading from is misleading and corrosive to the federation. His approach to Ontario is undermining the province’s ability to confront the real fiscal and economic challenges it faces.

Some corrections to Minister Oliver’s piece are required.

Only three provinces are currently net financial contributors to the rest of Canada: Alberta, BC and Ontario. In fact, according to the most recent federal numbers, the outflow from Ontario to other provinces is between $9-billion and $12-billion.

The contribution to inter-regional redistribution from Ontarians in the Equalization program alone is about $3.1-billion. This is larger than the outflow from any other province (Alberta’s outflow is second largest, distributing about $2.6-billion to other provinces).

Yet by bemoaning Ontario’s complaints – “Ontario was once a proud contributor to the federation,” writes the Minister – he perpetuates the myth that Ontario is currently being supported by other provinces.

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Release Date

July 8, 2014

Publication

Financial Post

Author

matthew_BW

Matthew Mendelsohn