Wheels in motion to rework payments to budget-strained provinces, Morneau says

OTTAWA -- Federal Finance Minister Bill Morneau is ordering his officials to come up with ways to change how Ottawa hands out money to cash-starved provinces -- hinting changes could be coming soon -- but left the details to be determined in 2020. Resource-rich provinces like Alberta and Saskatchewan had put proposals on the table at Tuesday’s finance ministers meeting to expand the fiscal stabilization program that helps provinces and territories facing sudden holes in their budgets, such as those created by cratering oil prices. The program, which has not changed since 1995, provides help to provinces facing a year-over-year decline in non-resource revenues, but the money available to eligible provinces is capped at just $60 per resident. The provinces called for changes to the program’s spending caps, lowering qualifying thresholds for different types of revenue, and retroactive payments for the last five years. Morneau said the Finance Department will analyze the various options and come back with suggestions for potential changes in January. But he also suggested that whatever his officials say will be a step in a longer path towards updating the program. “We have multiple demands on the federal government as every one of the finance ministers behind me have as well. We talked about that reality today, we talked about the reality that we all face fiscal constraints,” Morneau said at a closing news conference. “That analysis will be done, it will be done in a fair way, and then we’ll have to take a close look at how we respond. That is the challenge that we all face in dealing with issues that are important to Canadians.”