Equalization formula a hot topic at meeting

For the first time in a decade Ontario will not receive an equalization transfer from Ottawa, prompting the province’s finance minister to join calls for the federal government to review how the program is set up.

Canada’s finance ministers are in Ottawa for the second of their two yearly meetings, which started with a working dinner at an Ottawa hotel Sunday night.

Just ahead of that dinner, federal Finance Minister Bill Morneau released publicly the amount of money Ottawa will transfer to the provinces and territories in 2019-20, including nearly $20 billion in equalization.

It’s up almost $880 million from the current year, but that amount will be split among just five provinces — Quebec, Manitoba, Nova Scotia, Prince Edward Island and New Brunswick. For the first time since the 2008 recession put Ontario on the have-not province list, Ontario is not among them.

Quebec on the other hand is getting more than $13 billion from the program, an increase of nearly $1.4 billion.

Technically Ontario’s economic growth was good enough in 2016-17 to push it out of have-not status, when a province’s finances are considered lower than average and qualifies them for equalization. However, because of the way the program works, Ontario still received $963 million in 2018-19.

The government was well aware it would not be qualifying this year for equalization but Ontario Finance Minister Vic Fedeli said it’s further proof of why the equalization program needs an overhaul. He said Ontario will contribute $8 billion into equalization, and won’t get anything from it.

Alberta, Saskatchewan and Newfoundland have also called for changes to the formula.