Equalization review urged

Auditor general’s analysis of program sought ‘No controls,’ Chamber of Commerce head says

Auditor General Sheila Fraser should immediately review the “ fundamentally flawed” federal equalization program, says the Ontario Chamber of Commerce.

In a 50- page study entitled Fairness In Confederation released yesterday, the influential business group said the wealth- sharing plan undermines Ontario, something which could cripple the Canadian economy. Chamber president and CEO Len Crispino said an investigation by Fraser would “ further put pressure on the federal government” to address the inequity inherent in the 48- year- old program.

“ Assuming the auditor general proceeds with this audit, we believe that what she will find ( is) a mechanism in place, which is not accountable,” said Crispino, whose group released the first part of its report in August and followed up with the recommendations.

“ There are no controls, there are no standards, there are discretionary decisions, which are made day to day on various program spending and we think this is not the way to run a country,” the chamber president said.

“ We think it’s not only detrimental to Ontario — and the ‘ have not’ provinces by the way — but to all of Canada,” he said, noting Ontario itself could become a have- not province by 2010 unless the problem is addressed. An aide to Fraser said from Ottawa that the auditor general had just received the chamber’s request and she would be considering whether it falls within her mandate for a probe.

Crispino also called for an end to “ side deals” between the federal government and individual provinces that undermine the program, under which “ have” provinces like Ontario and Alberta subsidize “ have nots” like Quebec and Atlantic Canada. Prime Minister Paul Martin inked such an accord with Newfoundland and Labrador and Nova Scotia earlier this year.

“ Why keep pumping money into a system that is not accountable ( and) doesn’t appear to work?” Crispino asked.

Ontario Minister of Intergovernmental Affairs Marie Bountrogianni praised the report, saying she’d welcome the auditor general’s intervention.

“ I’m always for accountability and we are willing to work with the federal government in any way to achieve that accountability,” said Bountrogianni, adding that fiscal imbalance could be a major issue in the coming federal election campaign. The chamber’s study came one day after Ottawa disclosed that a Commons committee studying equalization was delaying its report by five months until March — possibly after an expected federal election.

In China on a trade mission, Premier Dalton McGuinty, who has been crusading against what he calls the $ 23billion gap between what Ontarians send Ottawa and what is returned to the province, said he doesn’t have a much “ faith” in the federal committee.

“ It is largely a one- sided conversation. There is no opportunity for public input. I just don’t have a tremendous amount of faith in the exercise anyway,” McGuinty said in Shanghai.

“ The better thing for us to do . . . is to take a look at a ( royal) commission ( on fiscal imbalance). That is the most intelligent, thoughtful thing that we could do,” he said.