Nov 04 2008
The Deterioration of Ontario…
Here are two articles (thanks for the heads up, CM) from today regarding the state of Ontario. We are in this position in Ontario due to a large collection of Political Arguments for Birth Control, many of whom are cited in the following articles. Yet now they are trying to position themselves as something else or are trying to distance themselves from their role in the slow death of our province…
The era of Ontario as Canada’s economic engine sputtered and lurched to an ignominious end today while Newfoundland and Labrador, for too long the unwitting butt of an ongoing national joke, stepped into the economic spotlight to celebrate its status as the country’s newest “have” province.
As Finance Minister Jim Flaherty officially moved Canada’s largest province to the have-not side of the national ledger, Newfoundland Premier Danny Williams took time to declare the economic “Newfie joke” officially over. The new found status of both provinces was made clear following a meeting between Federal Finance Minister Jim Flaherty and his provincial counterparts in which Ottawa redrafted the rules of equalization and tied future funding for the have-nots to the country’s economic growth.
Ontario’s fall is worrying and the state of the economy suggests the province will collect the payments for “some time,” said Flaherty, whose Whitby-Oshawa riding, which plays host to a General Motors plant, has been hard hit by slumping auto sales. “Of course it worries me… I don’t rejoice at this,” Flaherty said after emerging from the half-day meeting at a hotel at Toronto’s airport. “Regrettably, I expect that Ontario will be in the equalization program for some time to come. The manufacturing sector, the auto sector are weak. American consumer demand is weak.”
Equalization payments are meant to ensure that have-not provinces are able to provide comparable services at taxation levels comparable to those in wealthy provinces. Ontario, which qualified for equalization in the late 1970s but never collected, will receive $347 million next year. Newfoundland and Labrador, for its part, said Monday it had officially become a “have-province” – a year earlier than expected and for the first time in the province’s history. “I don’t think the `Newfie joke’ is there anymore,” said Williams. “I think we’re now an example to our fellow Canadians about how it can be done and how to work your way through hardship.” While Newfoundland and Labrador’s fortunes are based on offshore oil revenues, Ontario has been hard hit by job losses in the manufacturing and auto sectors.
Alberta’s top politician said his province is poised to assume Ontario’s former title. “We are the engine of the Canadian economy,” said Premier Ed Stelmach, who will soon head to Europe to promote the oilsands. Alberta, Saskatchewan and British Columbia are the other provinces that won’t receive equalization.
Ontario Finance Minister Dwight Duncan disagreed with Flaherty’s timeline, questioning just how long Ontario would qualify given the new arrangement. “It looks to us, at first glance, like we won’t qualify for very long based on the constraints they put on it,” he said. Duncan also said the provincial finance ministers were only given details of the new plan shortly before the end of the meeting, which didn’t give them enough time to fully digest what the changes meant for each province. “Every bit (of funding) helps,” said Duncan, less than two weeks after announcing Ontario, once the country’s economic powerhouse, will post a $500-million deficit this year.
Among the changes discussed Monday, Flaherty is promising a six per cent increase in health and three per cent increase in social transfers for all provinces. Equalization will continue to grow year after year, Flaherty said, but that it cannot be sustained at the current 15 per cent growth each year. It will now be tied to real economic growth – a concept which Flaherty said Canadians will understand. “This is a benefit for Ontario,” he said, adding that under the old rules Ontario would have received $100 million less.
“The system changes now, because Ontario now, for the first time in the history of our country, is going to be a recipient, so the calculations are different.” Under the new equalization plan, Quebec will get $8.35 billion, Manitoba $2.1 billion and P.E.I. $340 million in transfer payments. Nova Scotia will receive equalization payments of $1.57 billion and New Brunswick $1.69 billion. Quebec Finance Minister Monique Jerome-Forget expressed concern for Ontario, saying in French that “if Ontario suffers, Quebec suffers because they are a big export and business partner.” Jerome-Forget said she didn’t have enough information to gage how Quebec will be affected by the changes, but said she was “sympathetic” to the argument that 15 per cent a year growth wasn’t sustainable. “The story now is, how did he reach those numbers and what does it mean in the future?” she said.
For Saskatchewan, which is booming despite the country’s economic woes, the main issues of interest were labour market and labour availability. “We’re investing heavily in infrastructure, so the discussions on expediting federal-provincial relationships on building Canada are important,” said Rod Gantefoer, Saskatchewan’s minister of finance. “From Saskatchewan’s point of view, we’re glad to be on the other side of the equalization formula. “It was a prideful day for us and we’re going to continue to make sure that our economy grows so that we can stay as contributors to the program.”
Monday’s meeting was meant to lay the groundwork for a First Ministers’ meeting on the economy with Prime Minister Stephen Harper in Ottawa next Monday. That meeting will prepare Canada for an economic summit of the 20 leading economies in Washington on Nov. 15. The finance ministers have agreed to reconvene for another meeting by mid-December.
Turning the page on the ‘common sense’ legacy
Only once was the name of Mike Harris explicitly mentioned, but the government he led was referred to so often, usually with a teeth-rattling shudder, that it haunted the room like the ghouls and goblins of a Halloween night. Yesterday, the Ontario government announced it had reached agreement with provincial municipalities to upload the cost of welfare, court security and prisoner transportation over the next 10 years. By the end of that decade, with those changes added to uploads of the Ontario Drug Benefit and Disabilities Support programs announced earlier, a total of $1.5 billion in annual spending will be diverted so towns and cities can devote their property tax revenues to vital local services.
A posse of mayors sharing the stage with Municipal Affairs Minister Jim Watson and Finance Minister Dwight Duncan could hardly have been more lavish in their praise and gratitude. The exercise, they suggested, drove a stake through the unlamented corpse of the Common Sense Revolution, which had left as one of its chief legacies the passing off of intolerable fiscal burdens on local governments. “We have turned the page on the years of downloading and contempt shown to the municipal sector,” Watson said. Mayor David Miller said burdening municipalities with the costs of delivering provincially mandated income-support programs was, “simply put, wrong … Today – together – we have righted this lingering wrong.” “The tide has changed,” crowed Mississauga’s Hazel McCallion. “We have turned the corner.”
Peter Hume, president of the Association of Municipalities of Ontario, said the direct result of downloading in the 1990s was declining municipal services, deferred infrastructure investment and escalating property taxes. Yesterday’s agreement “turns the page on a dark chapter of provincial-municipal fiscal relations.” Watson said it was hard to overstate “the disdain and hostile relationship” that flared between the two during that dark age.
Harris’ campaign platform in 1995 had included only one vague sentence on municipal responsibilities. But once in office, he soon unleashed change as massive as it was ill-planned, “a dog’s breakfast” in the later assessment of the municipal affairs minister of the day.
Being fans of grand gestures, the Harrisites called it Megaweek. Over four days in January 1997, among many other policy announcements, they shifted to municipalities much of the cost of welfare, social housing, public health programs and rapid transit. The whole “disentanglement process” was supposed to be revenue neutral. It wasn’t. As much as the current ministers and mayors risked whiplash yesterday from patting themselves on the back for their – “landmark,” “historic,” “principles exactly right” – new deal, they also admitted the agreement is imperfect.
The immediacy and pace of the upload is not what all would have wished. Social housing was not part of the retrenchment package. Still, from the McGuinty government’s perspective, the deal is more than satisfactory. It is all but bulletproof when municipal partners are so solidly onside and helpfully acknowledging the pressures on the provincial treasury. And though the pace of uploading might be quickened in future, it won’t be slowed, Duncan said. Unless, he noted on the day of days for crypts opening, a new Harris-type government were to take over “and they want to go back to the way they used to do things.” There weren’t enough garlic cloves in the room.