Blog: Ontario Could Get Equalization Payments Within 2 Years

by Apathy is Boring Volunteer jactrav — April 29, 2008

TD economic analysts report that the province of Ontario could qualify for equalization payments from the federal government by 2010. This prediction is the result of the western provinces’ booming economies that are leaving Ontario in the relative dust, as the cost of commodities continues to soar.  In fact, TD is already projecting that the province will only barely manage to avoid a recession in the coming year.

The equalization program was originally designed to level the playing field for Canada’s provinces so that they could give their residents equitable services and so each could compete fairly on the national level. Money was set aside by the federal government for transfer to the  “have-not” provinces, traditionally small provinces with weaker economies and minimal taxation bases. Since in a few years billions of dollars could begin to be transferred to Ontario, one of Canada’s largest and most industrialized provinces, one could say the country’s economy might be entering a whole new era.

Reading news of Ontario’s relative economic decline, as well as the flood of stories about a potential economic recession south of the border, a person might begin to worry about what lies ahead. With the exception of some of those in the commodity-rich western provinces, and Alberta especially, these economic trends could have grave consequences for many Canadians, including you. As the economy changes, the equalization program will try to minimize how hard financial problems will hit individual provinces. So are you happy to live in a country that has programs to promote collective well-being, even across borders? Or do you think life would be better in a political system where the provinces (and on another level, individuals) were left to go it alone?

Source:CBC