Ontario goes from ‘have’ to ‘have-not’

It is now official - Ontario is a 'have-not' province for the first time in Canada’s history. Ontario will be receiving its first ever equalization payment from Ottawa in the amount of $347 million.

It was 51 years ago that Ottawa created equalization payments to help poorer provinces afford the same level of public services as wealthier ones. The goal was to better enable struggling provinces to hold the line on taxing their citizens.

On October 22nd, the Ontario Government released its economic statement which revealed a half billion dollar deficit. But only seven months earlier the provincial ledger showed $5.6 billion in excess revenue and $800 million in reserve. There are many questions, but the big one remains unanswered: where did all this money go?

The Bank of Nova Scotia recently released a forecast which projects that Ontario’s economy will contract on an annualized basis this year and next at 0.1 per cent and 0.9 per cent respectively. The TD Bank warns that Ontario’s deficit risks swelling to $4.7 billion in 2009 if spending continues at the current rate.

This is the same government that, in 2004, slapped people with the largest tax hike in the history of Ontario. But instead of saving some of this new tax revenue for a rainy day, this government spent every last penny. Who honestly thought the good times would last forever? 

Allegedly, the Ontario government was so blind to the potential of ‘have not’ status that the Premier did not object to changes to federal changes, that now sees Ottawa cutting equalization payments by $2 billion. Had this government been on the ball, Ontario could be receiving far more than $347 million.

Ontario has long been considered the economic engine of Canada but there is now a new world order. While Ontario joins the welfare rolls, Alberta, Saskatchewan, British Columbia and even Newfoundland are thriving.

Symbolically, this is a sad time for the ‘once-great’ Province of Ontario – a province that has gone from first to worst. My colleague MPP Bob Runciman said it best: "I think it's a blow to our psyche in this province; it's a blow to our egos, an historic and dispiriting day. When Newfoundland calls you a poor sister in Confederation, it's time to hang your head."

Premier McGuinty now has the dubious distinction of being the first Premier to steer Ontario into ‘have-not’ status. It is upsetting to witness the lack of regret or remorse this government has for putting Ontarians in this precarious situation.

As residents and taxpayers we deserve to know what Premier McGuinty is doing to help get Ontario’s economy up off its knees. To date, we have had no answers -- just a great deal of finger pointing.

How long will Ontario be collecting Ottawa’s pogey? Where are the tax cuts? Where is the plan to create more jobs? Until this government comes up with a plan to address this crisis there will be no new investment and we will remain at a competitive disadvantage.

The wheels have fallen off Ontario’s economy. Nobody knows how long it will take Canada’s most populous province to recover and reclaim its status as the economic engine. Until then we are down and out and will be perceived as the poor cousin. This is truly sad.