Monday, December 15, 2014

Federal Transfers Up $1.25 Billion for Ontario

The Globe and Mail has the details on the feds giving $1.25 billion more to Ontario for transfer payments. I assume that's for the next fiscal year and not this one where Ontario is projecting a $12.5 billion dollar deficit. So that's good news for next year's Ontario deficit which is projected to drop a lot anyways.

The federal transfers have bounced around a bit of late for Ontario (a have not province for several years now):

"The revelation marks a sharp change from this time last year, when Ontario Finance Minister Charles Sousa reacted furiously to what he said was the surprising news that Ontario would lose $640-million in transfers. The new increase more than offsets last year’s controversial decrease, bringing total federal transfers to Ontario to $20.4-billion in 2015-16, up from $19.2-billion last year and nearly double the $10.9-billion transferred in 2005-6."

"Ontario began receiving equalization in 2009-10 with a payment of $347-million. It reached a peak of $3.3-billion in 2012-13, dropped to $2-billion last year and will grow to $2.4-billion in 2015-16."

So some of the deficit problems for Ontario last fiscal year (2013-2014) were due to equalization transfers going down by $1.3 billion over the year before. Ontario's still a have not province, although it will be interesting to see the effects of oil cratering on Alberta and Saskatchewan and what that effect has on equalization. Somebody has to pay the have not provinces.

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