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Wynne says federal budget unfairly shortchanged Ontario by $641 million

TORONTO - Finance Minister Jim Flaherty made a deliberate decision to unfairly shortchange Ontario to the tune of $641 million in the federal budget, Premier Kathleen Wynne charged Wednesday.

"We're seeing a pattern of the federal government getting out of, I would suggest, the business of nation building, and particularly in this case turning its back on Ontario," Wynne said at a news conference with Ontario Finance Minister Charles Sousa. "We're here today to demonstrate that yesterday’s budget is part of that pattern."

The minority Liberal government claims funding cuts in the last eight years of federal Conservative budgets have cost the province billions of dollars.

Ontario will get 18 per cent of its revenues this year from federal transfers, the same percentage it received in the mid-1990s, but Sousa said that's still a cut.

"The level of funding to the province of Ontario is actually going down on a per capita basis," he said. "That's the fact."

A key bone of contention between the two governments is a cut in the equalization payments for Ontario because of it's improving economy. In previous years, there was an unwritten rule that the federal government would guarantee 'total transfer protection' to make sure a province didn't get less money.

Flaherty changed those rules without any consultation, and when Ontario would be the only province to suffer, said Wynne.

"The federal government made a decision to treat the government of Ontario differently than it had treated all the governments across the country in the past few years," she said.

However, Flaherty rejected Ontario's arguments and said the province's Liberal government apparently doesn't understand how the equalization program works.

"We have not reduced transfer payments to any of the provinces," he said.

Ontario contributes more than $100 billion to Confederation, which is $11 billion more than it gets back through federal transfers and equalization, and just wants to keep more of its own money, added Wynne.

"All we're talking about is having a fair formula that returns some of those dollars to Ontario," she said. "We're not going cap in hand to anyone."

The Harper government was willing to invest in Alberta's oil sands and large energy projects in Newfoundland and Labrador, but won't partner with Ontario to develop the huge Ring of Fire mineral deposit or meet its infrastructure needs, said Wynne.

"Minister Flaherty seems to be focused on austerity, very much focused on his bottom line, and has basically slammed the brakes on investment, and that's to the detriment of the people of Ontario," she said.

Ontario will spend about $10 billion a year on public transit, roads, bridges and infrastructure, compared with $500 million a year from Ottawa, and is "concerned that the federal government will not provide sufficient funding," added Wynne.

"You can see the difference in magnitude," she said. "When I talk about a pattern, I'm talking about those actions that seem to indicate that the federal government is walking away from that partnership with Ontario that is so necessary."

Ontario's New Democrats said both Wynne and Flaherty were playing politics and doing what's in the best interests of their parties, not their constituents.

"A pox on both their houses," said NDP house leader Gilles Bisson. "Kathleen Wynne is playing the old game of blaming the feds for all her problems, trying to divert attention off herself."

The Progressive Conservatives said Wynne shouldn't complain that equalization payments are down because it means the economy is improving and she should be looking for the day when Ontario is no longer a have-not province that qualifies for those payments.

"They'd rather go with cap in hand and pick a fight with the feds to take the focus off the real problems in Ontario, job losses, high hydro rates and the gas plants scandal," said PC critic Vic Fedeli. "Its not working."

Wynne said her attack on Ottawa had nothing to do with partisan politics, noting her predecessor as premier launched similar volleys against federal Liberal governments. She did not mention Dalton McGuinty by name.

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