Ontario's Reaction to the Federal Government's Release of Transfer Entitlements for 2016-17
Today, the federal government released 2016-17 provincial entitlements for major transfers, including the Canada Health Transfer, the Canada Social Transfer and Equalization.
While transfers are important in the federation, Ontario is focused on having productive and collaborative discussions at the upcoming meeting of Canadian Finance Ministers on issues such as creating jobs and growing the economy, ensuring retirement income security, improving child benefit programs and investing in public infrastructure.
On Equalization specifically, it is important to note Ontario's place in the federation. Ontario has long been a net contributor to the federation. In 2009-10, when Ontario first received Equalization, the gap between what the people of Ontario paid in federal taxes versus what they received in federal transfers and services was about $11 billion. Ontarians continue to be net contributors to the Equalization program itself, the highest among provinces.
The Ontario economy is expected to outpace national growth for the next two years, and we continue to deliver high quality services with the lowest program spending per person compared to all other provinces. Ontario is committed to continue to be a collaborative partner in the federation, and Ontarians recognize the long-standing, important role that Ontario plays as a contributor to the federation.
A collaborative approach to federalism is part of the government's plan to build Ontario up. The four-part plan includes investing in people's talents and skills, making the largest investment in public infrastructure in Ontario's history, creating a dynamic, innovative environment where business thrives, and building a secure retirement savings plan.
- Ontario’s Transfer Entitlements for 2016-17 are $13.9 billion for the Canada Health Transfer, $5.1 billion for the Canada Social Transfer and $2.3 billion from Equalization.
- In 2015-16, Ontarians will contribute approximately $6.7 billion to the Equalization program while the province will only receive roughly $2.4 billion in return — representing a net contribution of $4.4 billion — the highest of all provinces.
- Of those provinces that receive Equalization, Ontario is the only one that is a net contributor to the program.
- Equalization is governed by a formula defined by the federal government.
- Provinces and territories have identified a need to modernize the transfer system to better address the challenges facing the federation, and to build a stronger economic union.
“Ontario will continue to focus our efforts on taking action to support job creation and economic growth within the province.”