Harper budget will hurt provinces, premiers say

Prime Minister Stephen Harper's cash-strapped government will try to balance its books on the back of the provinces, the premiers of Ontario and Quebec said Monday.

Ontario, Quebec say federal government will balance books on provinces' backs

Ontario Premier Dalton McGuinty and Quebec Premier Jean Charest say the federal government will try to download responsibilities to the provinces in the upcoming budget. (Jacques Boissinot/Canadian Press)

Prime Minister Stephen Harper's cash-strapped government will try to balance its books on the back of the provinces, the premiers of Ontario and Quebec said Monday.

The leaders of Canada's two most populous provinces say they fear more responsibilities will be downloaded to the provinces in the federal budget later this month.

The same thing happened in the 1990s under former prime minister Jean Chretien's Liberal government, but it's "nothing but a shell game," said Ontario Premier Dalton McGuinty.

"When you download responsibilities or costs from one level of government to the next, taxpayers simply pay the same costs to a different government," he said. "In the end, no one wins."

Yet it appears the Harper Conservatives are headed in that direction by passing on the costs of health care and their crime bill to the provinces, McGuinty said.

The omnibus crime bill, which is currently before the Senate, will cost Ontario about $1 billion in new prison costs, he said.

The Harper Conservatives, who won a majority government in last year's election, have taken a "troubling approach" to the federal-provincial relationship, the two premiers said in a joint news conference at the Ontario legislature.

The Tories are making unprecedented, unilateral decisions without consulting the provinces, Charest said.

Ottawa used to provide half the funding for health care, but it has steadily declined to 20 per cent, he said. The new funding formula brings it down to 11 per cent.

"So as we look ahead to the federal government's budget, there's reason for us to be concerned that this will continue," Charest said.

"And if it does, then we want Canadians to be part of that discussion of how the federal government should develop its relationship with the provinces and how we need to work together as we are going to continue to face economic times that are uncertain."

Immigration, health-care costs

Ottawa is shortchanging Ontario on immigration costs and adding even more burdens by making changes to health-care funding and old-age security without even talking to the provinces first, McGuinty said.

"What's especially troubling about these new costs being downloaded onto Ontario taxpayers is that the federal government remains so untroubled by the whole thing," he added.

The Tories defended their track record, saying they've made "dramatic increases" in equalization and other transfers —including health-care funding — to both Ontario and Quebec.

The two provinces will receive almost $40 billion in federal transfers this year, said Chisholm Pothier, a spokesman for federal Finance Minister Jim Flaherty.

"Most recently we announced six per cent health-care funding increases for the next five years, after which funding growth will be tied to growth in the economy, but will never fall below three per cent," he wrote in an email.

"This is more funding than most provinces are budgeting for health care."

Ontario, which is facing a $16-billion deficit, has been advised to cap growth in health-care spending to 2.5 per cent until it re-balances the books in 2017-18. At $47 billion a year, health care accounts for nearly half of every dollar the government spends.

McGuinty expects support from other provinces

McGuinty suggested that other provincial leaders will lend their support to Ontario and Quebec ahead of the March 29 federal budget.

"I think we'd be hard-pressed not to find any premier of any province or territory that wasn't interested in a good, co-operative, collaborative relationship with the federal government," he said.

But McGuinty's call for provincial solidarity may fall flat in Alberta, which is still fuming over his remarks about the oilsands.

Alberta Premier Alison Redford is calling for McGuinty to apologize for saying Canada's high "petro-dollar" is bad for Ontario manufacturers and exporters.

McGuinty has since tried to tone down his comments, but Redford isn't satisfied, saying the entire Canadian economy — and Ontario in particular — benefits from the oilsands.

Charest steers clear of Redford-McGuinty tiff

Charest, who's known Redford since high school when she was active in the Progressive Conservative party, may be able to mediate a peace treaty between the two. But he chose to steer clear of the heated debate on Monday.

"Mr. McGuinty and Madame Redford have said what they had to say," he said. "I don't have any comments to make on that. But I do believe it's very important that we work together, and we do."

He said Quebec is ready to talk about a national energy plan — an idea Redford suggested in January — but only if it's a provincial initiative.

Provincial jurisdiction must be respected and if Ottawa wants to play a role, it must be by invitation only, he said.

While Charest was making demands on the federal government in Toronto, his opponents back home were pillorying him as weak-kneed and ineffectual.

It was part of a persistent attack theme from the separatist opposition that Harper's Canada is indifferent, even hostile, to Quebec — and Charest is powerless to make a difference.

The Parti Quebecois suggested Monday that if it were elected, it would get more respect from Ottawa than Charest, whom it casts as too pro-Canada to upset the federal apple cart.

Of the 15 demands he made during the 2008 federal election, the PQ said, none have materialized. The PQ cited examples like maintaining the gun registry, a formal limit on federal spending power and increased post-secondary transfers.