Premier Kathleen Wynne says that the federal government’s decision to slash transfers to Ontario is part of a larger pattern in which Ottawa remains fixated on its bottom line and is moving away from "nation building."
The newly unveiled federal budget will cut equalization payments to Ontario by $641 million, a change that had already put the province at odds with federal Finance Minister Jim Flaherty before the budget was even tabled.
According to Wynne, Flaherty had previously protected provinces when their equalization payments decreased — though Ontario was given no such help this time around.
On Wednesday, the Ontario premier and her finance minister spoke to reporters to lay out their case as to how these latest cuts will affect the country’s most populous province and how they are part of an ongoing trend.
"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 Wednesday, a day after the federal budget was unveiled. "And we’re here today to demonstrate that yesterday’s budget is part of that pattern."
More to the point, the Ontario government released a list of 116 cuts the federal government has made since 2006 that have affected Ontario negatively.
Wynne said these ongoing cuts leave Ontario in a position where it must "step up" to protect vital programs, though she said there is a limit to what the province can do.
"We can’t fill all of the gaps, but we are stepping up to do what we can," she said.
Flaherty has rejected Ontario’s arguments, suggesting that the provincial government does not understand how equalization programs work.
"Equalization is a formula and it's based on the revenues that a province has and the expenses that they have and in fact, Ontario is doing modestly better than it was doing a couple of years ago," he told CBC News on Wednesday.
"Therefore, its entitlement to equalization on the formula that applies to every province, is less than it was before," Flaherty added.
According to the federal Finance Department’s website, equalization payments are supposed to help address disparities among the provinces. In principle, they are distributed in a way to help ensure that provinces can provide similar levels of public services to Canadians, even if some provinces are less prosperous than others.