Federal government to hike next year's transfers to Ontario by $1.25B

TORONTO – Ontario is proclaiming victory after a concerted campaign by the premier to get Ottawa to hand over more money in transfers resulted in an additional $1.25 billion from the federal government for next year.

Premier Kathleen Wynne and her finance minister had complained that the Harper government shortchanged the province in 2014-15 by $640 million when it unilaterally tweaked the transfer calculations.

Wynne said Monday she was “very pleased” that Ottawa listened to Ontario’s concerns.

“Last year we were blindsided by a reduction that we had not expected and this year it seems as though there has been some movement,” she said.

Federal Finance Minister Joe Oliver said the province will receive more in transfers in 2015-16 than any province.

“Since there has been some continuing and renewed discussion from the government of Ontario about the funds it receives it is worthwhile to point out a key fact: transfers to Ontario will total over $20 billion dollars next year, or an increase of almost 88 per cent since our government took office in 2006,” Oliver said in Ottawa.

Oliver then took a dig at Ontario’s books, after Prime Minister Stephen Harper recently made a similar remark, saying Ontario should focus less on confrontation and more on getting its fiscal house in order.

“I call on Ontario’s government and all governments to follow our lead by balancing their budgets, lowering taxes and showing fiscal discipline,” Oliver said.

Ontario Finance Minister Charles Sousa sent a letter to Oliver last week saying Ottawa’s changes to transfer payments put Ontario’s plan to eliminate its $12.5-billion deficit by 2017-18 at risk.

“Each year since the global recession, you ensured that provinces experiencing year-over-year declines in major transfers were made whole through protection payments,” Sousa wrote.

“This year, as Ontario was the only province to experience a decline in transfers, your government eliminated protection payments altogether, leaving Ontarians at a disadvantage.”

Sousa said Ottawa’s latest transfer figures for next year now put Ontario where it should be. He called it a “good first step,” saying Ontario has received $6.7 billion less over the last six years.

“Notwithstanding that it’s important for us to move forward,” Sousa said in Ottawa. “This enables us to do that.”

Wynne made oft-repeated criticisms of the federal government during the spring election campaign that saw her win a Liberal majority, including accusing Ottawa of balancing its books on the backs of the people of Ontario by cutting transfer payments for health and social spending.

The transfer payment boost lays to rest one of the bones of contention between the Ontario and federal governments, but many more remain.

Wynne called out Harper last week for refusing to meet with her for more than a year. The Conservative prime minister and the Liberal premier last met Dec. 5, 2013, and since then both politicians have publicly taken jabs at each other over pension plans, the provincial deficit and infrastructure spending.

Most recently, Wynne added her voice to a growing number of groups concerned for sex workers’ safety by saying she has “grave concern” about the Harper government’s new prostitution law.

— with files from Andy Blatchford in Ottawa