Well it is federal budget time once again and the inevitable political opera around transfer payments is in progress. This time, Ontario is feeling shortchanged and wants Ottawa to restore the 641 million dollar cut in transfer payments it is slated to receive for the 2014-15 fiscal year. Ontario Finance Minister Charles Sousa argues that the transition funding in the wake of the 2009 fiscal crisis, which Ottawa says was a temporary measure, should be continued. Sousa has also been quoted in a Canadian Press story as saying that “Ontario is the only province to face such a drop” in transfer payments.
Well, Sousa is correct in asserting that Ontario is projected to see a 641 million dollar drop in total federal transfer payments. According to Federal Department of Finance figures, total federal transfers for Ontario will drop from 19.799 billion dollars in 2013/14 to 19.158 billion dollars in 2014/15. And, Ontario is also the only province to see a drop in its total – largely the result of a contraction in its equalization entitlement from 3.169 billion to 1.988 billion dollars. However, its Canada Health Transfer payment is projected to rise from 11.925 to 12.335 billion dollars and its Canada Social Transfer from 4.704 to 4.835 billion dollars softening the blow.
You can also take a look at the numbers another way – in terms of the per capita payments. Figure 1 plots the per capita value of total federal transfers since the 2010/11 fiscal year for each province.
Ontario has seen a few years of increases – as have some of the other provinces. Its per capita total federal transfer is also projected to drop in 2014/15 - as is Manitoba's. On the other hand, in per capita terms both Manitoba and Newfoundland have seen declines since 2010 in per capita federal transfers. For 2014/15, Ontario is projected to receive 1,403 dollars per capita in total federal transfers. On the other hand, Alberta, British Columbia and Saskatchewan are each expected to receive 1,258 dollars per capita while Newfoundland is getting 1,282 dollars. Of course, Ontario is receiving less per capita compared to Quebec, New Brunswick, Nova Scotia, Manitoba and Prince Edward Island. Moreover, as Figure 2 shows, over the period 2010 to 2014, Ontario shows the second highest increase in per capita federal transfers – Alberta is first. Again, note that Newfoundland and Manitoba show declines in per capita federal transfer funding.
That Ontario wants more federal funding is an understandable political pre budget demand. You can decide if Ontario is being shortchanged when it comes to federal transfers.