Feb. 15 /CNW/ – The Ontario Chamber of Commerce (OCC) released a foundational report today suggesting Canada’s productivity is being jeopardized by transfer payments between provinces.
The OCC’s comprehensive report, Dollars & Sense: A Case for Modernizing Canada’s Transfer Agreements, highlights how Canada’s current system of equalization between provinces damages Ontario, and all Canadian provinces and territories. It calls for modernization of these agreements and a national debate on the issue.
The Dollars and Sense report also presents alarming statistics on the accessibility of public services in Ontario stating Ontario children have less access to childcare spaces, young adults in Ontario pay more for their undergraduate education and people with illness are supported by fewer nurses in Ontario than in all other provinces but one.
At a press conference held at Queen’s Park, Len Crispino, Ontario Chamber of Commerce President and CEO, explained how despite becoming a recipient of payments in 2008, Ontario is especially disadvantaged under the current transfer system.
“From birth to death, Ontario citizens are the most disadvantaged Canadians when it comes to public services like education, healthcare and childcare,” said Crispino. “This is unacceptable when billions of tax dollars, taken from hardworking Ontario businesses and citizens, are transferred outside this province through an ‘equalization’ system that punishes productivity and rewards inefficiency.”
But Ontario is not the only province or territory that is impacted in this high stakes game. Current transfers between provinces restrain Canada’s productivity and harm recipient provinces as well.
The Atlantic Institute for Market Studies often refers to equalization and federal transfers as the ‘help that hurts’ and David MacKinnon, author of the OCC report, asserts that, “large scale monetary shifts from high to low productivity jurisdictions is sufficient to make regional subsidies the root cause of low Canadian productivity.”
“With Ontario – and Canada – confronting a significant deficit, we cannot afford to maintain policies that hurt the productivity of this province – or this country,” Crispino pointed out. “We are calling for an evaluation of these agreements and a national debate on this issue. The time is right as the renegotiation of these agreements comes due over the next three years.”