Ontario's 32 billion dollar gap

[nickjbor]

I dont know if anyone else here has read this

http://www.parl.gc.ca/information/library/...s/prb0515-e.htm

but it outlines Ontario's "32 billion dollar gap" that, the difference between what ontario pays in federal taxes, and what the federal government spends in ontario

I'd like to hear opinion on this, how can this be fixed, do the feds need to cut equlization, or does ontario need independence?

[Mad_Michael]

I dont know if anyone else here has read this

http://www.parl.gc.ca/information/library/...s/prb0515-e.htm

but it outlines Ontario's "32 billion dollar gap" that, the difference between what ontario pays in federal taxes, and what the federal government spends in ontario

I'd like to hear opinion on this, how can this be fixed, do the feds need to cut equlization, or does ontario need independence?

Scary part is that previous studies in Ontario have identified that there is a huge internal 'gap' existing between Toronto and the Province, essentially equal to any gap between Ontario and Ottawa. In effect, that means the vast majority of any fiscal gap between Ontario and the Ottawa is in fact, a gap between Toronto and Ottawa. The Provincial government of Ontario is just the middle man here with fat fingers in the pie.

As a Toronto taxpayer (and business owner) I can afford Toronto taxes - it just gets annoying that Toronto gets so little in return for all that money. For example, the Toronto Transit Commission runs its operations almost 90% funded by the fare-box. No other mass transit system in world operates on a 10% public subsidy - the average is 35% to 75% across North America and around the world. This just shows that the tax money collected in Toronto doesn't stay in Toronto - it is exported around the Province and across the country.

As for 'equalisation' payments, again, I wouldn't mind this program in principle, but in practice, apparently 8 of the 10 Provinces not only need these 'equalisation payments' but are becoming inceasingly reliant upon them over time. Bottom line is that public subsidies for Provinces (or people) just provide anti-economic incentives and encourage people to take a 'gimmie' approach to the government for more and more over time. Canada provides endless examples of this.

Newfoundland, for examle, has the most outrageously lax rules for collecting unemployment insurance (which they don't really pay for at all). Ontario, which actually pays the lion's share of UI spending, actually has the most strict rules and the shortest terms. This just creates a culture of 'entitlement' in Newfoundland (for example).

[Charles Anthony]

Here is my opinion: you did not read the article.

The article does not address anything with regards to whether it needs to be fixed or whether it can be fixed.

Here is some of more of my opinion: it is not wise to draw conclusions from this article. Depending on who you are in Ontario (or any other province, for that matter) one may benefit financially from being part of Canada which can not appear in these numbers.

Here are some very simplistic examples to get you thinking.

If I operate a retail business in a Ontario border town, my financial success may benefit from federal expenditures in Manitoba or Quebec or even in the U.S.A. because of my proximity and people passing through.

If I operate a repair center for airplanes in Toronto and the federal government subsidizes 99% of my customers, the location of my customer does not matter.

Looking at money spent in Ontario and collected in Ontario by the federal government is too simplistic. I belongs in the field of crockonomics.

[guyser]

Here is my opinion: you did not read the article.

Huh?

[nickjbor]

things have got better recently, for sure, but I dont like this equlization scheme that benifits only quebec.

[Charles Anthony]

things have got better recently, for sure, but I dont like this equlization scheme that benifits only quebec.

Huh ??

[Mad_Michael]

Here is my opinion: you did not read the article.

Of course I read the article.

Here is my opinion - you like to pretend you know more than you do.

And you are doing a very good job of convincing me not to bother reading anything you post.

Btw, the opening post of this thread asks "can it be fixed?" Don't bother apologising for your error. I don't care.

[Charles Anthony]

Of course I read the article.

My statement of opinion was to the Opening Post, not to your post.

[Charles Anthony]

Of course I read the article.

My statement of opinion was to the Opening Post, not to your post.

It was the Opener that asked for opinion, not you.

[nickjbor]

I've read the article, and I've read other articles as well about the same problem. I also have read articles that place ontario's revenues generation at 41% of Canada, and its expendatures at 38.1%, which is near a 3% gap. I also worked out that as a country, Ontario would have a $17.1 billion surplus

[geoffrey]

Check out Alberta's contributions per capita, then tell me that Ontario puts up too much. Ontario only has a weak 65% of the GDP per capita that Alberta has. They contibute 1/3 per capita of what we do.

Ontario has it easy. Alberta gets the short end of the federalism stick my friend.

Source: http://en.wikipedia.org/wiki/List_of_Canadian_provinces_and_territories_by_gross_domestic_product

Ontario generally also neglects the economic impact of having the national capital region in their province, the government itself is the mammoth of all transfers... how many in Ottawa are Federal employees? And that transfer is nicely split between Ottawa and Gatineau.

McGuinty and his equalisation whinings are a joke. He says Ontario pays too much, but Alberta needs to pay more to make up for lesser contributions from Ontario. Ridiculous.

[Charles Anthony]

The linked article in the Opening Post makes it very clear that the main reason why Ontario is a net contributor is because the average income in Ontario is higher than elsewhere. I quote:

The fact that federal revenues frequently exceed expenditures in Ontario

(Figure 2)

– and the fact that Ontario is usually a net fiscal contributor to Canada – speak to the wealth of the province. While the average Ontarian contributes more to federal government revenues than most other Canadians, this is not because Ontarians are taxed at higher rates or are otherwise discriminated against. All else being equal, an individual earning $50,000 in Ontario pays the exact same federal tax as someone earning that salary in New Brunswick, or in any other province.

(2)

The reason Ontarians contribute more to federal coffers is simply because, on average, residents of that province have higher incomes.

same article that everybody read

If you accept the status quo by believing Ontario should stay within a united Canada, what is there to fix??

The only "fix" is for Ontarians to stop paying their taxes.

[nickjbor]

there is no guarentee that such a high proportion of ontario's economy needs to be diverted within canada, and even so, perhaps ontario should consider seperation. we would be far better off.

[guyser]

Ontario has it easy. Alberta gets the short end of the federalism stick my friend.

Ontario generally also neglects the economic impact of having the national capital region in their province, the government itself is the mammoth of all transfers... how many in Ottawa are Federal employees? And that transfer is nicely split between Ottawa and Gatineau.

McGuinty and his equalisation whinings are a joke. He says Ontario pays too much, but Alberta needs to pay more to make up for lesser contributions from Ontario. Ridiculous.

Ontario will be the engine that drives this country and that will always benefit the ROC. Take away your oil and what are you left with?

Not much.

[madmax]

there is no guarentee that such a high proportion of ontario's economy needs to be diverted within canada, and even so, perhaps ontario should consider seperation. we would be far better off.

Too Late

[madmax]

Check out Alberta's contributions per capita, then tell me that Ontario puts up too much. Ontario only has a weak 65% of the GDP per capita that Alberta has. They contibute 1/3 per capita of what we do.

Ontario has it easy. Alberta gets the short end of the federalism stick my friend.

Amazing what Oil can do. Alberta hasn't gotten the short end of any stick.

Ontario hasn't ever learned to whine properly. McGuinty sounds whiney, but it's not an effective whine. Ontario needs the threatening whine that gets delivered by Alberatan and Newfoundland Leaders.

[blueblood]

Oh come now, it's been a policy for federal governments many many years ago to concentrate manufacturing in Ontario. It's nice that Ontario and Alberta are ahead, why bicker over that. It's also nice that B.C., NFLD, and Saskatchewan are now out of the woods. The real question is not which province contributes the best, but which province takes the most?

[Wilber]

Oh come now, it's been a policy for federal governments many many years ago to concentrate manufacturing in Ontario. It's nice that Ontario and Alberta are ahead, why bicker over that. It's also nice that B.C., NFLD, and Saskatchewan are now out of the woods. The real question is not which province contributes the best, but which province takes the most?

Agreed. Why would anyone begrudge any part of Canada economic success. It benefits the whole country. BC has been a net contributer to equalization except for the past few years and now the economy is out of the tank, it will be again.

[geoffrey]

Oil is to Alberta what manufacturing and market proximity are to Ontario. They are both massive opportunities, we take advantage of ours, Ontario has taken for granted theirs.

I love these people that say 'take away oil and what does Alberta have?' Well, that simply isn't going to happen. I could return the illogical argument and say 'take away finance and manufacturing and what does Ontario have?'

Don't be silly, both economies have merit. Alberta gives way more, and has since the 1930's. Ontario get's a fair ride if any...

Personally, I'd like to see both Alberta and Ontario out of paying for other provinces to do nothing about their second world performance.

[Mad_Michael]

Oh come now, it's been a policy for federal governments many many years ago to concentrate manufacturing in Ontario.

Huh? Canada does not have a centrally planned economy.

Private enterprise establishes their facilities where they choose to do so. Ontario dominates manufacturing because of various reasons mostly to do with geography - Southern Ontario has excellent and easy transportation links to the US mid-west or to the US eastern seaboard. Ease of access to raw materials and a large educated workforce is also beneficial. Thus, Southern Ontario is the most logical place in Canada to locate a large manufacturing facility. BC, the Prairies or the Atlantic region are the worst places to locate a large manufacturing facility for the same reasons. Private enterprise is usually quite logical and ruthless about this kind of thing.

It's nice that Ontario and Alberta are ahead, why bicker over that. It's also nice that B.C., NFLD, and Saskatchewan are now out of the woods. The real question is not which province contributes the best, but which province takes the most?

Quebec consumes the most subsidies - no other province even comes close.

[Mad_Michael]

Alberta gives way more, and has since the 1930's. Ontario get's a fair ride if any...

Get a grip.

Alberta has spent most of its history as a typical subsidy sucker like the rest of Canada.

BC dropped off the 'net-contributor' list just about the time that Alberta joined it - during the 1970's.

From 1904 till the mid-1970's, Alberta was a subsidy sucker like all the rest.

So get off your high horse.

I commend Alberta's good fortune to locate itself on top of a nice pile of oil and gas. I commend Alberta's generous contributions to the grand Canadian subsidy game.

But I find it really annoying that some Albertans act like they invented this subsidy contribution game (conveniently forgetting for how many decades they sucked back the subsidies). Ontario has been paying these subsidies every year since 1867. Ontario has the maturity to recognise that it is done for the greater good of all.

[Wilber]

BC dropped off the 'net-contributor' list just about the time that Alberta joined it - during the 1970's.

Except 1999, BC didn't receive any equalization in the 90's or 2000. It has since.

[geoffrey]

From 1904 till the mid-1970's, Alberta was a subsidy sucker like all the rest.

That's what they teach in Ontario schools, but it's wrong. Find some evidence of your claims, you won't find any. All equalisation studies have shown Alberta to be a contributor since the '30s excluding seven years in the sixties. Ontario barely contributed through the 80's. On a net basis per capita, Alberta has given far far more than anyone else.

But I find it really annoying that some Albertans act like they invented this subsidy contribution game (conveniently forgetting for how many decades they sucked back the subsidies). Ontario has been paying these subsidies every year since 1867. Ontario has the maturity to recognise that it is done for the greater good of all.

On a per capita basis, we give 4x what you do. That's unjustified. We're so far out of Canada's league in economics, that we are being hurt by trying to bring everyone up to our standards. That's why the current standard is better than a 10 province formula. It's reckless to even attempt to bring people to Alberta's level. You'd have to more than double PEI's economy to come remotely close. Look at this:

http://en.wikipedia.org/wiki/List_of_Canad...omestic_product

No one will ever have the services or tax advantage of Alberta until they decide to smarten up and make some reasonable economic decisions. Newfoundland has massive oil resources right in the middle of a market demanding billions of barrels of local oil. They chose not to develop it.

Their choice. But I shouldn't pay for it.

Ontario is no longer the economic gold that it once was. Average incomes are plummeting, job growth is stagnant or receding. People that want to make the big bucks and want real opportunity leave and now live in Alberta.

[nickjbor]

Ontario has the maturity to recognise that it is done for the greater good of all.

you not maturity, the socalist tendencies. this "greater good" stuff has been used by socalists for a century. Ontario has paid into confederation for almost every year since 1867, the only time it did not was when Bob Rae was premier. but what has Ontario got out of Canada? not much.

[guyser]

On a per capita basis, we give 4x what you do. That's unjustified.

Ontario is no longer the economic gold that it once was. Average incomes are plummeting, job growth is stagnant or receding. People that want to make the big bucks and want real opportunity leave and now live in Alberta.

Still spewing crap huh?

This bowing down to the almighty Alberta gets tiresome. I am not convinced you weren't beat up at your Ontario school.