The following is from the Globe and Mail.
Struggling Ontario joins have-not ranks
Province sees new status as a 'short-term phenomenon,' but Ottawa's prognosis is much grimmer
By KAREN HOWLETT AND KEVIN CARMICHAEL
Tuesday, November 4, 2008
TORONTO -- Ontario will officially become a poor cousin of Confederation next year, and it is not at all clear whether Canada's most populous province will ever reclaim its status as the country's economic powerhouse.
Ontario's share of the equalization pie will amount to just $27 for every man, woman and child in the province. But it signifies a dramatic reversal of fortune for Canada's manufacturing heartland, which has in the past helped propel the rest of the country to prosperity. After decades of propping up the rest of the country, Ontario will now be on the receiving end of the subsidy program designed for the country's poorer provinces, collecting $347-million in the fiscal year ending March 31, 2010.
Mr. Flaherty told reporters after a meeting at an airport hotel in Toronto with his provincial counterparts that he does not rejoice in the fact that Ontario has fallen on hard times. The province's struggling economy has lost thousands of manufacturing jobs, with no end in sight to the bleeding.
The program is designed to give money to Canada's poorer provinces so they can provide social services comparable to those of the richer ones. Mr. Flaherty said the federal government will distribute $14.2-billion to every province except British Columbia, Alberta, Saskatchewan and Newfoundland and Labrador in fiscal 2010, up 4.4 per cent from the previous year. It will be the first time Newfoundland has not collected equalization since the program was introduced in 1957. Quebec will receive the lion's share, totalling $8.3-billion.
Despite the changes to the program announced yesterday, it is likely there will be pressure to reform equalization further, because observers have said it is politically unpalatable to have smaller regions subsidize a province that produces about 40 per cent of the country's economic output. When Ontario was eligible for payments in the 1970s, when energy prices were soaring, Ottawa changed the equalization formula, and retroactively clawed back the province's payments.
This time around, Ontario is on the verge of "have-not" status because its prosperity is declining in comparison with that of the energy-rich provinces, leaving its standard of living below the national average.
It is apparent mass immigration cannot keep an economy forever robust. Once a selling point it is no longer feasible to say that immigrants create jobs (though they do keep those in the immigration industry happily employed). Such a remark has been quietly swept under the rug.
With almost half of all immigrants settling in Ontario it is unwise to keep immigrant numbers as high as they are now. To do so is an attack on the quality of life and the economic prospects of those who reside in Canada's most populace province. To keep immigration numbers high could only exacerbate the social problems that plague Toronto, problems that have now spread out to the city's surrounding communities.
Ontario may very well come out of its economic downturn but not in the immediate future. Ottawa has to cut immigration targets for the sake of those who live Ontario. Not to do so is just foolish.