Ontario has long been considered Canada’s economic engine. Now it’s slated to wear a new label: “Have-not province.”
A new report from Toronto-Dominion Bank yesterday warned Ontario is on track to receive federal equalization payments for the first time.
The reasons?
A high dollar and a U.S. economic slowdown are hurting Ontario’s export industries — witness 1,500 layoffs at General Motors in Oshawa and Campbell’s in Listowel this week — while soaring oil and commodity revenues in western provinces make Ontario seem poor by comparison.
“Ontario is not the mighty king of the economy anymore,” said TD’s chief economist, Don Drummond, predicting the province could get $400 million in 2010 and $1.3 billion the following year.
“It’s one of the weaker partners, but again it’s not so much Ontario’s being weak as the other provinces are really roaring along.”
The report triggered a wave of criticism over Premier Dalton McGuinty’s handling of the economy, which some economists say is headed for recession.
The TD report is “certainly a blow to the prestige of Ontario, if nothing else,” said veteran Progressive Conservative MPP Bob Runciman, his party’s interim leader in the legislature.
He accused McGuinty of taking Ontario “from being a province that gives a hand up, to one that will soon be taking handouts from the rest of Canada. Is that a legacy to be proud of?”
But Ontario taxpayers would still be paying billions more into federal coffers than they get back from Ottawa for equalization, health and social programs, Drummond’s report noted.
The latest figures available show that in 2005 Ontario taxpayers sent $21 billion more to Ottawa in taxes than the federal government spent in the province.
