Monday, January 31, 2005

After Offshore, Ontario Wants Their Piece Too

The predictable aftermath of the offshore oil flap has begun. Greg Sorbara, Ontario's finance minister, has demanded $4.8 Billion of the 2004-'05 Federal Surplus.

Currently, Ontario contributes $23B more to Ottawa that it gets back. Ontario is the engine of the Canadian economy and, in the view of many residents, it's an engine that doesn't get the respect it deserves. Sorbara has previously complained that he is tired of the Feds racking up huge surpluses on Ontario's back while the province is mired in a fiscal emergency.

"The Canadian fiscal system has got some very serious cracks in it and those cracks must be addressed and must be repaired. The system is very badly skewed ... I think lopsided is a fair description," he said.
The $4.8B figure is based on the fact that Ontario is responsible for 40% of the nation's GDP. Sorbara has argued that they are, therefore, entitled to 40% of the $12B, or $4.8B.

Provincial and Territorial Finance Ministers are meeting in Ottawa today.

In just over a year in office the Prime Minister has all but institutionalized regionalism. His deal with the Atlantic Provinces is only the latest in a stream divisive acts, from the Health Care Summit to failure to adequately handle trade disputes with the US. Paul Martin's offshore energy deal may have ended his flap with Danny Williams, but it will become an albatross over the coming months and years.

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