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How Much Federal Support Does Ontario Get?

Whenever our Provincial government doesn’t have enough funds to cover some of its services that it is obligated to provide it will many times blame it on the Federal government not coughing up enough money.  In other words you could say its “pass the buck”.   So is this justified? Understanding how the Federal government allocates money to the provinces can be really quite complicated.  So for this reason the average citizen just accepts the story that our province is not getting enough support.  Let’s see if we can simplify this a little so you can make better judgements about the situation.

Equalization Payments:

Sometimes called transfer payments.  This is where the Federal government will make payments to provinces who are not considered as wealthy compared to other provinces.  Up until 2009/2010 Ontario never received any equalization payments.

For 2016/2017 Ontario is expected to receive $21.3 billion from the Federal Government through major transfers.   These major transfers are…

Canada health transfer which will allocate 13,867 million

Canada social transfer which will allocate 5,132 million

Equalization which will allocate 2,304 million

The province can use its own discretion as to how to spend the equalization money however the main purpose of this money is to make sure the province can stay on par with education, welfare and healthcare compared to the other provinces.   In 2014 Kathleen Wynn spoke out about the equalization payments being made to Ontario as being unfair.   It remains to be seen as to what her viewpoint will be this year now that her party is leading the government.

So where this should be of interest to you will depend on your specifics.  If you are a single person you will have one set of interests which are different from the young family or senior.  You will want to keep an eye on the government throughout the year to watch what changes take effect that will affect you.   At least you know how much money has been allocated by the Federal government now let’s wait and see to compare this to what the Provincial government will do with it and where the short changes will erupt.

 

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Sam Seidman, CPA, CA, LPA
629 Sheppard Avenue West
Toronto, Ontario
M3H 2S3

Telephone: (416) 398-1700
Fax: (416) 398-6226

Chartered Professional Accountant, Chartered Accountant, Licensed Public Accountant

Email: sam@torontoaccountant.ca

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