Solving the Ottawa – Ontario corporate bailout spat

4 responses

  1. Alpha says:

    Forget about the BDC, lets get the federal government to treat Ontarians on a per capita funding basis as they do to every other province.

    Let’s do the math (very simple):

    – 2006/07 Ontario corporate income tax revenues was at $9.85-billion (at a 14.5% rate).
    – If the federal government properly disbursed EI to Ontario unemployed workers(instead of forcing those workers onto the provincial welfare tab), Queens Park would save between $1.5-1.7 billion.
    – The CHT (Canadian Health Transfer) sends $60/Ontarian ($750-million) less than the national average (which is actaully quite large considering Ontario represents 40% of the population).

    So if the federal government was to correct just these two items (and there’s a good dozen more, like education transfers, that show Ontario as a real outlier), Ontario could instantiously cut its corporate tax rate to 11% without affecting overall government revenues.

  2. Mark McQueen says:


    There’s no question that you make excellent points. Unfortunately, any time Ontario raises a concern about the differing treatments of various regions across Canada, it is painted as being anti-Confederation.

    Today’s post was more tongue-in-cheek than a prescription for solving Ontario’s status as a recently underfunded Founder of Canada.

    But, as with tech startups, the Founders rarely get their just reward at the end of the build-out phase.

    So long as: 1) the transfer payment formula is maintained, and 2) natural resources are ignored as a real source of provincial revenue, 3) Ontario politicians are trapped representing the needs of “Canada” versus “Ontario”, Ontario will continue to suffer.

    And before someone makes the point that Ontario has benefitted from the Auto Pact for the last few decades, let’s not forget that Detroit is across the river from Windsor, Ontario, and not Richmond, B.C.


  3. jp says:

    Mark, on the topic of the BDC, dunno if you’ve seen Budget 2008’s entries on the subject.

    “Innovative businesses play a crucial role in translating knowledge into world-leading products and services, opening new markets and creating high-value jobs for Canadians. Budget 2008 sets aside $75 million for the Business Development Bank of Canada to support the creation of a new privately run venture capital fund.”


    “Begun to implement the consolidation of the borrowings of three Crown corporations: the Business Development Bank of Canada, Farm Credit Canada and Canada Mortgage and Housing Corporation.”

    The latter could lower their borrowing costs even more.

  4. Alpha says:

    I complete understand that your comment was tongue-in-cheek, but the more I wear my amateur policy wonk hat and realize how things actually work in this confederation, the more I realize that the joke is completely on us.

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