Ottawa, December 21, 2007
2007-108
The Honourable Jim Flaherty, Minister of Finance, today confirmed that
Equalization and Territorial Formula Financing payments for 200809 will
reach a combined total of $15.9 billion.
"This past year was a turning point in our history," said Minister
Flaherty. "Our government restored fiscal balance in Canada, providing a
solution that is principles-based and predictable. A restored fiscal balance
will ensure provinces and territories have both the means and clarity of
purpose to develop and provide programs and services that are important to
Canadians."
As a result of our fiscal balance plan, Equalization transfers will
increase by almost $700 million over the previous year, reaching an all-time
high of $13.6 billion. This growth is largely due to an increase in overall
provincial revenues resulting from a strong Canadian economy.
The new Equalization formula is based on the report of the Expert Panel
on Equalization, known as the O'Brien report. The new Equalization formula
bases entitlements on a comprehensive measure of a province's ability to
raise revenues as compared to other provinces. In doing so, it ensures
provinces can provide reasonably comparable levels of services at reasonably
comparable rates of taxation.
The system is consistent with the original intent of the program, and
accounts for why some provinces have seen their payments rise while
provinces which have experienced above-average economic growth, due largely
to strong resource revenues, will see their payments decline.
Transfers through the Territorial Formula Financing program also
increased in 200809 by over $90 million compared to 200708, reaching $2.3
billion. Yukon will receive $564 million, the Northwest Territories $805
million and Nunavut $944 million as a result of the escalator attached to
the program.
Equalization
N.L.
P.E.I.
N.S.
N.B.
Que.
Man.
Sask.
TOTAL
200809
($ millions)
Equalization
158
322
1,465
1,584
8,028
2,063
0
13,620
Accord Offsets
742
106
848
Total
899
322
1,571
1,584
8,028
2,063
0
14,468
$ Per capita1
1,781
2,310
1,679
2,111
1,038
1,732
0
200708
($ millions)
Equalization
477
294
1,465
1,477
7,160
1,826
226
12,925
Accord Offsets
494
68
563
Total
972
294
1,533
1,477
7,160
1,826
226
13,487
$ Per capita1
1,921
2,119
1,641
1,970
931
1,540
227
1Includes Equalization and
Accord Offsets.
Totals may not add due to rounding.
More information on the Equalization program is available at:
http://www.fin.gc.ca/FEDPROV/eqpe.html.
Additional background on Territorial Formula Financing is similarly
available at:
http://www.fin.gc.ca/FEDPROV/tffe.html.
_____________________________________
For further information, media may contact:
Chisholm Pothier
Press Secretary
Office of the Minister of Finance
613-996-7861
David Gamble
Media Relations
Department of Finance
613-996-8080
