2010 Ontario Budget: Chapter II: Ontario's Economic Outlook and Fiscal Plan
Section F: A Stronger Ontario for a Stronger Canada


The Ontario and federal governments have worked well together recently to strengthen Ontario’s economy. This partnership has produced real results: significant economic stimulus through infrastructure investments; financial support for Ontario’s auto sector; service delivery improvements and cooperation in regulatory activities; and enhanced competitiveness through sales tax harmonization.

Ontario is concerned, however, with the trend of disappearing federal financial commitment in key areas. When federal support for provincial programs is time-limited, declines over time or ends, it can leave provinces with significant ongoing financial pressures and negatively affect citizens who rely on these key services.

To build on past successes and achieve results, the Province is calling on the federal government to invest in the future success of Ontarians and recognize that Canada’s success depends on a strong and competitive Ontario.

Federal Transfers and Support for a Stronger Ontario

Ontario welcomes the federal government’s decision to continue transfers that support hospitals and schools, and to extend the funding for another year to 2014–15.

Ontario will continue to press the federal government to protect these existing federal transfers, renew health care funding agreements, strengthen investments in postsecondary education and training programs, live up to the Canada–Ontario Immigration Agreement, support Ontario’s green economy, help Ontario’s First Nations, and locate the principal operations for a Canadian Securities Regulator in Toronto.

The Need for a Reliable Long-Term Funding Partner

Ontario is disappointed that the federal government has stepped away from ensuring stability in the child care sector. The last federal payment under the Early Learning and Child Care Agreement was made in 2006–07. This final payment helped the Province sustain approximately 8,500 subsidized child care spaces to the end of 2009–10.

However, access to affordable high-quality child care and full-day learning programs is crucial to working families. The government will not allow the end of federal funding to disrupt the progress made to date, and the services that parents with young children rely on. The Province remains committed to supporting Ontario families and will step in with an investment of $63.5 million per year to permanently fill the funding gap left by the federal government. This funding will support on an ongoing basis the 8,500 child care spaces.

In other areas, the Province will be unable to make up the lost support when the federal government vacates its funding responsibilities and will have to consider the implications of time-limited funding before entering into further agreements with the federal government.

The funding enhancements to the Labour Market Agreement and the Labour Market Development Agreement announced in the 2009 federal budget helped to provide much-needed assistance to workers affected by the global recession. These enhancements, however, will expire after the 2010–11 fiscal year. As employment tends to lag economic recovery, Ontario strongly believes that extending the time-limited, federally funded enhancements is necessary and that responsibility for funding these extensions rests with the federal government.

The federal government is also not fully living up to its commitment to support new Canadians. During the first four years of the Canada–Ontario Immigration Agreement, the federal government underspent by an estimated $193 million, shortchanging new Canadians who come to Ontario.

That is why it is important that Ontario and the federal government begin to negotiate a new immigration agreement that would include devolution to the Province of settlement and language training and full funding for these programs.

A Partnership for Results

As a leader in the green economy, Ontario is looking to the federal government to substantially extend its funding commitments for the environment, beyond carbon capture and storage projects, to support Ontario’s transition to a prosperous low-carbon economy. The Province calls on the federal government to show leadership on climate change, to help Ontario businesses take advantage of the changes that are coming to the North American market and to help create jobs for Ontarians.

The federal government also has the opportunity to enhance an already successful partnership on tax harmonization by supporting Ontario’s First Nations.

The Province continues to call on the federal government to work with Ontario and First Nations to determine a mutually agreeable method of administering a point-of-sale exemption under the Harmonized Sales Tax that best corresponds to Ontario’s current administrative approach under the Retail Sales Tax.