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The equalization formula is "based on a three-year average of economic growth". Since the 2008 recession, the Ontario economy got stronger which resulted in lower equalization payments. [16] In 2012–2013 Ontario's equalization payments increased to a peak of $3.3-billion. It was projected to be $2-billion in 2014–2015.
Until the 2009–2010 fiscal year, Ontario was the only province to have never received equalization payments; in 2009-2010 Ontario received 347 million dollars, [7] while Newfoundland, which has received payments since the program's creation, is now a so-called "have" province, and is now a net contributor and does not receive payments.
Until the 2009-2010 fiscal year, Ontario was the only province to have never received equalization payments. Canada's territories are not included in the equalization program - the federal government addresses territorial fiscal needs through the Territorial Formula Financing (TFF) program.
In the face of these long-term regional disparities, the Government of Canada redistributes some of its revenues through unconditional equalization payments and finances the delivery of comparable levels of government services through the Canada Health Transfer and the Canada Social Transfer.
Canada Health Transfer payments by year since FY2005. Unlike Equalization payments, which are unconditional, the CHT is a block transfer; the funds must be used by provinces and territories for the purposes of "maintaining the national criteria" for publicly provided health care in Canada (as set out in the Canada Health Act).
Alberta and Saskatchewan have made other efforts to distance themselves from Ottawa. Both have frequently criticized the equalization payment scheme as unfair. In his call for "A New Deal with Canada", Moe has signaled a desire for more control over taxation and immigration, and Saskatchewan has introduced plans to create a provincial police force.
This came as a sharp turn after more than a year of cooperating with the federal government, but McGuinty pointed to the special deals worked out by the federal government with Newfoundland and Labrador and Nova Scotia as compromising the nature of equalization payments. In particular, McGuinty noted that immigrants in Ontario receive $800 in ...
The 1990 Canadian federal budget capped the annual growth of the Canada Assistance Plan at 5% for provinces who did not receive equalization payments [note 1] for 1990-91 and 1991-92 fiscal years. That decision was incorporated into the Government Expenditure Restraint Act (C-69) that received royal assent on 1 February 1991.