The Liberal Legacy in Ontario

Ontario, historically an engine of economic growth in Canada, became a “have-not” province in 2009-10 and began to receive equalization payments for the first time. Since then, the province has received more than $14 billion in equalization payments, contributing to rapid growth in the size of its overall transfer envelope.

Ontario’s fiscal problems have emerged because the provincial government has failed to restrain its spending growth.

As a result, the province has continued to spend more than it takes in, running persistent budget deficits even as increased transfers continued to pour in from Ottawa.