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Ontario’s ‘have-not’ status is growing

It appears things in Ontario are going from bad to worse.

According to an article in the Toronto Sun, Canada's most populated province is set to collect a stunning $3.2 billion in "have not" benefits in 2012-13, an amount so large and so likely to grow over the next few years, that federal equalization officials are sharpening their pencils for a rewrite of the formula.

"Certainly, it is good for Ontario to now receive equalization and to have its share increasing in the future, but I don't think that the equalization program has been designed in order to have the biggest Canadian province (as) a have not province," Economics Professor Serge Coulombe, of the University of Ottawa, told the Toronto Sun.

"When Ontario is getting more, the other provinces that are poorer are receiving less,"

Equalization was introduced in 1957 as a way to promote comparable public services in all 10 provinces. Essentially, the program takes federal tax dollars and distributes them to "have-not" provinces with lower per-capita revenue.

Ontario joined the ranks of the "have-not" provinces for the first time in 2009/10 and now is the second-largest recipient of equalization payments in the country with $2.2-billion set to flow into its coffers this year.

The $1 billion increase in 2012/'13 represents a significant bump — and is telling of Ontario's ongoing economic woes.

"Sure the [the other provinces] are resource rich but we are doing everything wrong," political anaylst Christina Blizzard told the television arm of the Sun News Network.

"The government of [Ontario] has done some very fool-hearty things with our money. Such as the green energy program that is pushing up the cost of energy. That is causing a lot of companies a lot of grief. They're moving out of here."

Premier Dalton McGuinty's first attempt at turning the economic tide will come next week, when his party tables their 2012/13 budget.

With only a minority government now, he's hoping it won't be his last.