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Ottawa, March 15, 2001
2001-027

Finance Minister Tables Legislation Lifting Equalization Ceiling for 1999-2000

Finance Minister Paul Martin today tabled legislation in the House of Commons that lifts the 1999-2000 equalization ceiling, adding about $800 million to funding for the seven provinces that qualify for the program.

An Act to amend the Federal-Provincial Fiscal Arrangements Act honours the commitment made by Prime Minister Jean Chrétien in support of the agreements on health renewal and early childhood development reached by first ministers on September 11, 2000.

"This legislation is the latest example of the federal government’s commitment to the idea that all Canadians should have access to comparable levels of public services, no matter where they live," said Minister Martin.

The projected $800 million in additional funding is provided by the one-year lifting of the equalization ceiling for 1999-2000. In addition, the estimates show that equalization payments are increasing immediately by an estimated $1 billion due in large part to the exceptionally strong economic growth in Ontario over the last two years. Of this amount, $52 million is for 1999-2000 and $955 million for 2000-2001. This means that payments to equalization-receiving provinces will be about $1.8 billion higher than estimated last October.

The purpose of equalization is to ensure that less prosperous provinces can provide reasonably comparable public services without their taxes being out of line with those of more affluent provinces. The provinces that currently qualify for support under this federal program are Newfoundland, Prince Edward Island, Nova Scotia, New Brunswick, Quebec, Manitoba and Saskatchewan.

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