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Ottawa, October 12, 2004
2004-064

Department of Finance Releases Transfer Estimates

Related document:

• Federal Transfers to Provinces and Territories.

The Department of Finance today issued revised estimates of transfers to the provinces for 2002–03, 2003–04 and 2004–05. These transfers include equalization, the Canada Health Transfer, the Canada Social Transfer and the Health Reform Transfer. Revised estimates were also issued for the Territorial Formula Financing (TFF) program.

The revised estimates show a decline in equalization entitlements from the amounts announced in February 2004. Total entitlements under the program have declined from $9.5 billion to $8.9 billion for 2004–05.

However, as announced at the First Ministers’ Meeting in September, the Government has put forward a new framework that includes protection against declines in equalization in 2004–05 by:

• Establishing a $10 billion floor in 2004-05, which is significantly above the total amounts expected to be paid this year.

• Eliminating negative adjustments relative to the February 2004 levels. Each province will be guaranteed that its Equalization for 2004-05 will not be lower than the amount announced in official estimates for 2004-05 included in Budget 2004.

These measures, subject to the passage of authorizing legislation, would provide stability for provinces and territories as the Government starts implementing the new framework for equalization and TFF announced at the First Ministers’ Meeting in September. This new framework represents the most important change to these programs in their history. As indicated at the September meeting, First Ministers will meet again on October 26, 2004, to finalize discussions on the new framework. More information about the new framework is available on the Department of Finance Web site at www.fin.gc.ca/toce/2004/eq_tff-e.html .

The October 12 publication date for revised equalization estimates is stipulated in the Federal-Provincial Fiscal Arrangements Act—the legislation that governs the transfer programs. The revised estimates are provided for "open years," where payment amounts are not yet final and can change as new economic and fiscal data are incorporated. Transfer estimates for each province and territory are available on the Department of Finance Web site at www.fin.gc.ca/activty/fedprov-e.html

Equalization and TFF ensure that all Canadians, no matter where they live, have access to reasonably comparable public services at reasonably comparable levels of taxation.

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