News Release

From the Prime Minister's Web Site (http://www.pm.gc.ca/)

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PRIME MINISTER HARPER WRITES PREMIER DALTON MCGUINTY ON PLAN TO RESTORE FISCAL BALANCE IN CANADA

March 19, 2007
Ottawa, Ontario

Prime Minister Stephen Harper today wrote Premier Dalton McGuinty to outline the benefits for Ontario in the fiscal balance plan set out in Budget 2007.

The plan announced today is based on national principles, while treating each province fairly and meeting the government's commitments.

Prime Minister Harper's letter highlighted the following issues:

The new Equalization formula will include a fiscal capacity cap, "to ensure that an Equalization-receiving province does not end up as a result with a higher fiscal capacity than a non-receiving province.

We are also moving to provide fairness to all provinces by legislating equal per capita cash transfers under the Canada Social Transfer immediately, and for the Canada Health Transfer when the Health Accord expires at the end of 2013-14. Together, these measures return federal transfers to the transparent and principled approach that Ontario has long advocated.

Budget 2007 also fulfills all federal commitments under the Canada-Ontario Agreement.

It also invests new resources in infrastructure of strategic significance to Canada's future, such as the Windsor-Detroit corridor.

Prime Minister Harper concluded that "our plan delivers important benefits to the people of Ontario, both now and in the future. The combination of the move to equal cash per capita under the Canada Social Transfer, the EcoTrust, new funding for child care spaces, the patient wait times guarantee trust, the Infoway funding, as well as the pay-out of commitments under the Canada-Ontario Agreement should mean over $2 billion in new funding for Ontario before the end of 2007-08."

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The Prime Minister's Office - Communications
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