A closer look at Ontario's "$23-billion gap"

In fact, as this paper demonstrates, the growth in both federal revenues and expenditures in Ontario since 1995 is in line with the trends in other provinces. [...] L I B R A R Y. O F. P A R L I A M E N T B I B L I O T H È Q U E. D U. P A R L E M E N T 3 The fact that federal revenues frequently exceed expenditures in Ontario (Figure 2) – and the fact that Ontario is usually a net fiscal contributor to Canada – speak to the wealth of the province. [...] However, the growth rates of revenues and expenditures since 1995 suggest that growth in federal revenues and expenditures in Ontario is in line with the national average. [...] This view implies that the amount of money flowing out of the net “contributors” to Canada – Ontario, Alberta and British Columbia in 2002 – equals the amount flowing into the rest of the country. [...] In the context of net financial inflows and outflows to/from the provinces, it can be seen that in times of deficit – the early to mid-1990s, for example – federal expenditures made in the provinces were being financed by revenues from those provinces, plus government borrowing.