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OTTAWA (Reuters) - Ottawa will have to limit the growth of the equalization program, which transfers money to less prosperous provinces to ensure service levels are similar to those in rich provinces, Finance Minister Jim Flaherty said on Thursday.
"Equalization ... has been growing at about 15 percent per year. That's too much growth," he told reporters.
"We need to curtail the growth, limit the growth of equalization over time ... because it's not sustainable over time," he said. "We must do this, otherwise the integrity of the program will be under attack.
Flaherty said he was not seeking to rewrite the formula for deciding these payments but simply to put a ceiling on the growth of these payments.
"We have no intention of reviewing the program," he said.
He will discuss the problem with provincial finance ministers at a meeting scheduled for Monday.
Flaherty also said he will consider requests by retirees to relax rules on mandatory withdrawal of retirement funds upon reaching a certain age.
"The point you raised is something that has been raised with me by my colleagues and by some organizations and I will look at it, I can't say anything more than that," he said.
Reporting by David Ljunggren; Editing by Peter Galloway