TORONTO (Reuters) - The economic turmoil in the United States will harm Canada, federal Finance Minister Jim Flaherty said on Monday ahead of a meeting with the finance ministers of Canada’s provinces on the global crisis.
Flaherty, who says the crisis is harming federal finances, says Ottawa wants to limit the growth of a national program that transfers money to less prosperous provinces to ensure service levels are similar to those in rich provinces.
“We’re in a time of significant economic turmoil ... The American situation remains very challenging, which will affect our Canadian economy as well,” Flaherty told reporters at Toronto airport, where the meeting will be held.
Flaherty says the equalization transfer program is growing at 15 percent a year, a pace he calls unsustainable.
The program is likely to come under more pressure now that the province of Ontario, whose manufacturing base has been particularly hard hit by the slowing U.S. economy, is eligible for payments for the first time.
Ontario Finance Minister John Duncan complained before the meeting that Flaherty should have put more effort into working out how to help the provinces live through the crisis.
“If you want to have a meaningful dialogue about an issue you’d think you might have a proposal in our hands in advance (that) we could actually look at and analyze -- and not a quick meeting at a hotel prior to catching a plane,” he said.
Flaherty told reporters separately that “this is a time for pulling together as Canadians, not a time for bickering and discord”.
Bank of Canada Governor Mark Carney will address the meeting. He declined to comment when approached by Reuters.
Reporting by Frank Pingue, writing by David Ljunggren; Editing by Peter Galloway