Commission on the Reform of Ontario's Public Services

Chapter 20: Intergovernmental Relations
In addition, the federal government recently dictated changes to the CHT that will have a
negative impact on Ontario. Its recent commitment to move to a per capita cash transfer in
2014 without expanding the existing funding mechanism will result in an annual $400 million
hit to Ontario compared to the current formula. Tying future growth of the CHT to nominal
national economic output beginning in 2017 is certain to constrain payments further (more on
this later in the chapter). Outside the major transfers, the federal government has not
committed to renew other expiring transfers for infrastructure and labour-market training that
support vital public services.
Shared Policy Spaces
Although Canada’s Constitution invests each order of government with certain responsibilities, overlap exists. In areas such as public
safety and agriculture, the Constitution provides a role for both orders of government, federal and provincial. In other areas, modern
issues that transcend traditional 19th-century constitutional divisions of roles and responsibilities have necessitated that governments
work together.
This collaboration has resulted in many accomplishments, including the establishment of universal medicare, expansion of social
services and reform of the tax system, but it has also presented challenges. As a result of this shared policy space, the actions of the
federal government can sometimes cause disruptions to provincial fiscal planning and public services.
Public services and fiscal arrangements must be reformed for Ontario to address the fiscal, economic and demographic challenges
that it faces. But this complex system of intergovernmental interdependence means that, in many areas, the province requires the
co-operation of the federal government.
Towards Reforming Public Services
The purpose of this <strong>Commission</strong> is to provide recommendations to get Ontario back to balance
by 2017–18. But Ontario is not alone. Most governments in Canada, including the federal
government, are also facing budgetary pressures and are working towards fiscal sustainability
(see Chart 20.5). Now, perhaps more than ever, governments at all levels must work together
towards reforming public services.
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