The Welfare State About to be Tested

It's all fine and dandy when the little guys are sucking on the teat; but what happens when the big kahuna puts his hands out:

TORONTO -- Federal Finance Minister Jim Flaherty isn't the only one predicting Ontario could soon become a have-not province in need of equalization payments.

The latest report from TD Bank Financial Group says Ontario is poised to become an equalization-receiving province by 2010, and perhaps even as
early as next year.

TD says it's no coincidence that Ontario's recent slippage in terms of a relative standard of living "occurred in lockstep'' with the high dollar, soaring energy rates and high commodity prices.

The TD report says Ontario's fall so far is more of a story of booming economic strength in the energy-rich western provinces.

But it warns that Ontario's own performance "is likely to become a more significant driver of the decline'' in the coming years.

Flaherty raised the ire of many provincial politicians when he said Canada's largest province was on its way to have-not status and was the last place in the country where anyone would want to invest.Ontario's gross domestic product per capita fell steadily for five years, from seven per cent above the national average in 2002 to two per cent below the average in 2007.