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Ontario Premier Dalton McGuinty is seen during a speech in Oakville, Ont., on Friday, Feb. 11, 2011. (Colin Perkel/The Canadian Press/Colin Perkel/The Canadian Press)
Ontario Premier Dalton McGuinty is seen during a speech in Oakville, Ont., on Friday, Feb. 11, 2011. (Colin Perkel/The Canadian Press/Colin Perkel/The Canadian Press)

McGuinty: Ontario wants same energy subsidies as Newfoundland Add to ...

Ontario voters will not tolerate their tax dollars being used to subsidize lower electricity rates in Newfoundland and Labrador or other provinces, Premier Dalton McGuinty warned Monday.

McGuinty came out swinging at Prime Minister Stephen Harper's pledge of a $4.2-billion loan guarantee for the Lower Churchill hydro project in Labrador, saying Ontario wants equal treatment from Ottawa.

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"Ontarians should understand 40 per cent of the federal government's money comes directly from Ontarians," said McGuinty. "So when Prime Minister Harper pledges specific aid to another part of Canada for a specific multibillion-dollar project, 40 per cent of that money is coming from Ontarians."

McGuinty has argued for years that Canada's equalization program doesn't work because Ontario contributes about $6 billion a year but only gets $1 billion in return. The payments are designed to ensure the same level of government services across the country.

"If any federal government is going to give Newfoundlanders special support for an electricity project, Ontarians expect the same level of support," he said. "Ontarians will not stand by and let their tax dollars be used by the federal government to subsidize electricity rates in other parts of the country."

The Liberal premier didn't have a dollar figure for Ontario's energy funding request, but said he would be putting the issue to all the federal leaders during the election campaign.

"I just think it would be patently unfair if we were to, for example, subsidize an electricity rebuild project in another part of the country while not receiving any support here in Ontario from the federal government," said McGuinty. "What I'm saying is what's good for the goose is good for the gander."

A spokesman for Harper said later Monday that the Conservatives were open to funding energy projects in Ontario.

"We are open to other clean energy projects in all regions of Canada that meet the same criteria that was referenced in the Lower Churchill announcement," said communications director Dimitri Soudas.

Many of Ontario's big energy projects would meet those criteria, said McGuinty.

"We want at the outset an acknowledgment that we're going to be part of this new initiative as well," he said.

Soaring electricity prices are expected to be a key issue in the lead up to the Oct. 6 Ontario election. Both opposition parties are blaming McGuinty and his Liberals for driving up hydro rates, especially with expensive subsidies for green energy projects.

Ontario is struggling to rebuild and upgrade about 80 per cent of its electricity system at an estimated cost of $87 billion, with hydro rates for consumers projected to jump 46 per cent in five years.

The province has had to watch as the federal Tories offered support for energy projects in Saskatchewan, Alberta, Quebec, Yukon and Newfoundland, said McGuinty.

"Ottawa has been particularly adept at supporting the oil and gas sector in western Canada," he said. "It'd be nice to see Ontario MPs start to say it's important that we support the clean energy industry that is burgeoning in the province of Ontario."

Quebec Premier Jean Charest has also condemned the federal assistance for the Lower Churchill project, calling it an unfair subsidy.

"Quebec developed its network by itself," Charest said last Friday. "Hydro-Quebec financed its operations by itself, including the interconnections with our neighbours."

Ontario's Progressive Conservatives blamed McGuinty for the fact that Canada's most populous province has qualified for equalization payments since 2009.

"Ontario now is even deeper on the welfare rolls of Confederation," said Opposition Leader Tim Hudak. "I never thought I would see the day that Ontario is a have-not province with its hand out to the other provinces for payments."

Ontario's New Democrats were skeptical about McGuinty's attempts to get some attention in the federal election campaign.

"The last deal that (McGuinty) struck with the feds was to bring the HST to Ontario, so I worry about the premier's efforts in this current campaign," said NDP Leader Andrea Horwath.

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