TORONTO — Canada’s equalization program that helps poorer provinces is “perverse” and Ontario — struggling with the current economic slowdown — is providing far too much to the federal coffers that fund it, Premier Dalton McGuinty said Wednesday.

A TD Bank report released Tuesday that warned Ontario could slip into have-not status by 2010 and qualify for equalization payments shows the new formula adopted by the federal Conservative government last year isn’t working properly, McGuinty said.

“What the TD paper does is allow us to revisit the perverse dimensions of the existing fiscal network that ties us to the rest of the country,” McGuinty said before a Liberal cabinet meeting. “We have a system in place that to my way of thinking is clearly unfair to Ontario taxpayers.”

McGuinty said Ontario sends the federal government $20 to $21 billion a year more than it gets back in transfers and services, adding the province can’t afford to be so “generous” when it’s bearing the brunt of the slowdown caused by soaring energy prices, a high dollar and a slumping U.S. economy.

“It’s just perverse to say that somehow we are in need, while at the same time we’re sending $20 billion to the rest of the country. It just doesn’t make any sense,” he said.

“It will make (the downturn) more pronounced. The impact will be felt more deeply than it need be in our province.”

Ontario says its taxpayers contribute 41.5 per cent of total federal revenues but the province receives only 31 per cent of federal spending, so it sends more money to Ottawa than its per capita share and it gets less than its per capita share in spending from the federal government.

Equalization is a near $12-billion federal wealth-sharing program that provides funds to poorer provinces to ensure they can provide basic government services at a level comparable to wealthier provinces, but McGuinty complains some receiving provinces are doing better than Ontario.

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