A report by the TD Bank Financial Group handed residents of Ontario a rather dire prediction on Tuesday.
Their province may soon achieve "have-not" status. The report cites the strong dollar, high energy rates, and increasing commodity prices as factors that may qualify Ontario for equalization transfers by 2010 -- and perhaps even as early as next year.
It's the opposite story for Newfoundland and Labrador, which will change from a have-not to have-province. Record oil prices have set the region up for a forecasted $544-million surplus. Next year, it will get off the equalization system for the first time since Newfoundland entered Confederation in 1949.
Although Ontario's manufacturing and export sectors are expected to face tougher economic times in the months ahead because of a slowdown in the U.S. economy, the province's possible have-not status in the future will likely be due to strong economies in other parts of the country.
Nonetheless, a drop to the have-not ranks would be a psychological blow, said TD chief economist Don Drummond.
"It gives the signal that Ontario is not the mighty king of the economy anymore .... (That) it's one of the weaker partners. But again, it's not so much Ontario's being weak as the other provinces are really roaring along," Drummond said.