Budget cuts won't leave provinces short, Flaherty says

The federal government will make sure changes to Old Age Security won't leave the provinces short of cash, Finance Minister Jim Flaherty told CBC News today.

Speaking to CBC's Heather Hiscox, Flaherty said the government will compensate the provinces for social assistance needed to covera change to the age at whichCanadians qualify for OAS. The budget presented Thursday lays out a gradualincrease to the age of eligibility, from 65 to 67, starting in 2023.

"If going out to 2025, 2026,there's more social assistancepressure on the provinces at that time, when the change ismade, 65 to 67, then we will compensate them for that," Flaherty said.

"But realize, this is a social program. This is not a pension program. This has nothing to do with the Canada Pension Plan. This is for relatively poorpeople at that stage in their lives, and there will be noconsequences for them."

Conservative cabinet ministers fanned out across Canada on Friday to sell the budget directly to local business communities, missing the first day of debate on the budget in Parliament. In the House of Commons, NDP finance critic Peter Julian kicked off the debate by promising to read emails and other messages from Canadians. As the first speaker from the Official Opposition, Julian has unlimited time for his speech.

Pennies pitched for charity

Flaherty says the government made a difficult decision when most governments are afraid of making difficult decisions.

"It's easier, you know, to say we'll donothing and we'll leave it to another government [on] another day to do this," he said.

"But we're doing this because we're looking ahead and we'resaying this is what Canadianscan afford over the longer term, it will make sure we have balanced budgets.... Not only tomorrow morning, butlooking out to 2020 and beyond."

A budget measure to stop producing the penny, which costs more to make than its monetary value, caught the attention of many Canadians. Flaherty says he keeps his pennies at home in a jar and he's going to give them to a charity.

"You know, there are billions of penniesout there, there's a lot of money out there, and they're a nuisance to most of us, of course, and they're on our dressers at home and our kitchens and countertops and so on. So let's get together and give them to charity," he said.

Flaherty criticizes Ontario

Flaherty, speaking in Toronto Friday, criticized the Ontario government for its recent budget and its track record since LiberalDalton McGuinty took over the premier's office. Flaherty was the province's finance minister from February 2001 untilApril 2002, and his wife, Christine Elliott, is a Progressive-Conservative member of the Ontario opposition.

"Quite frankly, Ontario's spending mismanagement is a problem for the entire country because of the size of the economy in the province of Ontario," he said.

"They certainly have no one to blame but themselves. We are transferring record sums$19.2 billion this year to the province of Ontario, which is a 77 per cent increase from the time we became government in 2006."