An accounting error made by Ottawa number-crunchers means Ontario is getting short-changed $700 million in equalization payments, Finance Minister Dwight Duncan says.

But Ontario isn’t expecting the federal government to pony up with the cash anytime soon.

On March 21, the federal government told Ontario of a $200 million mistake in the calculation of its equalization entitlement for 2011-2012. For next year, it is another $200 million lost and in 2013-2014 it is $300 million.

“A $700 million change over the next three years speaks to just how bastardized the whole equalization equation has become,” Duncan told the Star. “That is $700 million less of our money that we will be getting back.”

The federal government blames Statistics Canada for the error saying it was a “readjustment” of the numbers being used to calculate equalization by the agency.

Ontario has complained loudly for years that it pays nearly $6 billion in transfer payments to the national pot but it gets back only $2 billion. Equalization payments are a transfer of funds from richer to poorer provinces with the goal of providing Canadians equal public services.

Once the economic engine of Canada, Ontario became a have-not province collecting cheques for the first time in its history in 2009.

“It’s hard to explain why we continue to be net payers,” Duncan said.

However, it was not just Ontario that was short-changed, according to a senior government source. The error also affected Manitoba, Quebec, New Brunswick, Nova Scotia and Prince Edward Island, the source told the Star.

“The feds made a sizable error that has affected up to six provinces,” the source said.

However, all the other provinces except Ontario and Prince Edward Island, which lost $1 million, are getting their money back. P.E.I.’s total budget is about $1.5 billion.

“If you look into the details, only P.E.I. and Ontario are seeing a negative impact because there are other levers in the system that gives the other provinces their money,” the source said.

The $700 million loss is found inside the government prepared Pre-Election Report on Ontario’s Finances, 2011.

The report, released on Tuesday, provides detailed information about the province’s budget plans and it is delivered to the province’s auditor general for scrutiny.

Ontario was badly battered in the recession and it is now struggling to stem a $16.3 billion deficit by cutting 1,500 bureaucrats and taking a 10 per cent swipe at the salaries of highly paid executives at hospitals, school boards, universities and Crown agencies like the Liquor Control Board of Ontario.

The province has been less wealthy during the time the Liberals have been in power, said New Democratic Party MPP Peter Tabuns (Toronto-Danforth).

“Life has become harder for working families and nothing in the Ontario budget will change that,” said Tabuns.

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The fact that Ontario is a have-not province is shameful, said Progressive Conservative MPP Norm Miller (Parry Sound-Muskoka).

“Whose fault it is is semantics,” he said. “We remember the days when Ontario . . . was the powerhouse of Confederation.”