TORONTO - Ontario's new status as a have-not province was played down Tuesday by Finance Minister Dwight Duncan, who said what he'd really like to see from Ottawa is a strategy to help the ailing auto sector.

Equalization is a "broken system" that reflects the strength of oil prices rather than each province's relative economic strength, he said.

"We are dealing with some fundamental economic issues and where we need help is outside the equalization formula, because that's really a small part of what (the federal government) should be involved in," Duncan said.

"They have not talked at all about (the auto sector) in what I would call a meaningful way and I shuddered when I saw the sales figures in the United States."

On Monday, automakers reported their worst U.S. sales in more than 17 years, although the Canadian light-vehicle market continued to show surprising strength, up 1.5 per cent from a year ago.

"The impact that this is going to have on our industrial sector and on the footprint the automotive sector has on the Ontario economy and, more importantly, on the Canadian economy, we don't know yet," Duncan said.

"I don't think they've taken that seriously enough."

But Progressive Conservative finance critic Tim Hudak called the announcement that the province will receive $347 million in equalization payments a "bombshell" and urged the Ontario government to come up with a plan to get the province out of its dire straits.

"For the first time in the history of Canada, our tremendously strong province is now receiving equalization payouts from other provinces, handouts for the province of Ontario," he told the provincial legislature.

"Where's the regret? Where's the sorrow? Where is the plan to turn our province around? Where is the call to arms to say that we will not allow Ontario to remain a have-not province?"

Duncan said the have-not status will not last for long, but admitted that until he sees changes made to the formula it will be difficult to predict the timing.

Equalization payments are meant to ensure that have-not provinces are able to provide comparable services at taxation levels comparable to those in wealthy provinces.

Ontario qualified for equalization in the late 1970s but never collected until now.