– Ontario NDP Calls For ‘A Balanced Plan For Balanced Books’
(Niagara At Large is posting the following February 15 response from the Ontario NDP to the Drummond Report for our readers’ information.)
Queen’s Park– New Democrat Leader Andrea Horwath says Don Drummond’s report on public service ignores the full picture when it comes to balancing Ontario’s books.
Ontario NDP leader Andrea Horwath
“If we’re going to get Ontario’s books into balance we have to take a balanced approach. Recklessly scrapping programs people rely on while handing out corporate tax cuts doesn’t make sense,” said Horwath. “Instead of hitting families with higher electricity bills or scrapping kindergarten for our kids, we need to ask whether we can afford spending on things like corporate tax giveaways.”
The Commission on the Reform of Ontario’s Public Service was struck by the McGuinty Government to look at ways to eliminate the province’s deficit, but was instructed not to consider any revenue issues, like the $2 billion a year impact of the Liberal corporate income tax cuts.
Proposals unveiled today include abandoning full-day kindergarten, raising hydro bills by 10 per cent and putting less focus on creating jobs.
Horwath noted that the Commission’s pessimistic economic projections are out-of-step with most other economic forecasts. Between 2015 and 2018, Drummond assumes economic growth at 2.0 per cent, compared to a private sector average of 2.4 per cent. That difference lowers revenue projections by $10 billion by 2017-18.
“Mr. Drummond seems to think Ontario’s economic decline is inevitable, and I just don’t agree,” said Horwath. “People worried about their jobs need a government that has a balanced plan for balanced budgets, one that focuses on creating jobs and sharing the burden of economic recovery.”
(Niagara At Large invites our readers to share their views on this post in the comment boxes below. Please remember that we only post comments with real names attached to them. Anonymous comments will not be posted.)
Niagara At Large 
Let’s see. Is he not a former banker? Or perhaps an accountant for an oil company (i.e Harper’s father … I know, not relevant). Bottom line, we’re talking technocrats, not leaders.
And they won’t touch corporate tax cuts. Ideologues. Never mind that globalism is failing.
Good thing Canadians have high definition TV; otherwise, it might actually bother them.
LikeLike
Mr. Drummond,
Welcome to a movement called OCCUPY.
LikeLike
Mark, you need to come to our meetings.
LikeLike
Howrath’s critique counters the well orchestrated media campaign to counter pressures on the province to gut the provincial budget. I would add another concern. The budget would be gutted at a time when funding for protecting our environment is still far less than it was when the Mike Harris government was elected. The response has only been to increase funding in a narrow manner to avoid disasters such as Walkerton. Look at all the horrible environmental messes that need action- for instance the spreading dead zone of Lake Erie
LikeLike
Oh, that’s rich. As if an NDPer even knows what a balanced budget is.
Hey Andrea, government doesn’t solve problems– government IS the problem.
I know you believe otherwise — despite all evidence to the contrary.
That’s OK, keep going on about evil corporations must be punished for generating profits off the backs of honest workers.
LikeLike
There was a study that was done of parties in power and budget deficits/ balanced budgets/ surpluses across Canada since the end of the war and the NDP actually, believe it or not, when they were in power were more likely than the other parties to balance the books, as well as carry lower deficits. Conservatives carry larger deficits, not because they spend too much (even though sometimes they do), but they keep dropping taxes off the sources that can afford to pay the most … and as a result, just paying for the basics end up putting us into a deficit position.
LikeLike
It certainly is the most vulnerable who will be paying for these bills. Our experience here in Niagara over health care is nothing compared to what is yet to come.
LikeLike
Who has the best crystal ball — NOOOOOOOOOOOOOBODY
LikeLike
Dave,
Could you provide evidence that “government is the problem”?
LikeLike
The point is not that “evil corporations” are making profits but the fact that they’re not paying their share or reinvesting in our province. Recently in thr US a GE plant, (I think in Minnesota) which paid a grand total of 0% in taxes closed the plant, let all of its workers go and relocated in China. That’s what one gets for 0% corporate taxes – loss of jobs, outsourcing to attain even greater profits that are hoarded and not reinvested at home. That money is then not recirculated. The jobless cannot afford to spend and the economy tanks. This means necessary services must then be cut. Who wins in this scenario? “Evil” corporations and profits are not the problems but failure to reinvest those profits at home is.
LikeLike
Consider this, Ontario’s current corporate tax rate is 11.5% then 11% effective July 1, 2012. Ontario corporate revenues are $8.9 billion as of 2011. Andrea Horwath stated that rates should go up to at least 14%. A 3% increase is an insignificant $267 million when considering the scope of financial mayhem this province faces. I can agree that corporate hand-outs should be either curtailed or have binding strings attached to them (and that includes green technology).
In 2010 Ontario spent $118 billion with $71.2 billion on wages and benefits.
So where again is the real problem here??
LikeLike
John, methinks you may have missed a decimal or 3 in calculating the value
of 3% tax Rate increase in Corporate Taxes:
If 11.5% tax rate = $ 8.9B revenue
then 14.0% ” ” = 8.9/11.5×14 = $10.8B
thus 2.5% more in tax rate = $ 1.9B extra revenue
While it May save various government services, this increase could be enough to drive a few businesses out of Ontario. This is particularly important, given Ontario’s rising cost of electricity – a key cost for large Ontario corporations (and we haven’t even begun to replace our aging Nuclear plants for $.19 to $.27/kWhr versus the $.10/kWhr we’re now paying).
The Left has an argument that low Corporate Tax Rates may or may not make jobs, but maybe what it does at the moment is to Keep business Here (yep, it wasn’t the only factor with Caterpillar).
I’d dearly love to hear TVOntario’s Agenda do a programme on what
happened in New York State in 2010, where they ‘furlowed’ 100,000 civil servants for 1 day/week to cut labour costs 20% (Rae Days?).
Or how about Ireland which in 2008-Dec, right after the Crash, cut MP’s & Senior Civil Servant’s wages 20%,
the next layer 15%
the next layer 10%
and Everyone 5%, including Mother’s Allowance!
Even with that, they still needed a bailout 1 year later from the EuroBank.
Ontario’s in trouble, mainly because no party will have the courage to do much of anything, since Every solution Hurts.
LikeLike
Yes Andrea, for you there is a Santa Clause but your Santa is Corporate Santa and you would like to empty his pockets!
Have we learned nothing from the ‘Greek Tragedy’? Are we so sure that we know better than the Greeks? Are we so sure that what is happening to the Greeks and the nations following more closely behind could not happen to us?
Poor old Greece, who’s more recent philosophy, was to tax their companies out of existence leaving only a service industry to carry the load. But the Greeks had a plan! They would simply overload their treasury by stuffing the government and government agencies with highly paid bureaucrats and union freeloaders and provide themselves with unrealistic golden parachutes even for failure, unsustainable pensions, a shorter and shorter work week, and longer and longer vacations. But give the Greeks credit, their plan did work for a while. Remember, they still had tourism to soften the blow!
Greeks felt that it wasn’t their fault that after they depleted their treasury and ran out of borrowed money, it was the fault those with a lack of understanding that so callously refused to further underwrite their ‘Greek Plan’ and the lifestyle that the Greeks have grown accustomed too!
Now that they can no longer tax their missing corporations, the socialists and unions have a new plan. They will riot and burn whatever is left of their country until they get what they want. The question is; get what they want from where or from whom?
Yes Andrea, you can handle this same situation much better than the Greeks. Of course to do so you must ignore Canada’s $200 Billion unfunded pension, the rapidly increasing poverty rate, our skyrocketing debt, the inequity between the growing patrician class and the peasants, and blame everything on corporate tax giveaways.
I contend that every dollar increase in taxes is another nail in the coffin of commerce and every dollar loss in commerce is another nail in the coffin of prosperity.
It was our much loved Democratic President John F. Kennedy who saved the United States from debilitating taxes reaching up to 90% with this; “Lower rates of taxation will stimulate economic activity and so raise the levels of personal and corporate income as to yield within a few years an increased – not a reduced – flow of revenues to the federal government.”
And Sir Winston Churchill: “I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle”
Like Greece there is plenty of blame to go around. Every political party in Canada has added to our financial crises and still they offer only nonsense for political gain.
Andrea, please get out of this blame game and point your finger at the true cause of our situation.
Our problems are caused by inadequate management and yes Mr. Taliano it is the fault of those in charge. The government is in charge Mr. Taliano so who else but the government is to blame for the problem?
LikeLike
One thing I can point out is that the for many years the NDP provincial governments of Saskatchewan and Manitoba avoided the debt problems that the responders are using to bash NDP governments. Although the NDP government of Bob Rae did not fit into this sterling pattern, the debt ratios of both this government and that of the last NDP administration in British Columbia were at the same reasonable levels as the adminstrations of Mike Harris and Ernie Eves!
LikeLike
We are a democracy: rule of the people. “The government” = us. We share the “blame” — even those of us who didn’t re-elect this government. Most of us haven’t been paying close enough attention for a long time now (not surprising, since our lives have become more and more demanding).
Mr. Haskell, your statement that Greece’s problems can be directly attributed to their having “taxed their companies out of existence” is interesting. I’d like to know more. If those companies were the small and medium ones that are always the backbone of any economy, then Greece was indeed foolish and shortsighted. That being said, its problems are not all entirely of its own making.
LikeLike
The government is to blame for allowing the corporations to dictate what is for the common good. Corporations are not elected by the public, and they have shown that they are incapable of providing for the common good. Caterpillar is one egregious example, Apple computers is another. Goldman Sachs is another. These are foreign companies, but Canada allows about 50% foreign owneship — way too much. As citizens we are also to blame for what has happened. Neo-liberalism is collapsing. Time for us to become more progressive. I’m going to suggest that your explanation of the Greece issue needs some amplification.I would think that it’s over-simplified. I believe Greece is the scapegoat/product of a failing globalized economy. Greece, the birthplace of democracy, is being ruled now by bankers? The IMF?
LikeLike
I don’t understand the statement about “taxing companies out of existence” Income tax for the wealthy was once at 70%. During all that time, there was not as much flight of capital as there is now with corporate taxes tilting down to 12% and 16%, provincially and federally. Our taxes have never been lower. It is not high taxes that are driving these companies out, but opportunities to make even more money by relocating to countries where workers earn less than $5 a day.
LikeLike
According to the Parliamentary Budget Office, here is the cost of corporate tax cuts (which are not creating jobs).
2010 – 1012
18% – 15% = $11.5 billion dollars.
That’s a lot of money which could be spent on social programs, including public health care.
LikeLike
Angela
I agree with you whole heartily but seeing as how I am blackballed from making comments in the medium There is little I can do but thank you for your wisdom and truth
LikeLike
Canada’s Corporate Tax ratescas per Parliament Budget Office:
“Finance Canada’s estimate of the costs of the planned corporate tax rate reductions appears to be understated,” according to the report. Reducing the corporate tax rate from 18 per cent in 2010 to 15 per cent in 2012 is estimated by Finance Canada to cost $10-billion from 2011-12 to 2013-14. The PBO estimates the cost would be $11.5-billion.
($11.5 billion would go a long way towards funding public health care. So would tar sands royalties.)
LikeLike
Basic rate (for corporations):
The Ontario basic income tax rate is 12%, effective July 1, 2010 (it was previously 14%). It will be reduced as follows:
•11.5% effective July 1, 2011;
•11% effective July 1, 2012; and
•10% effective July 1, 2013.
The tax is prorated based on the number of days in the year when the tax year straddles these dates.
Ontario corporate tax rates are insultingly low, especially since they are unproductive. The decreases are incremental. If you compare the money lost on a yearly basis, it seems small, but if you compare the losses over a 5 or 10 year span, the losses are huge.
LikeLike
Even if you increase the corporate tax rate you won’t see the numbers required to turn this province’s economy around. My earlier stats demonstrate how we have allowed the public sector to explode not only under McGuinty but for the last 30 years. We have created a huge layers of bureaucracy ergo staff to administer programs rather than focus on the services themselves. I would be more than happy for ODSP recipients receive adequate funding but have less people administering the program itself.
LikeLike
John, the administrative costs for ODSP are relatively small. What would help reduce administrative costs would be to reduce and eliminate many of their unproductive rules that prevent ODSP recipients from bettering themselves, either through a job or starting a small business (to the extent they are capable of working – even if part-time) or getting married to a wage earner/business owner. It is the clawbacks from these moves that prevent them from being able to improve their circumstances.
LikeLike
The public sector did not create the deficit. The recession caused the deficit. The budget was balanced, with three years of surpluses, before the financial crisis of 2008-2009.
LikeLike