Monthly Column – We Can’t Afford This Liberal Budget

April 27, 2015

 

by Jim McDonell

 

The Liberal Budget, released on April 23rd, will not help the economic situation in Ontario.  Credit rating agencies have downgraded Ontario’s credit rating over the past year. Expert groups such as the Ontario Chamber of Commerce, the Canadian Federation of Independent Business and the Auditor General informed the Premier to change the fiscal direction our province is proceeding and tackle the growing debt, or risk serious consequences for the services we hold dear. The Liberal Government continues to ignore the experts’ warnings at their own, and our peril.

 

To address the grave financial situation across the province, our PC Party tabled a motion on the day before the budget, outlining what we considered to be a list of five sensible approaches to get Ontario back on track and what we needed to be able to support the budget. These were: walk away from the proposed Ontario Registered Pension Plan; commit to not levying the carbon tax; fix home care; reduce energy prices; and commit to a credible plan to balance the budget by 2017/18. The motion asking for these items was voted on, but did not pass.

 

Premier Wynne’s proposed pension plan – the ORPP – will see both employees and employers paying matching contributions of 1.9% of total salaries into a general pool. As a result of this payroll tax, employees will see less money in their pockets and employers’ cost of business will increase. Internal government documents have warned the province will lose 18,000 jobs for every $2 billion collected. Yet, government has ignored this advice and forged ahead.

 

The carbon tax / cap and trade proposal will drive up the cost of any carbon-based fuel. Ontario already has some of the highest energy rates in North America. This cap and tax is essentially a tax on everything and will make it more expensive to heat your home, operate your car, truck or tractor, and raise the cost of energy-dependent consumer goods.  According to Environment Canada, Ontario generates less than only 0.5% of the world’s carbon dioxide emissions. While it might be good to lead by example, the truth is our contribution to this problem is extremely minor. A carbon tax / cap and trade system will only make Ontario manufacturers even less competitive and scare new industries away.  For Ontario to institute such a plan by itself, without a binding international or at least a North American agreement, it would have little impact; this would drive our remaining businesses and their jobs out of Ontario. This Liberal government is out of money and this is just another tax grab.

 

Despite the fact that the number of Ontarians aged 65 or older is increasing at a rate of approximately 4-5% a year, significant service cuts were made at the CCAC last fall to meet budget restrictions.  Last week’s budget saw the provincial portion of healthcare spending actually decreased by $54 million, and the creation of an expensive new layer of bureaucracy in the form of 69 community health link organizations.  My office already sees too many clients who are unable to access a long term care bed or adequate home care for a loved one.  This is unacceptable as we must do everything possible to increase the quality of home care to allow people to stay in their homes and have hospital rooms available for those who need them most.

 

Rising electricity prices are another reason why we are pushing for a change in this budget. The government’s long-term energy plan has been one fiasco after another, from the Green Energy Act, to defective Smart Meters, the cancelled gas-fired power plant scandal, and the most recent addition to the list is the proposed sale of Hydro One. The global adjustment electricity tax that was added to our bills to pay for the government’s long-term energy plan has collected nearly $50 billion since 2006.  The latest blow to consumers and businesses is the 15% increase in peak electricity rates on May 1.  One can only estimate what the additional increase will be as a result of the proposed carbon tax.

 

Balancing the budget has been an Opposition call for 12 years and it is still not in sight. For three straight years, the deficit has increased and this year’s budget sees an increase in spending of $2.4 billion.  Last December, Ontario’s Auditor General warned that if the deficit, let alone Ontario’s gigantic debt, isn’t brought under control it will crowd out essential services like health care and education.  True to her warning, the province’s healthcare spending has been cut by $54 million while the 5.7% increase in interest payments on the debt is the largest sector increase in spending.

 

This is why I believe that we cannot afford this latest budget.