The 2007 election platform document for the Liberal Party of Ontario was "Moving Forward Together". Too often over the past years 'moving forward' has meant 'moving spending forward'. Sadly, this has meant leaving taxpayers behind.
Recently the Canadian Taxpayers Federation (CTF) presented recommendations for the 2008 Ontario budget that offers a taxpayer-friendly path forward including a spending freeze, personal tax relief, debt repayment, greater accountability from Ontario's crown corporations and more transparency in how tax dollars are spent.
Spending in Ontario has been climbing at alarming rates; more than double the combined inflation and population growth rates. The McGuinty government spends $84 billion a year on programs - up from $64 billion when they took office four short years ago. However, not only has spending been growing, but the government is spending beyond even what it budgets from year to year.
This over-spending robs taxpayers. It must come to an end through a two year freeze on spending followed by a spending cap limiting program spending growth to a maximum of the combined inflation and population growth rate.
Rampant spending has been enabled by soaring government revenues. Surpluses are now being run and taxpayers should see the benefits through the elimination of the Health Tax. Despite years of a strong economy, Ontario taxes have gone up. It is time that all Ontario taxpayers got the tax relief they deserve.
Taxpayers of the future also deserve a break as the Ontario government continues to mortgage against future taxes. Total debt in Ontario continues to climb up to over $162 billion or $12,656 for every man, woman and child in Ontario. Interest on the debt eats over $9 billion per year (almost $25 million per day) and erodes government's ability to spend where necessary and to provide meaningful tax relief. To resolve this, starting in 2009/2010, 1% of total revenue should be mandated to go to debt repayment. The interest relief should be paid back to taxpayers in a 'Tax Back Guarantee', similar to the policy advanced by the federal government.
Mr. McGuinty continues to believe that intervening in the economy by channeling cash directly to firms through corporate welfare schemes creates jobs. It does not. The practice should end. The government would save $942 million per year in the process by eliminating the myriad corporate welfare programs it runs.
Corporate welfare bums are not the only ones with their hands out. Mayors are also begging the government for more money and new taxing authority. With the average family in Ontario paying 46% of their income in taxes, new municipal taxes are not the way to go and should be denied. Instead, to fund infrastructure in a principled manner, there should be a Gas Tax Accountability Act which would dedicate gas taxes to roads, bridges and highways.
Government spending is not limited to programs. Each year, billions of tax dollars flow through crown corporations with little transparency or accountability. Mechanisms must be introduced to strengthen the protection of these funds. Annual reports should be released directly to the public with no interference from political ministers within three months of their year end. As well, like publicly-traded companies, crown corporations should be required to hold annual public meetings.
Finally, spending by ministers, ministerial staff and senior civil servants has also gone too long with too little transparency and accountability. Posting their expenses and travel online every quarter would improve this situation. This applies equally for grants and contributions which should be posted quarterly for each ministry.
As the McGuinty government prepares the 2008-09 budget it should keep in mind that the money it is planning to spent comes from taxpayers. It should be guarded jealously and treated respectfully. If the government implements these recommendations it will start to move Ontario forward for taxpayers who have been left behind for too long.
