Ontario Premier Dalton McGuinty has tried to inject himself into the federal election by demanding a so-called 'fair deal for Ontario' from all federal party leaders - 'raw deal' is more like it. These demands are merely a smoke-screen for self-imposed troubles in Ontario. They are nothing more than a bald-faced revenue grab.
The premier's job should be simple and compelling - overhaul the tax code so individuals keep more of their money, Ontario companies become more globally competitive and fuel economic growth.
Instead, the premier has teamed up with the Ontario Chamber of Commerce to argue that not enough federal money is coming to Ontario. Their 'fair deal' campaign asks for higher Ontario employment insurance payouts, another regional development program, more cash for health care and infrastructure cash, and more Ontario Members of Parliament.
The Ontario Chamber's involvement in this attempted revenue grab is surprising as their members - Ontario's businesses - suffer in one of Canada's highest taxed jurisdictions. While hurt by a high dollar, high costs for energy and a U.S. economic slowdown, other jurisdictions have responded with meaningful business tax reform. New Brunswick is exploring major tax reform and reductions. Alberta and Saskatchewan already have completed theirs. Meanwhile, just across the lake, Ohio is trying to lure away Ontario business and is on the verge of completely eliminating its business income and capital taxes while having reduced personal income tax by 21%.
Instead of asking for more money to be spent by government, business would benefit from broad-based tax relief. This could be delivered through reduced provincial business income tax and a reduction in the business component of federal employment insurance premiums. For every dollar an employee pays into employment insurance, business must pay $1.40.
The Canadian Chamber of Commerce has argued that these unnecessarily high premium rates paid by employers add to employers' real wage costs, result in a drop in real wages received by employees and cause employment levels to be lower. They refer to a study that found that a 1% increase in average payroll taxes paid by employers results in a 0.56% increase in real wage costs to employers, a 0.55% drop in real wages received by employees, and a 0.32% drop in the level of employment. Lowering the rates for business would provide meaningful relief to businesses in Ontario at a time when they dearly need it.
The call for a regional development program is equally peculiar. Regional development programs amount to wasteful corporate welfare. Government has never been good at picking winners in business as auto industry subsidies and job losses prove. Instead of throwing good money after bad, this money instead, could be applied to reducing business taxes so all businesses share the benefits; not just those which happen to suit the political agenda of the premier's office.
As for more health dollars from Ottawa, more is on the way through increased federal transfers, just not fast enough for the premier. And who could forget the $2.7 billion health tax the premier put in place. Mr. McGuinty should eliminate the health tax and look to alternate delivery models - like greater private-sector involvement - because no amount of new cash ever seems to be enough for the health care monopoly.
On demanding more federal infrastructure cash, the premier should shore up his own record first. Ontario collects $4.1 Billion in gas tax revenues every year, yet reinvests less than half of it on infrastructure. Until Ontario invests 100% of gas tax revenue on roads, bridges and highways, as other provinces do, it is hard to take seriously requests for more federal cash for infrastructure.
As for calls for more Members of Parliament - come on! Leave it to a politician to call for more politicians. Do Ontarions really need more MPs running around with other peoples' money trying to solve all our problems? Perhaps that is the problem.
So much for the premier's 'fair deal'.
