The Globe has an other story on the equalization fight between the McGuinty Liberals and the Flaherty/Harper Conservatives. And it has an interesting nugget from Ontario NDP leader Howard Hampton:
"Is the McGuinty government really saying that the federal government should change the tax system so that they take less money from Ontario? How fair would that be for the rest of Canada?"
Perhaps Howard might want to consider what’s fair for the people of Ontario, whom he's supposed to represent, instead of sanctioning this province shipping $20 billion to other provinces to let them cut corporate taxes while our economy suffers.
Another interesting observation, this one from Ontario Conservative leader without a seat John Tory:
However, Ontario's opposition parties accused Mr. McGuinty of using his complaints about the equalization formula to deflect attention from the fact the province's economy is falling far behind the rest of Canada because of Liberal government policies.
OK, so if I accept that its McGuinty’s policies that are hampering the Ontario economy, does that also mean that a) Jean Chretien and Paul Martin can fairly take credit for the boom times of the mid to late 90s, and b) Stephen Harper and Jim Flaherty are to blame for the slowdown of the national economy?
Because whenever I make those arguments, the right tells me governments can’t take credit or blame for the economy. Just curious. Recommend this Post on Progressive Bloggers
6 comments:
No, McGuinty isn't any more responsible for Ontario's woes than the others are for good times or bad. What he is reponsible for are bad policies that made the situation worse. Had the Ontario Liberals instituted a tax regime that encouraged manufacturers to reinvest their windfall earnings in productivity improvements when the dollar was low, the impact of international events may not have been so drastic. Instead the manufacturing sector found it more advantageous to raise dividends for their shareholders.
If McGuinty had eased up on his headlong rush toward some grand socialist Utopia, the province might not be burdened with some of the costly social programs it now has to pay for.
Jim Flaherty, Mr. evil incarnate to all Ontario Liberals, warned that too high taxes could lead Ontario to have-not status. Seems he was correct.
As for the 20 billion Ontario pours into equalization...I hope the system gets changed poste-haste to eliminate this disparity. As it stands it is patently unfair. But, somehow I see Mr. McGuinty using this 20 billion to promote his wefare state agenda as a means of holding on to power and not to address the situation that sees Newfoundland & Labrador with lower taxes than the once mighty engine of the Canadian economy.
Don't be so daft. Chretien/Martin benefited from Mike Harris' slashing of government and taxes, while Harper/Flaherty suffer from McGuinty's bumbling. For someone in Toronto you sure don't seem to understand that Ontario rules Canada and right-wing policies are always right even when they are clearly wrong.
Howard has a point.
My biggest beef with the bitching and moaning from successive Ontario governments about equalization is they like to give the impression that the Federal government takes the equalization money from the Ontario government.
Any change in the burden to Ontarians from a change in the equalization formula will not help the Ontario government, unless they are planning to back-fill any reduction in taxes in Ontario with their own tax increases.
So this constant bitching and moaning is nothing more than the same old Canadian game of the provinces trying to distract their electorates from their actions by pointing at the Federal government. (Such a game predates hockey btw.)
It was BS when Mike Harris, Bob Rae, David Peterson and all other Premiers complained about it and it is BS from Mr. McGuinty as well.
I didn't think the Ontario economy was doing that badly.. didn't they grow it 3% last year?
I know the manufacturing sector is struggling.... industries that fail to adapt (like the car industry with all the SUV's when people are buying foreign compacts) usually fail first when there is a slowdown.
Compounded by too powerful unions that were able to create lucrative contracts for employees when times were good. (Now won't give back some that times are not so good for the industry). No I don't feel sorry for layoffs from union jobs.... But I would prefer that you could fire lazy employees instead, you can't or face the union.
Compound that with taxes that are too high (higher than everyone around it atleast) leads companies to invest in those "other areas"
Compound that with a resource sector boom that has slingshoted economy's like Alberta, Saskatchewan, Newfoundland forward. (Ontario isn't doing that bad it is alot about the rest of us finally doing good)
Compound that with a rising dollar... because other areas are doing well. (now you know what the rest of the country who needed to import went through back with a 67 cent dollar)
Compound that with a government that likes to tax and spend. That means that there is less money out there that people spend (money that multiplies in the economy faster than government spending)
It is interesting how 20B came to be the number out of a 14B program... And also interesting how Quebec is the recipient of more than 1/2 the program.
Then there is all the one off deals signed by the liberal government to remove certain resources fromt eh formula.. like Hydro (which is renewable, such provinces get that break in perpetuity). Or the off shore oil accords. etc
And finally there is the historical center of economy in Ontario. Break of bulk points, and transportation hubs have always had the advantage, and the economic clout over resource frontiers. Just ask Boston how they feel about tea and taxes and measurement sizes. It was much the same between central and outlying Canada. You can even see the disparity within Ontario itself between the towns (turned citys now) and the old resource towns... ghost towns most of them once their usefulness to the whole wears thin.
It seems Ontario simply cannot stand that some of the other provinces are finally out from under their thumb and actually doing well now without their control.
20B is an Ontario government calculation (much like Lorne Calvert's 800 million blue sky number. What is the real unedited number?
And what portion goes to other provinces that Ontario receives benefit from? Roads to transport goods to Canadas largest population, Transmission lines to get power from other provinces, even the 200 mile limit just from having most of the Grand Banks off of the coast is a benefit to Toronto in that they don't have to transport fish in and have it tariffed and duties at the border.
You are absolutely right wheatsheaf... That's probably why all 3 of the provinces that have long history's of being Have provinces (Alberta, BC, and Ontario, which has never been a have not)....
..... also seem to have long history's of Conservative type governments.
Ontario's recent one was 60 years less the Government of David Peterson and then Bob Rae of 4 years each.
BC was 46 years long minus 3 years for Dave Barret.
And in Alberta the SoCred and then Conservative run has lasted since 1935... 73 going on 77 years. Including an astonishing 4 terms by Peter Lougheed, 4 for Ralph Klein.. and 6 yes 6 majority terms for Ernest C. Manning of the SoCred's; 4 of em with over 50% of the vote....
And McGuinty's and Martins "better policies cus they are not a conservative" have the province of Ontario, the only province who has never been a have not....now at the door of being a have not in only a few years as Martin cut funding to the provinces to balance the books and McGuinty couldn't resist raising taxes and spending on big programs.
Harris had a no win as Marin lopped billions off his budget, How come McGuinty can't do more with the more that Cretien and Martin and Harper put back in after the worst of the cuts?
A fictitious 20B that all the previous Ontario governments had to deal with too?
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