Dalton McGuinty is on the wrong track

National Post – opinion/editorial
Published: Monday, March 24, 2008
John Tory

Ontario Premier Dalton McGuinty and his Liberal government have had almost five years in office and yet, on the eve of their fifth budget, the province’s fortunes are sinking.

Ontario’s decline is evident in every financial and economic indicator. It’s losing ground to virtually every province in Canada and many countries worldwide.

Over the month of January, the standing committee on finance and economic affairs toured the province listening to ordinary Ontarians. Afterwards, Ontario’s Progressive Conservative Party assembled its own report on Ontario’s economic standing based on those meetings and the economic indicators.

According to Statistics Canada, Ontario has lost 194,000 high-paying jobs since 2004, 64,000 of those jobs in 2007 alone. Compared to other provinces, Ontario has suffered the greatest loss of manufacturing jobs in Canada since January, 2005, both in real terms and as a percentage of manufacturing employment. TD Bank estimates that Ontario could experience further losses of 250,000 jobs over the next five years.

In 2007, Ontario’s unemployment rate was above the national average. All five major chartered banks in Canada ranked Ontario ninth of 10 provinces in terms of economic growth. Since 2003, Ontario has lost a total of 71,804 people to other provinces and recorded consistently negative inter-provincial migration.

Yet this reality has made little impact on Mr. McGuinty. He simply doesn’t understand that jobs will go where taxes are low, regulations are not oppressive, spending is disciplined and there is proper future planning in critical areas such as energy supply.

Instead of implementing policies that turn back the province’s downward trends, Mr. McGuinty blames external factors for Ontario’s economic situation: previous governments, other levels of government –and even the weather!

Certainly, some of these factors play a role. But, why is it that other provinces seem to be doing better, while Ontario is getting weaker? The reality is that Mr. McGuinty, with his high taxing, big government approach is pushing investment and jobs out of Ontario and discouraging new investment.

Mr. McGuinty boasts that he has created new jobs in Ontario, but he fails to mention that almost half of the new jobs created are public sector jobs, paid for by taxpayers’ dollars. Ontario is the only province in Canada where over the past five years the growth of public sector jobs has exceeded the growth of private sector jobs. Mr. McGuinty wrongly believes this is sustainable. It’s not. We need private sector jobs to pay for those in the public sector.

Other governments in Canada, regardless of political stripe, are taking significant steps to reduce business taxes and put out the welcome mat for investment. Rather than learn from their success, Mr. McGuinty is following the failed playbook of Liberal and NDP governments of the past. Ontario has the least competitive business tax structure in all of Canada today. That can be seen in the jobs Ontario is losing every month.

The fact is that lower business taxes will make Ontario more attractive to investors, create new private sector jobs and lead to increased tax revenue. This revenue, in turn, will provide Ontarians with the services they rely on: stable accessible health care, quality education and reliable infrastructure.

In tomorrow’s budget, Dalton McGuinty has the opportunity to make a difference for Ontario. The Ontario Progressive Conservative Party is calling on his government to eliminate the capital tax for all businesses immediately, reduce corporate income taxes and provide some tax relief for small businesses. It must set and commit to real targets to reduce the regulatory burden on all businesses. It must provide some tax relief for hardworking Ontario families. Mr. McGuinty and his Liberal government should begin serious consultations with Ottawa on the subject of tax reform. They must address the looming energy crisis and provide a responsible plan to secure our future energy supply. And finally, they must immediately address the looming skilled labour shortage.

These initiatives are all about saving Ontario jobs and attracting new ones. They are all about leaving businesses and people with more of their own money so they can help rebuild the Ontario economy.

Ontario is blessed with smart, hard-working people, tremendous resources and an incredible location. It was once the economic engine of Canada. Under Dalton McGuinty, it is the caboose. I know we can do better. I understand we must do better. – John Tory is the leader of Ontario’s Official Opposition.

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