Debt and taxes

Posted on January 12, 2013 in Governance Debates – opinion/letters – Re: Deficit elephant in Ontario room, Opinion Jan. 8
January 12, 2013.   Paul Kahnert /  Salmon Lee

R. Michael Warren says every person in Ontario owes $18,000. What caused this crisis? How much of this debt is caused by tax cuts? Answer, almost all of it. In fact by the latest numbers, tax cuts almost exactly equal deficits across this country.

In the U.S., where they are about 10 years further down the “tax cut” road than Canada, towns and cities are crumbling. They are laying off police and firefighters and even turning off the street lights at night in order to pay for tax cuts. Is this where Canada wants to go?

Tax cuts are making us all poorer and hobbling governments’ ability to govern and build this country. Where is the politician who promises fair taxes, good governance and strict oversight? This is what made Canada great in the past and created many good jobs for decades.

All we get is people like Mr. Warren from Corporate Canada saying that “doing more with less” will lead to prosperity. Baloney. We the electorate must stop voting for the corporate/Harper/Hudak/Ford tax cut lie. You won’t like where it takes us.

Paul Kahnert, Markham

It is time Ontarians look beyond right-wing economic ideology to solving the province’s fiscal challenge. All the ideas that have come from various reports arrive at the same right-wing theme — shrink government to fight the deficit.

Have people forgotten that the global economy has been in dire economic straits for the past four years and if the government will not step in to assist the people when the economy is tanking, who will?

We don’t have a spending problem, we have a revenue problem. Years of tax cuts, generous amounts to business and minuscule ones to individuals, have reduced the capacity of the Ontario government to provide services that have defined this province as one that is supportive of its weakest members and creating equal opportunities for all to succeed.

The Drummond Report states that in the last 10 years, Ontario spent an average of only 14.7 per cent of GDP on government programs, the second lowest in the country with only Alberta, at 13.1 per cent, spending less. On the revenue side, the Drummond Report shows that the Ontario government is either the lowest or second lowest in deriving revenue from the economy from 1981 to 2009.

The current plan on program spending would see a decrease in real spending per capita of 1.9 per cent annually, a level comparable to the fiscal restraint period of the 1990s. How many more cuts can Ontario afford to make?

We should start looking at other solutions. I would suggest every Ontarian read Chapter 20 of the Drummond Report, which details intergovernmental relations. The key point is that “the federal government takes a larger share of its revenues from Ontario than Ontario’s population share and devotes a smaller share of its spending to Ontario than Ontario’s population share.”

Ontario is generating sufficient revenue. It is just that the revenue is not going to the level of government that is responsible for the welfare of Ontarians. Until the Ontario government can control tax revenues emanating from the province, our ability to face its fiscal challenge is hamstrung.

Salmon Lee, Mississauga

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