McGuinty ties tax cuts to new deal from Ottawa

Posted on May 2, 2008 in Debates, Governance Debates – Ontario – McGuinty ties tax cuts to new deal from Ottawa

OSHAWA, Ont.–Premier Dalton McGuinty says Ontario could cut corporate taxes faster as the federal government has demanded, but only if Ottawa allows the province to keep more of its own money.

McGuinty says a TD report this week warning that Ontario could slip into have-not status requiring equalization payments shows how absurd Canada’s fiscal arrangements are.

He told an Ontario Chamber of Commerce meeting in Oshawa that he doesn’t blame equalization-receiving provinces for using the money to cut their corporate taxes.

McGuinty said Ontario is still sending over $20 billion to the federal government “when clearly we need it more and, just as clearly, other provinces need it less.”

Federal Finance Minister Jim Flaherty told the same meeting of business people that he’s been “gently” encouraging McGuinty to follow the lead of other provinces and cut corporate taxes.

But McGuinty complained that Flaherty issued an edict to the provinces to cut taxes without consulting them, and said Ontario can’t afford more tax breaks unless it gets a new deal from Ottawa.

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