By WALTER ROBINSON -- Ottawa Sun
McGuinty vowed to balance the province's books when he signed the Taxpayer
Protection Pledge. Now Ontarians, as well as Canada's premiers, must hold
him to this promise
The polls are closed. The votes have been counted. The people have spoken.
The democratic process has triumphed. Cliche, cliche, blah, blah, blah. Mr.
McGuinty is the premier-designate and his government will be sworn in
shortly.
From the point of view of the Canadian Taxpayers Federation, there are
three key messages that stem from Election 2003.
First, the process surrounding the Taxpayer Protection Act which both Mr.
Eves and Mr. McGuinty pledged to uphold, worked -- and worked well -- a
point to which I'll return in a moment. Second, the "tax relief" agenda is
not dead, far from it! And finally, moving forward, Mr. McGuinty's electoral
landslide was the easy part. Governing the economic engine of Canada --
Ontario churns out 42% of the nation's GDP -- comes with its own unique
constraints which thankfully inherently limit the tax-happy spendthrift
ambitions of any political party.
On Sept. 11, my colleague, Ontario CTF director John Williamson scored a
coup and secured Dalton McGuinty's signature on our Taxpayer Protection
Pledge. Ernie Eves also signed our promise a day or two before and faxed it
to our Toronto office.
For the record, Mr. Williamson offered the same public signing opportunity
to the Tories but they chose not to avail themselves of this offer -- in
hindsight, this was clearly a strategic blunder on their part.
Mr. Williamson even went so far as to offer to hop in a car right after Mr.
McGuinty signed our pledge and drive anywhere within the 416, 905, 705, 519,
or 613 area codes (basically everywhere except Wa Wa, Timmins or Thunder
Bay) to secure Mr. Eves' signature in a similar public ceremony which is a
compelling testament to his and the CTF's non-partisanship.
Both leaders pledged to abide by and uphold Ontario's Taxpayer Protection
and Balanced Budget Act (we'll call it the Act). To be clear, this law does
not stop a political party from raising taxes -- to do so would be
anti-democratic.
However, if a party does propose to raise personal, corporate or sales
taxes, or introduce new taxes, the Act states that the party leader must be
"specific, clear and unambiguous" and seek the approval of the electorate
either through a provincewide referendum or in a general election campaign.
Voter approval or rejection is then predicated on voter awareness.
Both the Liberals (after some prodding by the CTF with the chief elections
officer of Ontario) and PCs were in full compliance with the Act. The PCs
clearly laid out their legislative proposals with respect to giving cities
the power to levy gas or sales taxes in the context of local referendums.
And the Liberals costed their business tax rollbacks (read: Hikes) and the
billion-dollar impact of their 2003 income tax freeze and abolition of
personal income tax cuts that were scheduled to go into effect next January.
(As an aside, if the NDP had won Thursday's election, their proposed
corporate and income tax hikes would have been the subject of a referendum,
since Mr. Hampton didn't bother to obey the Act during the campaign.)
Party leaders must write the CEO at least two weeks before voting day
outlining their tax proposals. The CEO then evaluates the proposals for
compliance with the act and communicates with the clerk of the Legislature
if they are in accordance with the act or have run afoul of the law no later
than nine days before election day.
Never in the history of the province have voters had such clarity. The
provisions of the Act worked and as authors of this law in Canada, we are
justifiably proud.
The other good thing about the Act is that it forbids deficits. So no matter
what Mr. McGuinty and his finance minister find -- the old change of
government song, whoa, the books are worse than we thought -- he and his
colleagues are committed to balancing the province's books by March 31,
2004.
As for those misinformed pundits who gleefully pronounced that the era of
tax cuts is over, sadly, they're way off the mark. The Eves platform was
hardly a fiscal conservative's dream.
Tax-relief measures
To start, as John Williams noted repeatedly, a leader must first and
foremost be credible when proposing tax-relief measures.
Just 18 months ago, Mr. Eves opposed the private school tax credit and
scoffed at the idea of mortgage interest deductibility. And delivering a
budget in an auto parts plant as opposed to the Legislature, well that was
patently stupid.
Tax cuts are alive and well but the provincial PCs did not follow the
successful template when it comes to tax relief. Cuts to personal income
taxes work best when they are across the board, which blunts criticism from
opponents who pit one income group against the other when questions of who
benefits the most are raised?
And speaking of this criticism, the Eves campaign gimmick of cancelling a
planned 10% across-the-board cut to everyone's provincial education portion
of the property tax in favour of a 100% cut targeted to senior citizens was
ideologically and fiscally indefensible.
Enduring examples abound as to the success of the across-the-board formula:
The Klein tax cuts of the early 1990s. The Harris tax cuts in 1995 and 1999.
Bernard Lord in New Brunswick in 1999. Paul Martin's pre-election budgets in
February and October 2000.
The B.C. Liberals in 2001 and Jean Charest's Liberals won in Quebec earlier
this year, partly on the back of an across-the-board 27% personal income tax
cut proposal.
Finally, many observers fret that Mr. McGuinty, in order to keep his wish
list of promises, which rivals Santa's toy parade, will plunge Ontario into
deficit and hike taxes tremendously.
The economic health of Ontario is critical for the country as a whole and a
return to the bad old days of Bob Rae plunging the province and the country
into a three-year recession is not on.
Any moves in this direction would not only be met by scorn from Ontario
taxpayers -- including those who voted Liberal -- but by fellow premiers
across the land and His Inevitableness himself, Paul Martin. Besides, Mr.
McGuinty has signed in blood not to run deficits.
As my business law professor at Carleton back in 1988, Mr. McGuinty kept his
word on getting assignments back to his students on time.
And you can rest assured that my friend John Williamson in Toronto is
carrying a signed copy of our Taxpayer Protection Pledge in his back pocket
at all times to ensure that Mr. McGuinty keeps his promise to taxpayers.
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