Forget for a moment that the Ontario Government’s deficit will balloon to $12.5 billion in 2014-15 compared to $11.3 billion last year. And forget, if that’s possible, that our overall debt will grow from $289 billion to $317 billion by the end of 2016-17 – what’s more unthinkable is that in spite of all that, the government plans to increase spending by $3 billion over last year’s numbers – say what?? Wasn’t there an Ontario government not too long ago who thought they could spend their way out of debt? I needn’t remind anyone how that experiment turned out for us.
And if you measure by the standard Debt-to-GDP (gross domestic product) comparatives, Ontario’s Debt-to-GDP will grow to a whopping 40.3 per cent. Compare that to BC at 17.6, Saskatchewan at 6.1, Manitoba at 29.8, and the Maritimes on average at 37.3. And, on the total opposite ends of the scale, Alberta at minus 1.2 per cent, while the worst is Quebec at 51 per cent according to the Royal Bank’s Economic Research of July 8th 2014. Comparing our numbers to Canada’s total Debt-to-GDP of 33 per cent, it becomes quite clear that Ontario is heading in entirely the wrong direction.
If we really want Ontario to guarantee its long-term prosperity, for my money I want to see a far more robust plan to reduce spending and tackle the debt.
We can also ensure Ontario’s economic recovery by focusing more clearly on the needs of small business. If this government truly believes in what it preaches, that small business will be the number one job creators in Ontario, then why the heck would they handcuff them with this proposed Ontario Retirement Pension Plan in 2017? Asking small businesses to buck up for the 1.9 percent of wages (on average $1,800 annually per employee) on top of contributions towards a perfectly good Canadian Pension Plan system is counterintuitive. It’s a bit like someone on a moving ship throwing a life preserver to a drowning man without a rope attached. He may float for a while longer – you just won’t see him again.
At the Chamber we have stressed all along that the best way to allow people who do not contribute to a pension plan is to introduce legislation on Pooled Registered Pension Plans (PRPPs) a new form of tax-assisted individual retirement savings plan for workers without employer-sponsored pension plans. In fact, Eighty six percent of Chamber members in Ontario support PRPPs as opposed to a stand-alone Ontario Pension Plan which will create administrative duplication with the CPP and will no doubt deter job creation.
Equally astonishing is that this budget made no real attempt to tackle the out of control increases in electricity costs. Ontario electricity prices are among the highest in North America, and as such are one of the biggest, if not the biggest, barrier to business expansion in the province. Worse still, they may also be one of the chief reasons why Ontario businesses would elect to look elsewhere to locate. Reducing electricity costs should have been a top priority for this budget. That effort is nowhere to be found.
On the infrastructure file, while I would have to say I am pleased with the $29 billion in dedicated funding over the next 10 years for transit and transportation infrastructure projects, I am not at all convinced that we should be funding it by increasing our aviation fuel taxes. Our airports have enough difficulty in getting Canadians to fly out of their local or regional airports as opposed to flying out of neighboring American cities, without adding, yet again, more cost to ticket prices for both domestic and international flights. As it is we lose nearly 5 million passengers to American airports each year. Surely, there is a more prudent, less damaging way to fund infrastructure.
Finally, the proposed $2.5 billion Jobs and Prosperity Fund aimed at attracting business investment in Ontario while very noble in intent, seems a bit ill conceived. I would argue that we could do much better with the $2.5 billion if we were to invest it in reducing electricity prices in the province, ditching the Ontario Pension Plan, and getting our provincial books balanced once and for all. But that’s just me.