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TORONTO—“It’s not often that a government facing fiscal problems leads into its budget by declaring proudly that it intends to ignore the fundamental cause of those problems, but that’s exactly what Ontario’s Premier and Minister of Finance have done this year.”
That’s the conclusion of an Ontario Alternative Budget Technical Paper released today by the Canadian Centre for Policy Alternatives on the eve of the McGuinty Government’s second budget, scheduled for release on May 11.
The paper, written by Ontario Alternative Budget co-chair Hugh Mackenzie, challenges the assertion by Dalton McGuinty that Ontario’s fiscal problems are caused by the $23 billion fiscal imbalance in federal finances that he discovered earlier this year, comparing Ontario with other provinces to focus in on the underlying causes of Ontario’s fiscal problems.
“The conclusion from the numbers is clear. Ontario is experiencing fiscal problems because its revenue is not sufficient to pay for the public services we need. And our shortage of revenue is directly attributable to cuts in taxes implemented by the Harris and Eves governments – tax cuts that we could not afford”, Mackenzie said.
Using data from Statistics Canada, the paper concludes that, in 2004, Ontario was tied with PEI in raising the lowest revenue per capita from its own sources among Canadian provinces. If Ontario had raised the same level of revenue per capita as the average for the other provinces, its revenue would have been $15.9 billion higher.
“The numbers also make it clear why we have this revenue gap. Even taking into account the tax cut cancellations and revenue form the new Health Premium, the legacy in lost revenue from the Harris-Eves era is an estimated $12.2 billion in 2004-5.”, Mackenzie said.
“Just bringing Ontario’s own source revenue to the same per capita levels as the average for the other provinces would generate more than enough to eliminate the deficit and fund the Liberals’ entire election platform. To suggest that Ontario’s fiscal problems have any other cause is just blowing smoke.”
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