Analysis

Ontario budget: Doug Ford takes the bait with Liberals' tax hike on top-income earners

The Ontario Liberals slipped a relatively small income tax increase into their pre-election budget, and PC leader Doug Ford is making a big noise about it.

The PC leader is refusing to raise taxes on the wealthy, a move that could play into Kathleen Wynne's hands

Ontario PC leader Doug Ford said he would scrap an income tax hike proposed in the Ontario Liberal pre-election budget that would target the top 17 per cent of income earners. (John Rieti/CBC)

The Ontario Liberals slipped a relatively small income tax increase into their pre-election budget, targeting the wealthy, and PC leader Doug Ford is making a big noise about it.

Ford is already vowing he would scrap the tax hike, and that might be exactly what the Liberals and Kathleen Wynne were hoping he would do. 

The proposed changes involve the provincial surtax levied on the higher income brackets. Under the Liberal plan, the top 17 per cent of earners - about 1.8 million people - would pay more income tax. For example:

  • Someone earning $95,000 a year would pay an extra $168. 
  • Someone earning $130,000 would see an income tax hike of about $200. 

Some 680,000 people would pay less income tax. The bulk of people (about three-quarters of Ontario`s 11 million taxpayers) are not affected. 

Ford highlighted it prominently during his news conference Wednesday.

"Today's budget includes massive — I repeat, massive — tax hikes," Ford said. "I'm not going to go after 1.8 million people and increase their taxes, charge them $200 more when they're already struggling with the highest hydro rates in North America."

Ontario Premier Kathleen Wynne applauds Finance Minister Charles Sousa as the Liberal government delivers its final budget before the provincial election in June. (Chris Young/The Canadian Press)
 

The budget documents say for those facing a tax hike under the plan, the average increase would be $200. Ford took that figure and ran with it. 

"So, just think: a family of five will be paying $1,000 more in new taxes," he told the news conference.

I asked Ford to explain his math. 

"We know that they've increased the taxes $200," he said. "Times five is $1,000."

So the kids in the family of five face an income tax increase too? 

"I'm not saying kids," Ford responded. "If there's five people in your house that are paying taxes, there's going to be five people paying $200 more in taxes."

That is, if each of those five people earns $130,000 or so.  

The Liberal budget proposes deficits for six straight years, an astonishing time frame given that Ontario's economy is booming and unemployment is the lowest it's been for nearly two decades. The Liberal plan would add $31.9 billion to Ontario's debt. It bleeds so much red ink for so long that it gives Ford plenty of options for saving money.

Ontario NDP Leader Andrea Horwath hinted Wednesday that her campaign platform will include a tax hike on 'the wealthiest amongst us.' (Chris Young/Canadian Press)

He could halt the three per cent increase to welfare rates ($2.3 billion). He could put the brakes on the free day care program and the expansion of child care spaces ($2.2 billion). He could refuse to increase hospital funding ($822 million). He could say no to free drugs for seniors ($1 billion). Or he could stop the construction of a high-speed rail line between Toronto and Windsor ($11 billion). 

So far, Ford has not committed to scrapping (or keeping) any of these. But he says he would put a halt to the income tax hike.  

You can imagine the attack lines the Liberals will use in the run up to the June 7 election: "Doug Ford says he's for the little guy, but he doesn't want rich people to pay their fair share of tax." Or perhaps, "Doug Ford complains about the Sunshine List, but he doesn't want somebody earning $130,000 to pay an extra $200 in income tax." 

The NDP's Andrea Horwath isn't opposed to the plan. She's cooking up a tax hike on the rich for her own campaign platform.  

"The wealthiest amongst us will be asked to step up and pay their fair share. That will be a part of our plan," Horwath told a news conference Wednesday. 

The Liberals' proposed income tax increase is actually relatively small potatoes in the grand scheme of the provincial budget. The changes would net the government $275 million in the coming year. That's less than two-tenths of one per cent of government revenue. 

The proposal is buried near the end of the 308-page budget. Finance Minister Charles Sousa didn't even bother to mention it during his 45-minute budget speech in the Legislature.

It's almost as if the Liberals wanted Ford to think they were trying to pull a fast one on the voters, so that he would come out hard against it. 

About the Author

Mike Crawley

Provincial Affairs Reporter

Mike Crawley is provincial affairs reporter in Ontario for CBC News. He has won awards for his reporting on the eHealth spending scandal and flaws in Ontario's welfare-payment computer system. Before joining the CBC in 2005, Mike filed stories from 19 countries in Africa as a freelance journalist and worked as a newspaper reporter in B.C. Follow him on Twitter @CBCQueensPark