Ontario election promises a tax-and-borrow-and-spend jamboree: Neil Macdonald
Concern about deficits is no longer in vogue
"Please tax us more," pleaded columnist Heather Mallick in the Toronto Star last week. (I can almost imagine Prime Minister Justin Trudeau and Ontario Premier Kathleen Wynne, grinning and high-fiving: "Can do, Heth! Gotcha covered.")
Okay, I couldn't resist that parenthetical snark. I think I can actually see what Mallick was trying to say – some modern variant of Oliver Wendell Holmes Jr.'s famous quote: "I like taxes. With them I buy civilization."
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It is impossible to sensibly disagree with the thrust of that comment. Without wealth redistribution, and the law and order and basic services it funds, things get ugly fast. Mallick clearly feels that's happening now.
But if taxes are the best measure of civility, Ontario is already a terribly civilized place.
Last year, the average Canadian household handed over about 43 per cent of its total earnings to federal, provincial and municipal governments combined, and Ontario's aggregate tax burden is very close to the national average. Ontarians are carried in the womb of a nanny state from cradle to grave. How much more civilized, really, does it need to be?
More, apparently. Lots more. At least that's the takeaway from Ontario's alienating election campaign. (What else can you call a campaign in which "none of the above" is such a popular phrase?)
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The battered, unpopular premier, Kathleen Wynne, and the apparently ascendant NDP leader, Andrea Horwath, are competing to spend more, or, to use Wynne's new favourite word, be more "caring."
Both are promising, with some variations, to pay for people's prescription drugs, their dental care and their child care, if elected to government on June 7.
They don't talk too much about how they'll pay for expenses that big, but it's no mystery: higher taxes, or borrowing, or, more likely, a combination of both. That is simply the Liberal and NDP way.
In the centre-left worldview, high-income earners always need to pay more in order to reach their "fair share." They already pay a much bigger share than everyone else, of course, given our graduated taxation system, but "fair," for obvious reasons, remains eternally undefined.
As for borrowing, concern about deficits is no longer in vogue. The Trudeau government was actually elected on a promise to run deficits, which it proceeded to do with great enthusiasm. In the real world, though, taxing and borrowing have limits.
Ask Bob Rae, who ruled Ontario for a few years back when he was a New Democrat. Rae's finance minister, Floyd Laughren, piled one big deficit atop the next, at least until the bond markets, where governments do their borrowing, stepped in. Big lenders effectively told Rae to either make cuts or pay higher interest rates. He was forced to choose the former, and ended up unilaterally breaking collective agreements his own government had signed, forcing public servants to take unpaid furloughs. So much for the marvels of eternal deficit financing.
As for taxation, capital is mobile. Ratchet taxes up too high, and it flees. Particularly in our globalized world.
All of which means that Wynne's and Horwath's spending promises are probably nonsense, at least to a degree. Put another way, some of them will be broken. Not exactly a political first – promises are broken all the time – but worth bearing in mind.
Then there's Doug Ford and his Progressive Conservatives.
Ford is something of a boor, which explains Horwath's rising fortunes; clearly, a lot of Liberals can't stand Wynne, but can't bear the thought of voting Ford, either.
Some of the things he's saying are refreshing, though, at least superficially.
Ford would do away with Ontario's rather pointless cap-and-trade carbon tax.
He's for allowing corner stores to sell beer and wine, which would be great, but which Wynne and Horwath, in thrall to the province's powerful public service unions, refuse to consider (Horwath actually says it's a matter of "social responsibility," as though Quebec, which has allowed wine and beer to be sold in convenience stores for ages, is a heartless, irresponsible place).
Ford is also for allowing private sale of cannabis once it's legal, rather than creating a new government monopoly, as Wynne plans. Super. If corner stores can sell tobacco, they can sell pot. (For the record, I refuse to judge Ford for having dealt cannabis himself in his youth; I've always considered that a noble occupation).
And while Ford, too, is talking about subsidizing child care and dental care, at least he wants to means-test it and restrict it to those most in need (yes, yes, means testing can be embarrassing for people, but it's not unreasonable. Income tax is essentially means-tested).
The trouble with Ford (other than the boorishness thing) is simple: he is no more credible than the other two. He has not explained how he would pay for his tax cuts, or how he would balance the books, or what he would replace the carbon tax with, assuming he believes in controlling the carbon footprint, and he would probably find it difficult, once in power, to make other changes, too.
Remember, former PC premier Mike Harris promised to privatize the Liquor Control Board of Ontario, which remains robustly un-privatized.
Ford also tends to pander to religious conservatives.
So the dilemma of the Ontario voter is understandable.
Some journalists are even pointing out that under Ontario law, voters can formally decline their ballot at the polling station, as an act of protest. And there's actually a None of the Above party running.
But someone must form a government. The best option is to read platforms and make a decision, on good old economic self-interest, if nothing else.
Meanwhile, a suggestion for my friend Heather Mallick: if she feels the need to give away more of her income, there are a multitude of worthy charities. And, unlike the political parties, they will tell her reliably and exactly what they'll do with her money.