A TD economist has postulated that Ontario will be a have-not province under Canada's Equalization Payments system by 2010. The current program of making poor people as
unhappy as rich folks, was rejigged in 2006 by the then Con Minister of Finance by the name of... err...Flaherty. Now Flabberty figures that someone broke his system because Ontario's current industrial infrastructure problems and Alberta and Newfoundland's oil money has shown some flaws in his logic.The real flaws are in his brain.
The real story behind this Equalization brew-ha-ha is that the artificially heightened price of oil has boosted the tax resources of the provinces that mine for fermented dinosaurs and reduced the taxing power of those provinces with a industrial base.
So what does Flabberty say about this? "Action needs to be taken by the Province of Ontario to join us, to partner with us to encourage economic growth in that province." Is the way he talks about Ontario and its Premier the way to encourage partnership? The action that Flabberty wants Ontario to take is to reduce corporate taxes. That is an utterly stupid thing to say on two fronts. First, reducing corporate taxes only helps corporations who make a profit, like the banks and oil companies, who fund the Con party. It is interesting to note that if the Ontario government were to reduce corporate taxes they would move towards have not status even faster.
So what is a government to do? If Ontario is classified as have-not then they will get funding from the Equalization pool, a pool that they contribute $20 billion per year to. Essentially they would be funding themselves. Not good.
The alternative is the wipe out Equali
zation completely, let Ontario keep its $20 billion and use it to cut tax rates. But, I hear the cry now, that would not be fair to Quebec and PEI, two of the most parasitic parts of Canada. Guess what? Who cares. It is time for Ontario to quit being the whipping boy for Flabberty and his fellow Cons.The only winner in this battle between Ontario and the Feds is the people of Ontario. Owing to his big foul mouth, there is no way that Flabberty will ever become the leader of the provincial Cons or Premier of Ontario.
By the way, a word to the wise about economists. It is said that if you ask 20 economists a question you will be 21 answers.
2 comments:
Yep, once again a Liberal instituted program is now the fault of the Conservatives. I have long been of the opinion that the whole equalization scheme was just another governmental intrusion into provincial jurisdictions and, noble as the concept was, it was being bastardized by the political process.
However, unlike the Liberal supporters, who want to wash their hands of the whole deal much like they do with the biofuels disaster they supported, I don't try to blame those who inherited the mess.
Give McGuinty back his 20 billion and he can push ahead with his high tax, welfare-state Utopian vision for Ontario.
Powell Lucas makes a good point. Too bad he does not understand what the Con feds did to the Equalisation formula when they came to omnipotence a few years back.
In 2006 they revised the formula to a 10 province average instead of a 5 middle-province average. When they did that Ontario was put even closer to the midline taxation per capita than they had been in 2005.
That was because Alberta's huge taxation capacity set the bar much higher that it was before.
Once again the Cons got it wrong for everyone except Quebec, the number one recipient of Equalisation payment by a country mile.
Post a Comment