Ontarians go to the polls on June 12. The Liberals' campaign platform is the provincial budget released May 1; the Ontario PC party released its platform May 14; the New Democrats released theirs May 22. Information here is subject to change. Please visit www.opseu.org/vote2014 for weekly updates.
The 2008-09 recession took a heavy toll on the Ontario economy. Government revenues fell, resulting in a provincial budget deficit. The deficit for 2013-14 was $11.3 billion.
Since 2009, the Liberals have reduced the deficit through cuts to public services, wages, and jobs. Liberal tax cuts for corporations have increased the deficit but have been partly offset by higher taxes for high-income individuals. The Liberals plan to eliminate the deficit by 2017-18 but say their main focus is creating jobs, not cutting the deficit. The 2014 Budget says that any public sector wage increases must be paid for by trade-offs in other areas, i.e., cuts to jobs or benefits.
In 2012, the NDP was successful in blocking the Liberal plan for further cuts to corporate income taxes and got the Liberals to increase tax fairness by raising income tax rates for those earning more than $500,000 a year. These two measures alone are currently reducing the deficit by more than $1.8 billion a year. The NDP says it would eliminate the deficit by 2017-18, the same schedule as the Liberals, but with certain revenue and spending changes.
The PCs do not believe Liberal spending cuts will pay off the deficit by 2017-18. PC leader Tim Hudak says he will pay it off one year earlier with much more dramatic cuts to public services, jobs and wages. Hudak vows to cut 100,000 public sector jobs and freeze all public employee wages for two years.
Public services and privatization
The Ontario government spends less per person on public services than any other province in Canada.
The Liberals plan to keep cutting spending until 2017-2018. They want to privatize more public services and are enthusiastic about public-private partnerships (P3s) to pay for infrastructure like hospitals, even though P3s cost citizens more. The Liberals are now talking about “asset recycling” and “unlocking the value of Provincial assets” but their proposals to change the way the LCBO, Ontario Power Generation, and Hydro One work are short on detail.
The party supports public ownership of the LCBO and the electricity system and has spoken out strongly against P3s. In its 2014 election platform, the NDP vowed to “limit the use of consultants” to save $150 million a year and would cut $600 million from program spending if elected but has not said whether the reductions would come from undoing past failed privatizations.
In addition to cutting spending on public services and jobs even more than the Liberals, the PCs favour privatization of most public service work, from building maintenance to IT. The Tories would “[a]llow Ontario and Canadian pension plans to invest in government-owned businesses like the Liquor Control Board of Ontario, Hydro One and Ontario Power Generation,” according to their platform. Such asset sales would reduce government revenues in the long run.
Tax cuts by the PC government of Mike Harris and the Liberal government of Dalton McGuinty continue to drain the provincial treasury of the money needed to pay for public services. Tax changes since 1995 still mean a net loss of $18 billion a year from public coffers.
The Liberals have cut taxes for corporations and reduced the money available to pay for public services. Cuts to the corporate income tax rate in 2010 and 2011 now cost roughly $2.3 billion a year. Elimination of the Capital Tax by the Liberals saves business $2.4 billion a year. Personal income tax cuts designed to compensate consumers for the HST have meant less money for public services. The 2014 budget includes tax increases totaling $900 million a year, mostly from higher income taxes on individuals earning over $150,000 a year.
As part of its focus on “affordability,” the NDP favours reducing taxes on essentials like home heating fuel and also opposes tax or fee increases for “middle class” Ontarians. The NDP platform calls for raising the corporate income tax rate to 12.5 per cent (one percentage point), to raise roughly $720 million a year over the next four years. The NDP proposes cutting the small business tax rate from 4.5 per cent to 3 per cent and supports targeted tax credits for companies that create jobs and invest in manufacturing to “reward job creators.”
The Ontario PCs claim that “tax cuts create jobs” even though the last decade has been a time of falling corporate taxes and falling business investment. In general, Tories do not recognize the role of public sector spending in economies. They ignore the high economic and human costs of the public service cuts that result from tax cuts. The PCs have vowed to cut the Corporate Income Tax rate from 11.5 per cent to 8 per cent, – at a cost to public coffers at least $3 billion a year. This would be $3 billion added to the province’s debts – or cut from public services.
Collective bargaining has played a fundamental role in making sure that working people receive a fair share of the wealth they create. Laws designed to promote union organizing and collective bargaining help build a more equal society; laws designed to weaken unions have the opposite effect.
After using Bill 115 to strip teachers and other education workers of key negotiated benefits in 2012, the Liberals are courting the labour movement again. “I know how important unions are – and continue to be,” Premier Kathleen Wynne said last fall. Under Wynne, the Liberals have spoken out against PC plans to gut the province’s labour laws, and have proposed modest but positive changes to provincial employment standards. The Liberals have vowed to increase the minimum wage to $11 on June 1 and then index it to inflation.
Of the major parties, the NDP has been the most pro-union. Private members’ bills by NDP MPPs have proposed anti-scab legislation for Ontario, card-based certification for all workers, stronger protections for employees during organizing drives, easier access to arbitration for first contracts, and other improvements. The NDP favours increasing the minimum wage to $12 an hour within two years.
The PCs hope to weaken unions by tying them up in red tape and by stopping them from taking part in democratic debate, all with a view to driving down wages for union and non-union workers alike. One PC proposal would remove seniority provisions from collective agreements so that “every Ontarian [has] a right to apply and compete for a government job opening.” This plan would open the door to favouritism in hiring and turn public service into a reward for political service. The PCs oppose increasing the minimum wage.
Ontario’s official unemployment rate peaked at 9.4 per cent in August 2009 following the 2008-09 recession but has since fallen to 7.4 per cent. Nonetheless, many jobs are part-time, temporary, or low-wage self-employment, and 28 per cent of workers make $14.25 an hour or less. At last count, 555,000 Ontarians want to find work but cannot.
The Liberals’ jobs strategy has two main prongs. First, they are investing in infrastructure, spending on roads, bridges, hospitals, and transit at levels not seen since the 1960s. Second, they are making targeted investments in companies that promise to invest and create jobs in Ontario. The 2014 Budget proposed a Jobs and Prosperity Fund which would spend $2.5 billion over 10 years. The stated goal of the Fund was to “secure business investments that focus on job-creating innovation, productivity and going global.”
The NDP rejects no-strings-attached corporate tax cuts and has put forward plans for tax credits that companies could only receive if they made investments and created jobs. In 2013 the NDP successfully lobbied the Wynne government for $295 million in funding to create jobs for young workers.
The PCs’ ideal economy is one that delivers high profits made possible by low wages for workers and rock-bottom taxes for business. The Tories ignore the fact that low wages mean weak consumer spending and low taxes mean weak public services and less public investment in infrastructure, education, and the economy generally. The Tories oppose any targeted investment by government – even investments that directly create jobs – and favour tax cuts to all companies whether they create jobs or cut them.
About the Green Party of Ontario
The Green Party of Ontario has no seats in the Ontario legislature but is the province’s fourth most popular party in public opinion polls. The Green Party’s platform, released May 13, focuses on quality-of-life issues like a clean environment, public transit, and reducing child poverty; the party is pro-small-business but mainly silent on labour rights, public services and privatization. The party platform is available at http://www.gpo.ca/sites/gpo.ca/files/attachments/gpo_platform_2014_05_13_web.pdf