April 14, 2011


By Liz Rowley

     Setting the stage for the October 6 provincial election, the Ontario Liberals have crafted a budget intended to scare voters away from the provincial Tories, while wooing Big Business for their continued support.
     The budget speech announced that recovery is in full swing, but the world is an unstable place and thus "reforms" are necessary. It slams the "choices we reject" ‑ a reference to Tory leader Tim Hudak's agenda, which includes a promise to cut one or more points from the HST's current rate of 13%. 
     A 1% cut to the HST is a $3 billion cut to health and education, say the Liberals. "The choices we (Liberals) reject" are slashing social assistance (Mike Harris' first act was a 22% cut); slashing infrastructure spending leading to job losses and disrepair in the post‑secondary sector; laying off 33,000 teachers, 12,000 doctors, 37,000 nurses, and cutting funding for 80% of long term care beds. Each item is equivalent to about $3 billion.
     But the Liberals are also preparing voters for new attacks on public sector workers and services.  Declaring that "we must live within our means", 1500 jobs will be cut in the next two years, on top of the 3400 in the 2009 budget.
     A further $200 million in cuts to major agencies in the next two years will mean a 10% cut to funding for the Ministry of Housing and Municipal Affairs, a $9 million cut to Children Aid, and a 15‑30% increase in child care fees to parents, along with the closure of some child care centres. This is the tip of the iceberg; watch out for what's coming.
     The government will also establish the "Commission on Reform of Ontario's Public Services", chaired by TD Bank's former Chief Economist Don Drummond. This is one to watch. And in an ideological tip of the hat to the far‑right, inmates will be moved to new super jails, and there will a reduction to the gravy in executive office budgets at Ontario hospitals and universities (whether any currently exists or not).
     For the election, the government is offering 60,000 new spaces in universities and colleges; many will be filled by international students seen as revenue generators with their extraordinarily high tuition fees.
     Full day kindergarten will be extended to cover 200 more schools by September, but it will be 2014 before all schools are covered. For health, there is a paltry $15 million over three years for breast cancer screening; $93 million for mental health services aimed at youth; and increased drug coverage for seniors and others covered under the (means‑tested) Ontario Drug Benefit Program.
     For Big Business, massive provincial tax cuts bring the CIT rates down to 10% in Ontario; much lower than in the Great Lake States which are Ontario's main US competitors. These tax cuts were engineered by the Harris Tories ten years ago, and carried through by the Liberals. Combined with the federal CIT rate, the Marginal Effective Tax in Ontario will be 25% next year ‑ unprecedented in post‑war Canadian history.
     Then there is also the HST, which the government dares to claim is being passed on in savings to consumers by 91% of businesses in the form of lower prices. The government also claims that the HST has increased purchasing power, though Statistics Canada figures show that personal debt levels are skyrocketing in Ontario. Purchasing power is declining as a result of rising food and home‑heating and fuel prices, and more expensive rents and housing.
     Not in the budget are the attacks on public sector bargaining rights, and the elimination of the right to strike for municipal transportation workers in Toronto. This is expected to wash across the province, pushed by right‑wing civic and provincial governments.
     The message to Big Business is clear: there is no need to switch support to the Tories. The Liberals can do the job, and will deliver.
     (Next issue: the outlook for the October provincial election in Ontario.)

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