How the Liberal budget will harm Ontario taxpayers

Surveying the damage.

(This column originally appeared in HuffPo)

By: Candice Malcolm

Ontario NDP Leader Andrea Horwath has drawn a line in the sand, and if Premier Kathleen Wynne crosses it, Ontario will head to the polls for a spring election. Much to the delight of the Canadian Taxpayers Federation, this line in the sand is about tax increases. Ms. Horwath has made it clear that she and her party will vote against the upcoming Ontario budget if it includes any “new taxes, tolls or fees that hit middle-class families.”

Proponents of fiscal responsibility should be dancing in the streets! Even New Democrats recognize that folks in this province are taxed to the limit.

If Ms. Horwath and the NDP are sincere in their stance on tax increases, however, they should not allow themselves to be fooled by the Liberal’s budgeting tricks and cute accounting.

Look at hydro rates, for instance. While not a tax per se, the soaring price of electricity in Ontario is directly a result of the Liberal’s mismanagement of the energy file over the past decade. Everything from the Green Energy Act that subsidizes wind and solar through artificially high rates for consumers, to the billion dollars flushed away for cancelled gas plants in Mississauga and Oakville, this government’s botched policies have caused tremendous hikes in our household energy bills.

Hydro rates have more than doubled for families since the Liberals were first elected in 2003, and are projected to rise another 43 per cent over the next five years.

In many ways, this is even worse than a tax hike on households, since folks pay for hydro with their after-tax income.

Of course, the majority of energy is generated and delivered by government-owned corporations, each with its own examples of exorbitant waste and mismanagement. The 2013 Auditor General’s report on Ontario Power Generation (OPG) found there were 40 vice presidents and directors on the Sunshine List with no title or job description, meanwhile, OPG’s pension faces a shortfall of at least 5 million.

And despite an ongoing probe by the Ombudsman, Hydro One, a crown corporation and Ontario’s largest energy distributor, continues to inflict “egregious errors and baffling bills” with “no rhyme or reason.”

It doesn’t stop there for families and taxpayers in Ontario. While Ms. Horwath’s line in the sand is likely in reference to proposed gas tax and HST hikes to fund Metrolinx’s Big Move project, we shouldn’t ignore the other proposed “revenue tool” to pay for transit expansions: debt.

Premier Wynne is toying with the idea of using bonds and taking on more debt to fund this project. This would be separate and in addition to the $11.7 billion annual provincial budget deficit.

Today’s public debt becomes tomorrow’s tax burden, as the debt will eventually be paid off through increased taxes, reduced services, or some combination of the two.

In the mean time, taxpayers forked over nearly billion in 2013 just to pay interest to bankers and bond holders on the existing debt. Ontario went through a credit downgrade by Moody’s after continuous deficits and the provincial debt surpassing a quarter of a trillion dollars — a move that will make future borrowing more expensive.

While NDP leader Andrea Horwath should be lauded for her concern of everyday taxpayers in Ontario, she should also remember that her party has propped up this tax-and-spend government up for the past two budgets, and allowed the government to grow the debt by nearly billion since the last election.

But better late than never when it comes to protecting taxpayers.