First-quarter figures reveal that Ontario’s projected deficit remains at $11.7 billion this fiscal year, meaning that it is now a structural deficit. Current unemployment figures indicate that Ontario’s rate is above the national average for the sixth straight year.
In light of this finance minister Charles Sousa announced that he is going on tour for ideas on improving Ontario’s economy. “A strong economy is a key part of our plan to eliminate the deficit,’’ Sousa told reporters. “Expectations for global economic growth have weakened”, his ministry announced. Of course there was no mention of uncontrolled and excessive government spending associated with Ontario’s continued nosedive towards insolvency…
Mr. Sousa is not alone in seeking economic solutions. Last week the Canadian Federation of Independent Businesses polled their 109,000 members on what their provincial governments should do to focus on helping businesses thrive, and specifically asked each member whether they believed “Reducing the deficit/debt is a priority for my provincial/territorial government”
Those of us who are members of the CFIB in Ontario have been concerned about ballooning deficits and debt for some time now, as well as property taxes, hydro rates, etc. Here is a summary of my responses to the poll, as a manufacturing business owner in Ontario, and a 27 year member of the CFIB.
Control Government Spending
In my industry of precision machining, matching public sector salaries has become impossible. We cannot pay toolmakers and skilled machinists nearly as much as teachers and other government workers now make. Their salaries have become too high and this makes it difficult to recruit private sector workers and it has driven property taxes to exorbitant levels.
Another contributor to the unaffordable public payroll is the arbitration process, which needs to be fixed because it results in grossly inflated and unfair public sector payouts. Arbitration reform is supported by most Ontario mayors and was highlighted by the Don Drummond report, yet the Liberals with the help of the NDP voted against reforming it. This decision was harmful to Ontario’s economy because all arbitration payouts are on the backs of the beleaguered private sector taxpayers.
By way of example: in the township of Scugog six firefighters were awarded 26.7% reportedly backdated for four years. How many people reading this from the private sector can report pay increases such as this? For Scugog residents it caused an automatic increase of 2% in property taxes.
We need to check the incestuous relationship between government and unions. Public sector unions buy the government into office, and then the government rewards them with remuneration and pensions that cannot be matched in the private sector. This has become a vicious cycle that ultimately leads to higher taxation burdens on businesses and taxpayers.
Ontario’s gross debt is nearing a terrifying $300 billion and continues to grow with no semblance of control or discipline. This doesn’t even include a $100 billion unfunded pensions liability, or a $13 billion WSIB liability. Keep in mind that today’s debt is tomorrow’s taxes. Businesses know that they will be targeted to pay for this, per usual. Debt interest is now our third biggest expenditure yet interest rates are at historic lows. They can only go up and when they do, servicing the debt will be debilitating if not impossible. This will chase businesses away.
Hydro rates are no longer affordable. By the government’s own projections they will increase 40% over the next 5 years. Time of use policies punish businesses for operating during daytime. How can you have a welcoming business climate when your hydro rates are on track to become highest in North America?
Eliminate Red Tape
The forthcoming trades tax is abhorrent. Businesses need less regulations and fees, not more. Red-tape and nanny-state regulations are already excessive, and every year seems to bring more of them. The trades tax is widely opposed among the industries it is being imposed upon and needs to be abolished.
Ontario has a problem with accountability. The Liberals refuse to allow the Ombudsman into ORNGE, Municipalities, Hospitals & universities. What do they have to fear? To refuse Ombudsman oversight into ORNGE after all that’s happened there is unconscionable. Without oversight there is no accountability, and ultimately businesses will have to pay the costs of these corrupt arrangements; all of which enrich government friendly unions and special interest groups, but never the private sector taxpayers.
Businesses don’t feel they are getting value from government. We see enormous funds squandered via the gas plant scandals, Ehealth, etc. Small wonder our deficit isn’t improving. And since businesses are the only real contributors to Ontario’s finances, they are on the hook for all of this, and they know it.
Over the last decade we have seen the size and salaries of the public sector swell out of control, at many times the rate of inflation. Pensions and post retirement benefits are unaffordable and unmatchable in the private sector. This has lead to structural deficits and ballooning debt. Businesses are overregulated, hydro is too expensive, and the government lacks accountability.
The way things are in Ontario nowadays, I would suggest that anyone thinking of coming here to start a business should go get their head examined. Finance Minister Sousa I hope you really are listening!
Robert Viles is a business owner in Hamilton Ontario, a member of the CFIB and the Canadian Taxpayers Federation, and a supporter of Fair Pension For All.
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