Business
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In February, Doug Ford won re-election as Ontario’s premier on a promise he would “Protect Ontario” and its economy, particularly from United States tariffs. But as his government prepares to table its next budget, it should eschew the parts of its election platform that would weaken the economy rather than protect it.
Truly protecting the economy would involve leaving more money in taxpayers’ pockets, but Ford’s platform proposed, among other new spending, $2 billion more on workers’ education and training through a mishmash of programs: $1 billion more for the Skills Development Fund, $705 million more for colleges and universities, $165 million for training for skilled trades, $100 million more for the “Better Jobs Ontario Program” and $40 million for various other items.
Why not leave that $2 billion in the pockets of workers so they can decide for themselves what investments they should make, whether in their own human capital or otherwise?
Ironically, after spelling out $2 billion in new spending to try to re-engineer the labour market, the Ford platform also included a section on protecting taxpayers. But many of the proposed policies do not protect taxpayers at all. For example, a rebate program subsidizing home renovation is a cost to taxpayers, not a saving. Somebody has to make up for the tax revenues lost by giving renovators this arbitrary exemption from their obligation to pay their share of taxes.
To actually protect taxpayers, the Ford government could reduce program spending and make good on its old promises to reduce taxes. Back in the 2018 election campaign, Ford’s Progressive Conservative Party promised to cut both personal income taxes and the business income tax — promises it still hasn’t fulfilled.
If these old promises should be revived and kept (better late than never), some new promises made in the PCs’ latest platform should be dropped entirely. In particular, the Ford government should cancel its new promised corporate welfare, including: a new $3-billion First Nations loan guarantee program, a new $500-million minerals processing fund, $300 million in manufacturing investment tax subsidies, $100 million for agricultural risk management, and $50 million in additional corporate welfare for Northern Ontario.
Instead of continuing to feed its corporate welfare addiction — it seems for any and every possible economic activity, the Ontario government is willing to find a way to shove significant costs onto the backs of taxpayers — the government should go cold turkey and quit.
Numerous Canadian and international studies have demonstrated the harms of corporate welfare, which usually have little effect on encouraging investment but instead produce a negative net economic impact after the higher taxes needed to pay for the subsidies are accounted for (as of course they always should be). Electric vehicle battery plants, to which the federal and Ontario governments committed tens of billions of taxpayers’ dollars, are no exception to this general rule.