Platform Primer: The Economy

Torontoist

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Platform Primer: The Economy

With Ontarians dealing with a lingering recession and daily scare-mongering headlines, the economy is really the central issue in this election. Here's how the parties are saying they'll put us back to work.

In the run-up to the provincial election on October 6, we’ll be comparing the major parties’ platforms on issues that matter to urban voters.

The economy is a meta-issue, or a super-plank, the issue under which all other issues are subsumed. If the economy doesn’t work, then there’s no money to pay for any of the programs and promises that get tossed around at election time.

Fortunately, the politicos have you covered. In these times of “are we/aren’t we in recession” speculation, the oft-stated concern of all parties is making sure Your Family is working (except for children and seniors, who should be at school being educated, or at home being dignified, respectively).

So how are they planning to restore Ontario to its gold-plated glory as the economic engine of Canada? Here’s what they’re saying.

Liberals
The Grits have put their money on green energy as the best way to kick-start the economy back to life and keep it competitive in the long run. The Green Energy Act of 2009, which subsidizes producers of sustainable energy, and the much-criticized Samsung deal are key components of their strategy.

The economic premise behind the push to green is that as fossil fuels get more costly, renewable energy will become much more attractive. By building the industry out early, Ontario gets ahead of the curve and when the world is crying out for sustainable energy technologies, our factories are already up and running. In the meantime, all our displaced autoworkers and outsourced call centre reps get retrained and are busy building wind farms and installing solar panels. And, of course, paying taxes.

There’s an ancillary environmental benefit, of course; if we clean up our air and water, we can expect some (difficult-to-quantify) savings on health and car washes.

The sunny outcomes predicted are predicated on renewables achieving economies of scale that make them as attractive to individuals and business as fossil fuels. It also assumes that Ontario can compete effectively with other jurisdictions that are ramping up their eco-industry (China, for example).

The Grits also say they’ll triple the number of start-ups in the province through unspecified incentives designed to provide capital to new businesses.

The Liberals tout education and training as a key to economic renewal. Most would agree; while being a mighty hewer of wood or slayer of bears may make you an in-demand cottage guest, it’s really just a footnote on your CV and doesn’t prepare you for most 21st-century jobs.

Taxes: the Grits look to attract job-creating businesses to Ontario by keeping it cheap. Corporate taxes have been lowered by 20 per cent in the last four years, and the Liberals propose to cut them further. That said, Ontario already has lower corporate tax rates than many American states, so the bang for the buck on further reductions may be questionable.


Progressive Conservatives
The Tory economic agenda can be stated in one word, repeated three times: jobs, jobs, jobs! And not pie-in-the sky eco-jobs, but regular-folks jobs like… well, we don’t need to get into detail. But jobs, for sure.

The PC five-point job plan is focused on two things: blaming Dalton McGuinty for the global recession, and helping small business. The Tories promise a Small Business Bill of Rights to reduce red tape and government interference and make operating a business cheaper and more efficient.

Tim Hudak also notes in the jobs plan that a Tory government would “treat energy policy as economic policy—not as a social program,” which means ending subsidies to renewable energy businesses and letting the free market determine prices.

In another move more ideological than economic, the PCs propose to introduce laws that would require unions to increase transparency about their finances and allow union members to be able to decline to pay union dues that go towards political causes they may not support (do you hear that, Horwath?). While not necessarily bad ideas, it’s unclear why they’re part of a job-creation plan.

More practically, the Tories promise 200,000 more apprenticeship spaces over four years and to create a system where colleges match trainees with employers.

On the tax front, the PCs would join the Liberals in lowering the corporate tax rate, in addition to their promise to reduce consumer taxes on gas and hydro.


NDP
The NDP keep to the left with their economic plan, starting off by making it clear they would not support further corporate tax cuts, although they would keep rates below those of the U.S. They would, however, cut taxes for small businesses and give a 10 per cent tax credit to companies that create jobs in Ontario.

The New Democrats would also put in place policies to ensure that goods and services purchased by the Ontario government are made in Ontario, and they say that as a government they would be resistant to foreign takeovers of Canadian companies.

A more difficult commitment to live up to would be the requirement that resources produced in Ontario be processed in Ontario, a concept so broad as to be meaningless and so far-reaching as to be impossible (“Sorry, guys, we can’t cut any more timber until we can find somebody to build some more Ontario sawmills.”)

The NDP would also raise the minimum wage to $11 an hour.

Like the other parties, the NDP recognize that employers need educated employees and promise to spend a bunch of money on reducing tuition fees and increasing government subsidies for higher education.


Green Party
The Greens have a surprisingly fleshed-out economic plan for a party that has yet to take a seat in the Legislature and offer more ideas than any of the big three. Key points:

Like the Liberals, they would focus on creating jobs in green industries. Unlike the Liberals, they would favour partnering with small, local companies rather than partnering with multinationals like Samsung.

Like the Tories, they would take measures (unspecified) to remove government red tape that hurts small business. In a New Democrat twist, they would also favour (but not mandate) local suppliers when making government purchasing decisions.

Taking some leaves from the Book of Ford, part of their economic plan would be to identify and eliminate inefficiencies in government departments, and “work with all public employees and public sector unions to restrain the growth of the wages and salaries until the budget is balanced.”

Most controversially, the Green Party advocates tripling the cost of industrial-water taking and quintupling royalties on resource extraction, with the proceeds going towards conservation programs.

On the tax front, the Greens propose to postpone future corporate tax cuts but also to reduce the tax burden on families and small businesses (details not specified). Overall, the Green goal would be to reduce taxes on income and property, while “maintaining revenue with taxes on waste, pollution and unsustainable resource use.” They also advocate a carbon tax, to be rendered revenue-neutral through cuts in income taxes.


The Upshot
Firstly, all parties promise to balance the provincial budget no later than 2018, although the ratio of tax rises to spending cuts advocated vary. That said, if the province or planet slip back into recession, some of the revenue assumptions made will be rendered unlikely, and we may be having the deficit conversation again in the election of 2015.

The Liberals like what they’re doing now and promise to do more of it—growing green industry with government help and further reducing taxes on corporations.

The Conservatives would scrap the whole green thing, and focus on small business and lower taxes as a driver of job growth. Programs and tax cuts would be paid for through reducing government waste and cutting the public service, although no one has yet used the term “gravy train.”

The NDP want to spend our way out of tough times, with 80 per cent of the money coming from higher corporate taxes and “savings identified in Public Accounts and Expenditure Management review.” They also exhibit an anachronistic protectionism, which could be counter-productive in an unavoidably global economy.

Finally, the Greens have adopted a good grab-bag of workable ideas from across the political spectrum. However, their ideas around charging wasters and polluters for waste and pollution will be radical enough to shut them out at the polls again this year.

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