politics
Queen’s Park Watch: Playing Budget Roulette
The proposed NDP tax on the wealthy looks good on paper, but don't expect to see it happen.
Well, this is awkward. On Tuesday NDP leader Andrea Horwath announced that if the government wanted New Democrat support to pass the budget, they should throw in a two per cent tax increase for Ontarians making over $500,000 a year. The NDP say the hike would raise around $570 million annually (the Ministry of Finance estimates $440 million), to be put towards the removal of HST from home heating bills, subsidized day care, and the Ontario Disability Support Program.
It’s a smart move for Horwath, because the “make the rich pay” sentiment will get some traction in Lumpen-Ontario where there’s little sympathy for the horsed and yachted set, and most of the latter probably weren’t queuing up for NDP lawn signs anyway.
It also makes life difficult for Premier Dalton McGuinty. While the proposal won’t look outrageous to much of the voting public, accepting it would mean going back on his commitment not to hike taxes.
McGuinty hasn’t ruled out the idea, saying only that he doesn’t want to respond to a series of one-off requests and that he’ll wait to see what else Horwath wants before answering. However, his tone has been chilly, and there’s really no chance he’ll roll over on this one, since it’s all political downside for the Grits.
Beyond the problem of his no-tax promise, even if tapping the rich like a Rosedale panhandler proved popular, the NDP would get all the credit. In the meantime, the Conservatives and their pals in the press corps will dub the Premier “Comrade McPinocchio” or similar, to the great enrichment of political discourse in the province but to McGuinty’s disadvantage in the next election.
Which will be a while yet. In spite of McGuinty’s inevitable rejection of the proposal, neither he nor Horwath want to burn cash and goodwill on another campaign so soon after the last one. Releasing the golden-goose tax proposal early and as a standalone works for the NDP because it grabs the spotlight and with minimal political cost reaffirms their status as the champions of single moms/working families/poverty activists. However, Horwath has left the door open to negotiation, framing the proposal as a request rather than a demand so that a Liberal refusal doesn’t have to trigger an election.
The Grits will have to make concessions somewhere, of course, and there will be more sparring before an accord is reached (watching the process unfold must be frustrating to Tory leader Tim Hudak, who—having having handed Horwath the steering wheel by rejecting the budget outright—is now reduced to the role of powerless bystander, desperately issuing sullen, unreadable press releases touting his upcoming “Jobs, Jobs, Jobs!” tour of Ontario).
The exact nature of the future accommodation is hard to guess. It could involve less-costly NDP asks like a review of privatized health services or a hard cap on executive compensation in the public sector [PDF].
It will be interesting to watch. Ultimately, the NDP need a tangible win, while the premier doesn’t have a lot of wiggle room on a budget that already makes optimistic assumptions about “efficiencies” and the willingness of public servants to take a haircut for the greater good. And nobody wants to look like they’re blinking first.