CTF: On tax cuts, Ford should go all in
After fifteen years of governments pursuing high spending, run-away deficits, and no meaningful tax relief, it’s time for Ontario Premier Doug Ford to think big.
Finance Minister Peter Bethlenfalvy is set to present the Ford government’s pre-election budget next month, which gives his team a chance to set the spending tone as the province heads to a vote.
In the Wynne government’s final budget before facing voters in 2018, former finance minister Charles Sousa rolled out $20 billion in deficit-financed promises to try to win over the support of the province’s voters.
Ford rightly called out the lack of wisdom in Wynne’s big spending financial decisions. Voters handed Ford a strong majority mandate and sent the Wynne Liberals packing.
That was the strong signal that people wanted change.
Wynne was not the first political leader to try to buy-off voters by using their own money. Conventional wisdom suggests that governments can improve their chances heading into an election by dangling expensive goodies to win the public’s favour.
That’s what former premier Wynne did in 2018. Prime Minister Justin Trudeau did exactly the same thing last year.
But if Ford and Bethlenfalvy are tempted to embark on a spending spree this spring, they should think twice. Voters elected the current Ontario government because Ford promised to protect taxpayers and bring sanity back to Queen’s Park after well over a decade of financial mismanagement.
And Ford should take decisive action before June’s election.
It’s time for the Ford government to stay true to the pro-taxpayer message that got his team elected in the first place. After four years of delays, it’s time for Ford to finally deliver on his promised tax cuts.
During the last election, Ford promised voters that he would cut middle class income taxes, lower the gas tax, and provide corporate tax relief. So far, he’s zero for three and the clock is ticking down. Ford’s promised income tax cut could save a two-income household up to $1,700 per year. That could help Ontarians desperately trying to pay down their credit card bills after years of pandemic disruptions.
Ford’s promised gas tax cut could save a family filling-up a minivan and a sedan once a week $390 per year. At a time when millions of Ontarians are nearing a financial breaking point, $390 in savings could help cover the cost of groceries for a family of four for about two weeks. Ford also pledged to cut taxes for Ontario businesses. He said a corporate tax cut would bring jobs back to the province and make Ontario a more attractive place in which to invest.
Two years into the pandemic, businesses need tax relief and reduced red tape now more than ever before. Media reports have also suggested that Ford is considering ending license plate sticker fees for Ontario drivers. For a family with two cars, that could save $240 every year. With inflation rising rapidly and cost-of-living soaring, families could use the extra cash.
Best of all, this tax relief can be delivered without deepening the deficit.
The government should return non-health sector spending back to pre-pandemic levels. Doing so would save over $10 billion per year, which would more than compensate for any revenue lost by leaving more cash in taxpayers’ wallets. It’s time for Ford to remember why he was elected in the first place. Voters wanted to end the Liberal spending spree, enjoy tax relief, and bring sanity back the province’s finances. So far, Ford has failed on all fronts, even discounting the impact of the pandemic. In the government’s March budget, Ford should put all of his chips on the table and bet on tax relief.