Ontario is "waiting for Drummond."
And unlike Godot, the former federal finance department mandarin and chief economist for the TD Bank is going to show up. Soon. And when he does, all eyes in political Ontario will be upon his recommendations for how the government can spend more intelligently, and less, leading us eventually back to balanced budgets.
Drummond has been told by the McGuinty government that raising taxes isn't an option for getting back to balance.
But that hasn't stopped the Canadian Union of Public Employees (CUPE) from pushing him to expand the boundaries of his mandate. So, when CUPE officials met recently with Drummond, they came with an Angus Reid poll they commissioned and what CUPE believes are some findings worth considering.
Not surprisingly, CUPE comes at this issue from a position of protecting its members' jobs. That's their job. They see Ontario's $16 billion deficit resulting not from massive overspending on public services, but rather from the Ontario government's efforts to protect Ontarians from the ravages of the Great Recession. And they fear draconian cuts will prolong the recession, making a balanced budget that much more elusive.
Their recommendations lie outside Drummond's mandate. But they're worth repeating here and debating:
1. Increase corporate tax rates to their 2009 levels.
2. Create new, higher tax brackets on the wealthiest Ontarians, namely, those making more than $300,000/year and $500,000/year.
3. Introduce a "Robin Hood" tax (0.005%) on all financial transactions of stocks, bonds, and currency.
4. Restore the Ontario capital tax on banks and insurance companies.
5. Eliminate the loophole exempting large employers from paying the Ontario health tax on their first $400,000 of payroll.
CUPE figures all those tax changes would yield an additional $4 billion to the provincial treasury --- not enough to balance the budget in itself, but if the numbers are accurate, it would get us a quarter of the way there. And the union does feel it has solid public backing on its quest to protect public services from Don Drummond's axe, so they showed me the results of their poll.
For example, a good chunk of Ontarians seem prepared to see their taxes raised if it means keeping services they depend on. While 34% said NO to any tax increases, 30% said maintaining services was more important, and they would accept a tax increase to do so. That's a fairly narrow difference, given that conventional wisdom in Ontario is that no tax increases at all are acceptable.
When asked what spending recommendations the public has for the Ontario government, 47% of those surveyed said "maintain current spending levels," while 24% said increase it more. Just 22% urged the government to cut spending. (That 22% was more conservative, male, earning more than $100,000/year, and/or retired.)
Again, not surprisingly, most of those surveyed wanted taxes raised on corporations, rather than spending cuts, to reduce the deficit. Fully 83% strongly or moderately supported increased taxes on banks and the financial industry to close the budget deficit. 81% supported increasing taxes on all corporations. Just 42% said cut spending on programs and services. And only 17% favoured personal income tax increases.
Those are the kinds of numbers that are presumably impossible for governments considering halting further corporate tax cuts to ignore. And, in fact, fully 75% said tax cuts for the financial sector should be postponed to help balance the books. (In this minority parliament, it seems likely the Liberals, supported by the NDP, will postpone further corporate tax cuts.)
And there was modestly more support for a "Robin Hood" tax: 47% supporting a tax on stocks and bonds, 41% opposing. Currently, there are no taxes on the purchase of stocks or bonds.
Don Drummond himself was the subject of a poll question, with 48% agreeing with his mandate, just 41% opposing it. Having said that, 66% preferred his mission to be finding new revenue, rather than cutting spending. Drummond has repeatedly said, his mandate does not include new tax revenue.
The numbers seem to suggest Ontarians recognize the need to eliminate the deficit. But they clearly don't want the govenrment imposing draconian cuts to get them there.
If the government thinks the deficit is a huge evil needing tackling, the public isn't necessarily there with them. When asked if the province were to get more revenue, where should it go, 24% said into additional health care services, while just 21% said deficit reduction. 18% said reducing taxes further should be the priority.
On CUPE's recommendation to hit high income earners with an additional surtax, there was widespread support: 82% support a surtax on $300,000+ earners, 90% on those earning more than half a million dollars per year. (Given that there can't be more than 1% of Ontarians making that much money, it's perhaps surprising those numbers aren't even higher.)
CUPE says it agrees with the McGuinty government's desire to balance the books by 2017-18. It just disagrees with how the Liberals plan to get us there, if that path includes massive spending cuts. It also believes people care enough about maintaining good public services that they'd entertain some tax increases to keep them. And the Angus Reid polling seems to support that in certain circumstances.
Over to you Don Drummond and Dwight Duncan.













