Ontario Tories promise low-income tax cut, scale back political fundraising rules in first fiscal outlook

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The provincial government provided a first look at how it plans to tackle Ontario’s finances, announcing in its fiscal update Thursday that it will cut three watchdog offices and eliminate the per-vote party subsidy while also scaling back political fundraising rules and reducing taxes for low-income earners.

The Progressive Conservatives said they have reduced the deficit by $500-million since they took office in June, with Finance Minister Vic Fedeli revealing that the province’s deficit now stands at $14.5-billion.

Mr. Fedeli said the government is committed to balancing the books in a “reasonable” time frame – but provided no details as to when that would happen.

“It’s going the right way. It will take time and it will take an extraordinary effort,” Mr. Fedeli told reporters at Queen’s Park.

Related: Ontario scraps rent control for new units amid housing crisis

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Mr. Fedeli said the province has saved $3.2-billion by reducing spending, including a hiring and spending freeze in the public service. But the government also lost $2.7-billion in revenue, including $1.5-billion from cancelling the previous Liberal government’s cap-and-trade program, which the province’s fiscal watchdog has said it would lead to a loss of $3-billion in revenue over four years.

The province is also axing three independent officers, with the fate of their staff unknown. The environment commissioner will be rolled into the auditor-general’s office, government officials said, and the French-language services commissioner and provincial children’s advocate will be part of the ombudsman’s office, by May, 2019. Ontario’s child advocate Irwin Elman said he had no official notice about the plan.

Mr. Fedeli said the government is giving the auditor-general and ombudsman “far more power” by consolidating the offices, and that it’s up to the independent officers to decide how they want to organize their staff.

NDP Leader Andrea Horwath criticized the decision, especially to do away with the office of the children’s advocate, which conducts investigations into cases at the Children’s Aid Society.

“Children who have the least amount of power, the least amount of voice, are losing their independent watchdog, and that is a shameful commentary on the government’s priorities,” she said.

Premier Doug Ford’s government also revealed it is scaling back the rules for political fundraising, reversing the previous Liberal government’s prohibition on politicians or top staffers attending fundraising events after a series of cash-for-access scandals.

Donation limits will rise to $1,600 from $1,200 by January, 2020, and the government is planning to repeal a section of the law prohibiting MPPs, party leaders and staff members from attending fundraisers. The government is also proposing to phase out and eliminate taxpayer subsidies to registered political parties and constituency associations by 2022.

Mr. Fedeli said the new fundraising plan will align with federal rules and, by eliminating the subsidies, it will save taxpayers $15-million by 2022-23.

“It puts the onus back on politicians to attend their own fundraisers, but no corporate or union donations can be accepted, so it very closely mirrors the federal guidelines,” he said.

Ms. Horwath, however, said it’s bringing cash-for-access back to the province.

“That was one of the things that disgusted Ontarians about the Liberals, and now we have the Conservatives bringing that back. It’s not necessary, it shouldn’t be happening,” she said.

Interim Liberal leader John Fraser said the rules should be the same for everyone and argued the government should proceed with caution.

“If they want to allow people to go to a fundraiser, as long as that’s disclosed and we do that in real time reporting, that’s a good thing,” he said.

Mr. Ford’s government also announced a new tax cut for low-income workers making less than $30,000 a year, a variation on Mr. Ford’s election promise to end income taxes to every worker making minimum wage.

Called the Low-Income Individuals and Families Tax credit, or LIFT, the initiative would provide about 1.1 million workers up to $850 in personal income tax relief and $1,700 for couples, the government said, ensuring a single person who works full-time at minimum wage pays no personal income tax.

Critics, however, have said raising the minimum wage to $15 an hour as the Liberals had planned would give low-income workers more money than the income tax cut would.

The government is also eliminating rent control on new rental units to increase housing supply across the province, but says rent control will remain in place for current tenants.

The government is also increasing the threshold for party status to 10 per cent of the seats in the legislature, which would currently change it from eight seats to 12, a move that will put status further out of reach for the third-party Liberals, who have seven seats.

The province will also expand the hours of alcohol sales from 9 a.m. to 11 p.m., seven days a week, and it is developing a plan to expand the sale of beer and wine to corner stores, grocery stores and big-box stores, “based on market demand, not government decree.”

With a report from The Canadian Press

Average annual Ontario

borrowing rates

3.5%

3.0

2.5

2.0

‘08-

’09

‘10-

’11

‘12-

’13

‘14-

’15

‘16-

’17

‘18-

’19*

*Projected avg. annual rate

Source: Ontario Financing Authority

Effective interest rate

(weighted average) on total debt

12%

10

8

6

4

2

‘90-

’91

‘95-

’96

‘00-

’01

‘05-

’06

‘10-

’11

‘15-

’16

‘18-

’19*

*As of Sept. 30, 2018

Source: Public Accounts of Ontario (1990–1991 to

2017–2018), and Ontario Financing Authority

Composition of total expense

By sector, in billions of dollars, 2018-19

$161.8-billion

Interest: $12.5

Other: $25.3

Justice: $4.9

Children’s/social services: $17

Postsecondary/training: $11.4

Education: $29*

Health: $61.7

*Excludes Teachers’ Pension Plan. Teachers’ Pension Plan

expense is included in Other Programs. Note: Numbers

may not add due to rounding.

JOHN SOPINSKI/THE GLOBE AND MAIL, SOURCE: OntariO

EcOnOmic OutlOOk and Fiscal rEviEw

Average annual Ontario

borrowing rates

3.5%

3.0

2.5

2.0

‘08-

’09

‘10-

’11

‘12-

’13

‘14-

’15

‘16-

’17

‘18-

’19*

*Projected avg. annual rate

Source: Ontario Financing Authority

Effective interest rate

(weighted average) on total debt

12%

10

8

6

4

2

‘90-

’91

‘95-

’96

‘00-

’01

‘05-

’06

‘10-

’11

‘15-

’16

‘18-

’19*

*As of Sept. 30, 2018

Source: Public Accounts of Ontario (1990–1991 to

2017–2018), and Ontario Financing Authority

Composition of total expense

By sector, in billions of dollars, 2018-19

$161.8-billion

Interest: $12.5

Other: $25.3

Justice: $4.9

Children’s/social services: $17

Postsecondary/training: $11.4

Education: $29*

Health: $61.7

*Excludes Teachers’ Pension Plan. Teachers’ Pension Plan

expense is included in Other Programs. Note: Numbers

may not add due to rounding.

JOHN SOPINSKI/THE GLOBE AND MAIL, SOURCE: OntariO

EcOnOmic OutlOOk and Fiscal rEviEw

Average annual Ontario

borrowing rates

Effective interest rate

(weighted average) on total debt

12%

3.5%

10

3.0

8

6

2.5

4

2

2.0

‘08-

’09

‘10-

’11

‘12-

’13

‘14-

’15

‘16-

’17

‘18-

’19*

‘90-

’91

‘95-

’96

‘00-

’01

‘05-

’06

‘10-

’11

‘15-

’16

‘18-

’19*

*Projected avg. annual rate

*As of Sept. 30, 2018

 

Source: Ontario Financing

Authority

Source: Public Accounts of

Ontario (1990–1991 to 2017–2018),

and Ontario Financing Authority

Composition of total expense

By sector, in billions of dollars, 2018-19

Health: $61.7

Education: $29*

Postsecondary/training: $11.4

$161.8-

billion

Children’s/social services: $17

Justice: $4.9

Other: $25.3

Interest: $12.5

*Excludes Teachers’ Pension Plan. Teachers’ Pension Plan expense is included in

Other Programs. Note: Numbers may not add due to rounding.

JOHN SOPINSKI/THE GLOBE AND MAIL, SOURCE: OntariO EcOnOmic

OutlOOk and Fiscal rEviEw