Martin Regg Cohn: The high cost of lower taxes in Doug Ford's disrupted Ontario
On June 7, Ontarians voted for a new governing party.
On Thursday, Ontario got a new governing philosophy.
Premier Doug Ford’s self-proclaimed “Government for the People” has declared itself hostile, in principle, to taxation of the people:
“Your new government believes that no dollar is better spent than the dollar that is left in the pockets of the taxpayer.”
Taxes that pay for health care, education, transit, policing, and safeguarding the environment are best left in the pockets of the taxpayer? We shall soon see how far Ford’s “shock and awe” tactics take us.
Thursday’s throne speech was not like any other. For none before has proclaimed, on its title page, “A Government for the People.”
Nor has any other achieved the twin feats of announcing cuts while denouncing “oppressive taxes” — notably a supposedly “punishing carbon tax” that adds mere pennies to the price at the pump.
Who knew the people of Ontario were so oppressed and punished as to dream of political liberation? And that their appeals would be answered in the last line of a speech read aloud by Lieutenant Governor Elizabeth Dowdeswell:
“Help is here.”
The phrases Dowdeswell was required to read, in her capacity as representative of the crown, are of course a familiar echo of Ford’s famous “for the people” campaign rhetoric. In that sense, the speech from the throne was less a roadmap for the way ahead than a restatement, retrospectively, of an election manifesto.
It is also, a month after Ford’s victory, a reminder that his priority remains campaigning, not governing. Not merely through disruption but distraction.
This is a throne speech that confuses acting decisively with talking divisively:
- An updated health curriculum that brought sex-ed into the modern world when introduced to the classroom three years ago has now been suspended — and replaced with the old lessons backdated to the 1990s.
While going backwards on sex education might appease a minority of parents who insist they should have the final say on what happens in the classroom, it won’t protect today’s teenagers from the perils of sexually transmitted infections, the risks of pregnancies, the minefields of misunderstood consent, or the dangers of discrimination over gender.
- A time-tested cap-and-trade system that gave business the greatest flexibility to reduce greenhouse gas emissions, at the lowest cost to consumers, and with the highest certainty in meeting carbon commitments, is being undone.
But killing cap and trade won’t prevent a carbon tax from replacing it — potentially pushing prices even higher for consumers and businesses. That’s because cap and trade actually lowers the overall cap on emissions, while a carbon tax requires governments to set taxation levels higher and higher to change people’s behaviour. Unless the goal is to put any action on global warming in the deep freeze?
- The Hydro One CEO whom Ford had long lampooned as the “Six Million Dollar Man” for his supersized annual income has now been sidelined. While the government boasted that the entire board and CEO Mayo Schmidt were out the door with “no severance,” it later emerged that they had compromised on Schmidt taking early retirement — allowing him to cash in on more than $8 million in various stock options.
The Hydro One upheaval has, unsurprisingly rattled investors leery of a partially privatized utility being so exposed to political meddling by a government that remains its biggest shareholder (holding nearly half its stock). With the share price tumbling by 3.2 per cent in response to the moves, the province’s holdings were suddenly worth about $182 million less (not counting steady declines in recent months as the Tories kept talking down the company). That seems an awfully high price to pay for scoring political points, because cutting an oversized salary down to size — while satisfying — won’t reduce the average hydro bill by more than 2 cents a month, no matter how much Ford claims his motivation for this manoeuvre was to rein in rates.
As popular as these shock-and-awe announcements and denouncements might prove to be in some quarters, it’s worth asking how they will improve people’s lives, or even their pocketbooks.
Schoolchildren of all ages are now being left to their own devices in the internet era; the government is giving up on climate change, until it is forced to give in to a federal carbon tax; and Ontario’s electricity system has been thrown into even greater and costlier disarray thanks to political meddling.
Shock and awe is merely the opening act. Shock and cuts are coming next, as Ford moves on his campaign promise to slash taxes that are best “left in the pockets of the taxpayer.”
As the throne speech warned, “the road ahead will not be easy.”
Not to worry. Reading her lines, the lieutenant governor offered this reassurance to people Thursday:
“A new day has dawned in Ontario.”
Just as Ford said every day on the campaign trail. And every day since then, until day turns into night.
Martin Regg Cohn is a columnist based in Toronto covering Ontario politics. Follow him on Twitter: @reggcohn