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How Ontario Wound Up With A Bait-and-Switch Budget

05/24/2013 12:17 EDT | Updated 07/24/2013 05:12 EDT
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NDP Leader Andrea Horwath heads out from her meeting with Premier Dalton McGuinty today in his office for last-ditch budget deal. April 23, 2012 (Photo by David Cooper/Toronto Star via Getty Images)

Ontario's budget fails to deliver on its stated intentions -- prosperity or fairness. It is a bait and switch budget that promises one thing but delivers little substance.

With over 600,000 people out of work in Ontario, it's not surprising that jobs and the economy are top of mind for most people. Unfortunately, the Liberal NDP budget puts off bold action on job creation.

Small and medium size businesses were the only sector to create jobs during the recent recession. Their success is key to building more resilient local economies that weather global economic storms.

The best way to help local businesses create jobs is to lower taxes on the jobs they create. The easiest way to do this is to lower payroll taxes by raising the exemption level for the Ontario Employer Health Tax. Currently, the first $400,000 in payroll is exempt from the tax.

Instead of doubling the exemption level to $800,000, as the Green Party advocates, the Liberal NDP budget raises it by a paltry $50,000. The budget essentially gives businesses a break on hiring one new employee. So much for bold action.

Thanks to the NDP the budget prioritizes cars, instead of laying the foundation for future economic success. Despite the Premier's big talk about transit funding, there is only one revenue tool that provides a small fraction of what is needed to break gridlock's $6 billion drag on Ontario's economy.

There is absolutely no mention in the budget about the need to transform Ontario's economy to be a world leader in the emerging clean technology and low carbon economy. This short-sighted budget fails to deliver a clean technology innovation investment tax credit to spur job creation and new business development in the fastest growing sector of the global economy.

The Liberal NDP budget chooses to subsidize pollution and short-change poverty reduction. The government with the support of the NDP continues to spend a billion dollars to subsidize energy consumption that, without a means test, mostly benefits the wealthy. Meanwhile, the budget fails to find the $340 million needed to transform social assistance programs to reduce poverty.

For all the rhetoric about fairness, the budget is silent about the need to create fair, fiscally responsible schools. Instead of attacking teachers, closing schools and laying off education support staff, the Green Party believes Ontario needs to merge the best of the Catholic and public school boards. Ending duplication could save between 1.2- and 1.6-billion dollars.

Budgets are about choices. These choices define who we are and who we want to be. In challenging times, financially responsible budgets require governments to confront vested interests. The Liberal NDP budget could have closed corporate tax loopholes to support small business job creation. It could have started a conversation about fair and fiscally responsible schools. It could have had an honest conversation about the financially unsustainable subsidies for big energy consumption.

But it didn't. Instead, the budget fails it's own test to deliver prosperity or fairness.