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The Federal Budget: Good Or Bad News For Ontario? 

A 29.4 billion deficit for this year, $3.4 billion for transit over the next three years and more for those making up to $200,000 a year. But is the federal Liberal budget what Ontario needs?  Richard Mahoney, Peter Shurman and Tom Parkin take a hard look at what's in it for Canada's most populous province.

Richard Mahoney:

Today's budget sets the course for a plan for economic growth for our country. The investments in infrastructure, in our middle class and in our Indigenous people set the path for a stronger economy, with more fairness in the system. Finance Minister Morneau's first budget is pretty big news, and looks like a successful start for him.

Ontario benefits in many ways from the investments. But I bet Premier Wynne is most happy about the investments in infrastructure - this fits well with her plans and with the huge transportation needs we have here.

I also think that for any provincial government, it helps to have a federal government that listens to local priorities. Mr. Harper and his team made a habit of not doing that, and that leads to wastes of time and money, and halts progress that should happen. Ontarians expect their governments to work together every day to make progress on issues like growing the economy, investing in people, and higher education.


Tom Parkin:

Richard is putting a positive spin on what is a very disappointing document by avoiding talking about the budget part of the budget - the numbers.

For anyone annoyed with the King streetcar in Toronto, this budget didn't offer the immediate help Trudeau promised you. We were supposed to have $10 billion deficits to fund massive infrastructure - including transit - investment. But we have a $30 billion deficit for 2016/17 and only $3.4 "over three years" for transit - and for the entire country. That's only about $1 billion a year. Kathleen's Union Pearson Express alone cost $500M!

So pick your transit or traffic frustration, this budget did not provide the help that Trudeau repeatedly promised to give - as he would say - now.

And more - there is no funding to maintain the existing health care escalator.

Once again, they've resorted to the trick of stripping the EI fund. They are removing $7B from EI

Now, how much help is this to Ontario? Will it stop Kathleen Wynne from privatizing Ontario Hydro? Will it get her to accelerate transit development? Will it restore her education cuts? I don't think so.

Because - numbers. If we just want to talk rainbows and selfies, this budget is great. But for those who read numbers, it's not.


Peter Shurman:

Generally, this budget tells me it’s easy to spend money but very uncertain whether even the authors believe they’ll get value for big deficit financing.

The growth projections for Canada remain lackluster – maxing out at about 2.4%. The debt to GDP ratio remains manageable but so what – what is the measurable positive effect for Ontario?

Families will see a bit more cash flow and less red tape and our Native people will get a needed "hand up" but the urban and rural growth derived from strong and much needed infrastructure projects is being delayed - and at a cost of indefinite deficits.

So generally, I am less than impressed.

Ontario’s Liberal Premier, arguably, showed far more direct support for Justin Trudeau during the election last fall than any Premier for any federal candidate for that position ever. She had every reason to expect more than a tip of the hat because Ontario is hurting. She doesn’t appear to be getting one.

The manufacturing heartland of Canada has borne the brunt of offshoring in a way not so different from Alberta taking the hit for low oil prices. Oil prices will recover but Ontario has to re-invent and needs assistance.

Deficit spending, of which I am ordinarily no fan, has been used effectively before - even by the Harper government after the 2008/09 recession but from which Canada has never really recovered.


Richard Mahoney:

To Peter's point on the Premier, I think there is lots to help Ontario here. The Child Benefit will help middle class Ontarians trying to make ends meet. As will the tax relief for middle income.

He is right about deficit spending. I think one of the main reasons Trudeau and the Liberals won the election is they successfully argued that a slowing economy requires smart investments to stimulate the economy and create the conditions for long-term growth. Both other parties rejected that notion and unrealistically, promised balanced budgets.

We now know that the past government left behind a deficit, in spite of its talk about austerity. Most of that was because the economy was slowing a lot faster than they were claiming, and because their investments were not targeted towards future growth.

Ontario in particular will need its share of the smart investments outlined in this budget to create the conditions for growth in services, manufacturing and other sectors. Today is a start towards that.

Finally, if I can just add how happy I am that the government not only restored the investments Prime Minister Paul Martin made in our Indigenous peoples via the Kelowna Accord that Mr. Harper so wrongly killed as soon as he took office. Further, they added another $3.5 billion of investment in education, health care and water to help bring back some fairness and equity. We have underinvested in our Indigenous people. That is an injustice. It is the job of government to address injustices like that. Well done.


Tom Parkin:

Okay, but again Richard, your analysis of the budget includes lots of assertions and lofty words but few numbers. Why?

We were promised massive infrastructure investment. But the budget document shows Ontario will only receive $1.5 billion for transit over the next three years. That is not what was promised.

Also not what was promised - the stock option tax deduction remains. It costs $500M a year (which could be going to transit!). It is an unfair tax treatment created by Harper that allows someone with stock option income - usually corporate executives like Mr. Morneau - to pay tax on only half of their income from that source. When our needs are so great, how can this be justified

And I am not sure, Richard, of your view of "middle class," but - from a numbers point of view - $200,000 is the top 10% of income earners. Yet somehow they get the maximum benefit from your "middle class tax cut." But everyone earning under $45,000 gets nothing. This makes our tax system more unfair than under Mr. Harper.

And that tax cut costs over $4 billion every year - money we don't have, money that will be deficit financed.

So, free money for corporate execs. Maximum benefit of tax cuts for a $200,000 earner. But if you take the TTC, there is precious little for you.

This budget won't stop Wynne's Hydro One privatization. Won't stop her education cuts. Won't reverse her increased fees for seniors' prescriptions.

And the reason is - numbers.

This is a very disappointing budget, a missed opportunity.


Peter Shurman:

Yes, it is good to see that various entitlements for middle class families are being replaced by an indexed Child Benefit payment. Good news for First Nations and for unemployed oil patch workers. These are positive and in line with how voters cast their ballots.

But it’s not the most positive news for provincial governments, notably Ontario, where the Liberal government of the past 13 years has continually addressed these issues, to the detriment of infrastructure, and now finds itself trying to catch up.

Tom’s right - disappointing.

Infrastructure is the biggest item for Ontario. Ontario has introduced measures like "cap-and-trade" and asset sales in order to build infrastructure for the future. But however Ontario secures it, there is no doubt that we have an infrastructure deficit.

There is a feeling of desperation for more transit in Toronto and more highways to move goods around the province. Ontario has promised to live up to expanded GO Transit service. To do that, this province needs help from the feds and has been expecting it.

We’ve heard as much from the Premier and from people like the Mayor of Toronto. Ontario and Quebec are looking at receiving about two-thirds of about $3.4-billion.

The good news is they may be willing to fund up to 50% of some projects, but if Ontario gets maybe $400-500-million annually, we can build a few things but not anything near the range of projects required, especially in the GTA.

This isn’t the news Ontario hoped for.


Richard Mahoney is a former Liberal advisor to Rt. Hon. Paul Martin. Peter Shurman was the Ontario Progressive Conservative Finance Critic from 2011 to 2013.Tom Parkin is a veteran NDP strategist and frequent commentator on national issues.









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