There are several reasons why Ford would favour an early election. Pictured: Ontario Premier Doug Ford and Finance Minister Peter Bethlenfalvy. Photo Credit: Doug Ford/X.
In this week’s Economic Update, Ontario Finance Minister Peter Bethlenfalvy stated that higher tax revenues and reduced costs of borrowing as interest rates are declining left the province in a fiscal position that was better than anticipated. Hence, the government has decided to send a rebate cheque of $200 to every citizen in the provinces, including children. This means a family of five can expect a one-time windfall of $1000. Whoopie!
Despite the celebratory nature of being able to feed back some of Ontarians own money, the data in the Economic Update showed that Ontario still faces a deficit for the 2024-25 fiscal year of $6.6 billion. As the $200 cheque program is estimated to cost about $3 billion, Ontario’s deficit could basically be cut in half if the government hadn’t decided to share the wealth in this very limited, one-time fashion. And even when the budget will be balanced, estimated to be in 2026 in this financial update, Ontario still faces a daunting debt which is trending toward a half a trillion dollars. The notion that Ontario’s finances are in great shape is clearly not true.
So, what does seem to be the rationale behind the $200 cheques being promised by Ford and his colleagues? The most probable reason is Premier Doug Ford’s apparent desire to hold an early election, likely in the Spring of 2025. If regular election timing were to prevail, the next Ontario election would take place on June 4, 2026.
There are several reasons why Ford would favour an early election. One is that he would like to run for re-election while Trudeau is still prime minister, as he can present himself as opposing the very unpopular Trudeau policies. Also, opinion polls show Ford still riding high over his Liberal and NDP opposition, and it’s always hard to gauge how long that will last. Economic data are not looking good, and some economists are predicting that Canada and Ontario will be going in to recession in the coming year. Recessions are never a good thing for incumbent governments.
The majority of Ontarians may well be grateful for a relatively paltry return of $200 of their hard-earned tax dollars, but there are many more positive things the Ontario government could do to improve fairness for taxpayers and help the ailing Ontario economy. For one, if the Ontario Progressive Conservatives truly believe their finances are in much better shape, as they implied during the Economic Update, they should reduce taxes in general. Canadians and Ontarians are overtaxed and significant portions of their tax dollars are wasted as we have seen with so many federal government programs that merely rewarded Liberal cronies and squandered billions on failed pandemic-related, climate and other policies.
The Ontario government has poured tens of billions of our money into such things as electric vehicle battery plants that are increasingly looking like white elephants, subsidizing third party groups that work against the interests of average Ontarians and expanding the size and cost of the provincial government with no improvement in services. An overall tax reduction would not only be good for Ontarians at a time when so many people are having difficulty making ends meet, but would also impose some fiscal discipline on the Ford government which has to date been anything but conservative in their spending behaviour.
Ontario has also refused to index to inflation the top two income tax brackets. This is pure theft. People in those two tax brackets are paying more tax only because inflation has increased, not because they are actually earning any more real income. This is an issue that the federal government and most provinces dealt with years ago, as it is so profoundly unfair and bad tax policy. The top two tax brackets in Ontario start at $150,000 and $225,000 respectively. These are certainly decent income levels, but hardly Warren Buffet territory. At these income levels, taxpayers ante up about 45 per cent in Ontario and federal income taxes on an income of $150,000 and 53.53 per cent on income over $220,000. Someone earning less than these amounts may not be particularly sympathetic, yet paying more than half of what you earn to government really should appall anyone, especially considering the crummy public services we receive for so much of our income.
In addition, the professionals, doctors and entrepreneurs we claim to want to keep in Ontario are the people situated in these top tax brackets. They don’t have much of an incentive to stay in Ontario when they are giving the government more than half of what they earn and inflation is eroding their real income every year. It’s not surprising Ontario has a doctor shortage and that entrepreneurs are leaving the province for greener pastures. The Ontario conservatives love to say they are “Open for Business,” but their unfair tax system is driving away the very people that help make the provincial economy a success.
The next few months will be very interesting in Ontario and federal politics, as we see whether Ontario will beat the federal Liberals to the ballot box or vice versa. Ontarians who will receive a little bit of their money back early next year from the Ford government shouldn’t be too grateful, as they deserve a much fairer tax system that wouldn’t take so much income away in the first place. But a couple of hundred bucks is better than nothing. We should view it as a good start.
She has published numerous articles in journals, magazines & other media on issues such as free trade, finance, entrepreneurship & women business owners. Ms. Swift is a past President of the Empire Club of Canada, a former Director of the CD Howe Institute, the Canadian Youth Business Foundation, SOS Children’s Villages, past President of the International Small Business Congress and current Director of the Fraser Institute. She was cited in 2003 & 2012 as one of the most powerful women in Canada by the Women’s Executive Network & is a recipient of the Queen’s Silver & Gold Jubilee medals.
