Higgs was able to put an HST cut on the table because his province’s finances are in such good shape. Pictured: New Brunswick Premier Blaine Higgs. Photo Credit: Blaine Higgs/X.
It’s a tale of two premiers.
New Brunswick’s Blaine Higgs has been disciplined with managing his province’s finances, reducing debt and paving the way for a massive tax cut commitment.
Meanwhile, Ontario Premier Doug Ford spends like a teenager with his first credit card and is driving Ontario’s finances into the ditch, while failing to deliver on substantial tax relief.
This summer, Higgs promised to introduce historic tax relief should he win re-election, with a two-percentage-point HST cut at the heart of his pitch to voters.
Ontarians could only dream of something comparable.
Why? Because Ford has spent the cupboard bare, never missing a chance to fritter away Ontarians’ hard-earned tax dollars.
Let’s look closer at Higgs’ and Ford’s records.
Both men were first elected in 2018.
When Higgs entered office, his province’s finances were a mess. New Brunswick’s debt was soaring, the budget deficit was large and hope for a balanced budget, let alone tax relief, seemed like a distant dream.
So Higgs got to work. He put his head down, reined in spending and balanced the budget. And once the budget was balanced, Higgs resisted the urge to spend big.
Instead, he reduced the province’s debt load by 15 per cent, trimmed back the province’s high income tax rates and produced six balanced budgets in a row.
Ford also inherited a mess. But unlike Higgs, Ford didn’t even try to pick up the pieces. In Ford’s first budget as premier, he increased spending to $5 billion over and above what his free-spending predecessor had budgeted.
And things never got better.
Ford increased Ontario’s debt burden by $86 billion in just six short years. Under his watch, Ontario’s debt crossed the $400-billion mark. And debt interest payments now cost more than $1 billion per month.
Government spending in Ontario today is $57 billion higher than it was when Ford first arrived at Queen’s Park.
And all of this new spending can’t be attributed to inflation. Over the past six years, Ford increased government spending by $25 billion over-and-above the rate of inflation.
This year, New Brunswick has a balanced budget. By contrast, Ontario’s budget is in the red, big time. After years of poor fiscal management, Ontario’s deficit is projected to be $9.8 billion.
Enter Higgs’ promise to cut the HST.
New Brunswick’s sales tax is currently at 15 per cent, with the feds getting five points and the province 10. Higgs wants to slash that provincial number down to eight.
That’s a big deal. Once fully phased in, the average New Brunswick family will save nearly $1,000 a year. Everything from clothing to gas to summer vacations will be more affordable. This is a tax cut that will truly benefit everyone.
Back in Ontario, there’s no sign of major tax relief in sight.
Why? Because Ford has spent so recklessly that Ontario is simply not in a position to introduce a Higgs-style tax cut.
Higgs was able to put an HST cut on the table because his province’s finances are in such good shape. The province’s debt is lower than it’s been in years. And debt interest payments now make up just 4.9 per cent of New Brunswick’s budget. Here in Ontario, it eats up 6.7 per cent.
What does Higgs’ HST commitment show Ontarians? Leadership matters.
If Ford had been as disciplined as Higgs has been over the past six years, Ontario could be looking at an HST cut of its own.
Ford increased government spending by $25 billion more than the rate of inflation over his time in office. Cutting the HST by two percentage points in Ontario would reduce government revenue by just over $12 billion. Had Ford been disciplined, such a tax cut easily could have been achievable.
Spending paloozas might seem glitzy. But bold leaders make hard choices, improve the bottom line and save up for a big payoff down the line.
Higgs is a bold leader. Ford prefers the glitz.
Jay Goldberg is the Ontario Director at the Canadian Taxpayers Federation. He previously served as a policy fellow at the Munk School of Public Policy and Global Affairs. Jay holds a Ph.D. in Political Science from the University of Toronto.
