ONTARIO – Ontario is on an unsustainable fiscal course, according to a new report by the C.D. Howe Institute. In “Fiscal Soundness and Economic Growth: An Economic Program for Ontario,” author Benjamin Dachis provides a roadmap for Ontario’s fiscal priorities in 2018/2019 and beyond.
The Economic Program proposes policy measures that bring the long-term cost of government in line with the revenue-raising capacity of the province.
The Economic Program makes recommendations in such key policy areas as healthcare, labour and education policies, taxation, housing and municipal affairs, as well as electricity and greenhouse gas policy.
As a first order of priority, the Economic Program adopts the fiscal presentations of the independent officers of the Ontario legislature – the Auditor General and the Financial Accountability Office – as the authoritative sources for future fiscal outlook.
“The medium- and long-term fiscal outlook for Ontario is dire,” said Dachis. “Our Program recommends the government restate the province’s books to reflect the Auditor General’s accounting treatment of pension assets and electricity-sector debt.”
Among the Program’s key recommendations:
- Adopt a sound long-term fiscal policy – which requires surpluses, not just balanced budgets – to meet the government’s debt-to-GDP target ratio of 27 percent.
- Replace the age-based drug supports of OHIP+ and the ODB with an income-tested drug benefit.
- Slow the increase in the minimum wage and focus on improving education to create economic opportunities for Ontarians.
- Private-sector retailing for alcohol and marijuana and the revision of tax schemes for both products.
- Lower high provincial business property taxes to create a level playing field across the province.
- Recognize the cost of raising children in the provincial personal income tax.
- Reduce high personal tax rates across the income scale.
- Pursue long-term cost savings in the electricity sector as opposed to short-term fixes that only add to the long-term cost of energy
“These and other policies in our Economic Program can balance smart increases in spending with the generation of new revenues and vital cost-savings. It is the road map Ontario needs,” concluded Dachis.
Full report here
