Saturday, May 03, 2008

Harper Should End Equalization and Cut Personal Taxes: No Blank Cheque for McGuinty

Now that Ontario Premier Dalton McGuinty has taxed and spent Ontario to the verge of a recession he is bleating to Ottawa that equalization is unfair. When the good times were rolling and taxes were pouring in to his treasury he didn't seem to mind. Now that he wants to keep spending like a drunken sailor he complains to Harper that it is all so unfair.

Equalization is unfair. It is merely province-to-province welfare. The taps on this misguided program should have been turned off years ago.

HOWEVER, this does not mean that Mr. Harper should just write a $5.6 billion cheque to McGuinty because he will just waste it on his stupid pet projects. The $13 billion in federal equalization should end and be given back to the taxpayers to whom it belongs through broad-based personal tax relief.

Most of that would be in Ontario because, as McGuinty points out, Ontarions pays the most.


The Beast said...

But I thought equalization payments (or Qualization as you say it), were meant to allow each province to have similar standards of living - thus equalize the playing field. How would ending this program and introducing broad based tax cuts benefit everyone?

Steve said...

The Beast: Economics is obviously not your strong suit.

Give the money to McGuinty and he would be handing it out to declining industries like manufacturing, at the expense of you and me and firms with better prospects. It is simply money not well spent.

The handout game (sorry targeted investments) does not seem to be working out as planned. Best to let the taxpayer spend it as they deem fit.

Christopher said...

I always thought the equalization program was the worst thing someone could do.

Here are the facts:
Provinces that recognize more business friendly policies, such as less regulations and lower taxes. As well as lower taxes on the population, result in a province with a higher standard of living.

This is an undisputed fact.

Provinces that just spend on corporate welfare and all these stupid pet projects, which require higher taxes to do so. This all results in the populations standard of living going down.

Why should provinces that make the right moves give money to provinces that continuously make the wrong moves? That only encourages provinces like Ontario, PEI, etc to keep making these stupid moves.

If they ended this equalization package, Ontario would see their people become more upset and the population starting to move away from it. They'll eventually figure out which policies are working and which ones are not.

I'm reminded of a quote, but I don't remember who said it. Subsidize failure and you'll get more of it.

nbt said...

B\Equalization is definitely unfair, Kevin.

I guess it was implemented so as to balance out the policies which have favoured central Canada for decades...including excessive corporate welfare for Ontario's auto industry (including a signed Auto Pact agreement geared at favouring federal targeted subsidies to the southern part of that province) and Quebec's aerospace industry, not to mention, freight rate charges in eastern Canada, DREE and the NEP out west.

Not exactly fair policies, or better yet, smart policies.

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