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North rewarded
in Ontario Budget
by Michael
Erskine
TORONTO---The
Liberal government of Dalton McGuinty brought forward the first
budget of its mandate last week, presenting Ontarians with a
bill for government that will top $79.6 billion in expenditures
in 2004, a significant increase in taxes (labelled a health
premium) and sees the province still going $2.2 billion into the
hole in the bargain.
The budget has
literally brought howls of outrage from the opposition parties;
the most common label being used by the opposition to describe
the Liberals in interviews is 'liars.' It is a charge the
Liberals have not denied, albeit they argue they had no other
responsible choice but to renege on their pledge not to raise
taxes or run a deficit.
"Over the past
three years," said Finance Minister Greg Sorbara, "expenses in
this province went up by 22 percent. Our revenues went down by
0.6 percent. That was a relationship on the road to disaster."
The North has
faired relatively well out of the new budget however, with
substantial increases in FedNor funding, a new series of bonds
for Northern development, a major new investment in marketing
the North to go along with the bands and a significant
investment in Northern roads specifically earmarked in the
budget.
"Northern
Ontario is a region of boundless potential and the people who
live there ask no more than to be given the opportunity to
realize that potential," said Ontario Finance Minister Greg
Sorbara as he delivered his budget on Tuesday, May 18. "My
Northern caucus colleagues often often remind me that 90 percent
of our vast province is
Northern Ontario."
"The people of
Algoma-Manitoulin told us what their concerns were, particularly
with regards to health care, education and the need to help
Northern communities attract and maintain jobs," said
Algoma-Manitoulin MPP Mike Brown. "They spoke and we listened."
"What I see is
quite obvious, just another lie coming out of the Liberals,"
said Algoma-Manitoulin Progressive Conservative Riding President
Jim McBane. "When you see the raise in the taxes on your pay
cheque, remember it is hidden in your taxes."
Mr. McBane
said the difference in the Conservative approach is to reduce
taxes and let people decide where they want to put the money.
"What people
don't understand in all of this is that the $5.6 billion deficit
they keep talking about would not have existed had we been
elected," said Algoma-Manitoulin Progressive Conservative Riding
President Jim McBane. "We had a number of initiatives set to
reduce that amount, one being the sale of Liquor Stores. The
government should not be in the business of selling liquor, but
we would have still collected the taxes on it."
As to the
specific funds allocated to the North through increases to
FedNor, Mr. McBane was skeptical.
"Wait and see,
you watch, they will use it to reward their friends," he said.
"They will be using FedNor to thank the groups they want to
reward."
"Dalton
McGuinty came to the front door promising change last fall,"
said NDP Leader Howard Hampton. "Now he's sneaking in the back
door to lift your wallet."
Categorizing
the budget as a tax grab, Mr. Hampton said that families across
Northern Ontario will see their wallets emptied by the Liberal
budget, adding that they believe the budget to be one of the
most regressive budgets in
Ontario's
history.
Mr. Hampton
pointed out that the budgets of the ministries of Northern
Development and Mines and Natural Resources are being cut, and
despite Liberal claims to the contrary, he asserted that highway
improvements are also being slashed.
Drivers'
licenses will cost 50 per cent more, Mr. Hampton said, pointing
out that this hits the North especially hard because most people
need to drive due to lack of transit systems.
Mr. Hampton
also claimed that people in unorganized townships will end up
paying more as the Liberals move to increase the provincial land
tax.
Billings Reeve
Aus Hunt, president of the Federation of Northern Ontario
Municipalities was cautiously upbeat on the new provincial
budget.
"It's hard to
say exactly how it will affect us," he said. "We have been
discussing various points, but until we see the text on the
ramifications as to how everything will be carried out we can't
comment too much."
Mr. Hunt used
the provincial commitment to pick up 75 percent of the cost of
Public Health Units, as opposed to the 50/50 cost sharing that
was in place before as an example of why the municipalities are
being cautious with their comments.
"The province
says they are going to spend more on public health, does that
mean our 25 cent dollars will be as high as our 50 cent dollars
were before (the province took on 75 percent of the costs)," he
asked? "It is too soon to tell until we see the specifics of how
they are going to go about it."
That being
said, Mr. Hunt said the general reaction of Northern
municipalities was, "by and large good."
"The North was
certainly mentioned far more than we have been in the past," he
pointed out. "There are certainly a lot of infrastructure
dollars mentioned and that gives us a good feeling about their
intentions."
Business
reaction to the budget was also guardedly positive, with Ontario
Chamber of Commerce President Len Crispino delivering a 'B+'
verdict when he learned that the capital tax on business, a tax
that applies whether or not a corporation makes a profit or not,
will be gradually wiped out over the next eight years.
"We're not
pleased about the fact that it's being done over eight years as
opposed to four," he said. "Nor is the group happy that it will
take four years to eliminate the deficit."
But overall,
business reaction has been more positive than negative.
Although the
budget will technically remain in deficit until 2007, a $1.5
billion contingency fund could mean the budget is balanced much
sooner.
The budget
contains a number of initiatives that target the North
specifically.
On the plus
side the Northern Ontario Heritage Fund is getting an additional
boost of $35 million. Bringing the Northern development fund up
to a total of $135 million. Perhaps even more telling, Muskoka
is not in the plan anymore.
"We are
welcoming Muskoka back to southern Ontario," quipped Mr. Brown.
The inclusion of the southern
Ontario
cottage country resort area within the cachement area of
Northern Ontario
was a deep sore point for many Northerners. The realignment of
the boundaries of Northern Ontario are now back to their
original borders.
Although
government spending on roads will be down overall, there will be
$285 million earmarked specifically for
Northern Ontario.
Most of the money will be spent on widening Highway 69 and
Highway 11. Although there are no specifics as to how many miles
of road will be widened with the new funds, the allocation is
widely seen as a payoff to the North for its support.
Another
initiative specifically targeting the North are Northern Ontario
Grow Bonds. Although the specifics on the new bond program
haven't come out, the intent is to encourage private investment
in the North.
"When business
comes to the North," said Mr. Brown, "the government will back
them up. The Go North Investor Program, with $10 million in
marketing investment, will go hand in hand with those bonds."
The Go North
Investor Program will target business entrepreneurs nationally
and internationally, highlighting the inherent strengths of the
North as a place to do business, explained Mr. Brown.
Rural and
Northern
Colleges
are also getting a one-time boost, with a stabilization fund
geared to helping rural and Northern Colleges.
On the
downside for the North, the Ministry of Northern Development and
Mines will see a $6 million drop in their budget this year, but
Mr. Brown was quick to point out that drop is more than offset
by contributions to the North that are being made in other
areas.
"By
contributing into the other programs, that will certainly more
than make up for the slight drop in that ministry," he said.
"There were a great number of government ministries that will
have to tighten their belts so we can concentrate on the areas
that are of the most importance to the people of Ontario."
Although the
Native Affairs Secretariat budget was also down by $2 million,
Mr. Brown pointed out that there was an extra allocation outside
of that envelope specifically targeting Aboriginal health and
wellness, topping that fund up by $5 million.
"There have
also been increases to spending on mental health, especially to
children's mental health, that will be of great importance to
Northerners," he said. "There is also going to be greater a
emphasis on having the family health teams, with the main focus
in areas where there are doctor shortages. That is where the
'waits' are."
In agriculture
policy, and as part of a concentration on clean water, farmers
are getting a new $20 million aid package for nutrient
management, although most of the benefit of that will impact on
larger farm operations, identified as those with the manure
output equivalent to 300 cows.
In fact water
is the single biggest fixation for the government in this
budget, if percentage increases are any measure. The budget will
pour another $50 million into outlays designed to protect the
province's water supply, jumping that funding envelope by a
whopping 50 percent, far and beyond any other envelope.
The new money
will hire more inspectors, better research on water drinking
standards and expanded oversight of water-using activities. The
province has also committed itself to improving sewage-treatment
plants, parkland acquisitions and the cleanup of abandoned mines
and improving conservation area dams.
While water
may be the fixation by percentage increase, health remains its
largest outlay by far, consuming 38 percent of provincial
spending.
A commitment
to multi-year funding for hospitals from the province, something
that hospitals have been calling for as vital to their
operations, will have its impact severely dampened by the low
increases called for in the funding.
"According to
the budget, there will be 4.3 percent in the first year,
dropping to 3.1 in the next two years," said Manitoulin Health
Centre CEO Jim Van Camp. "That is less than half of what we see
in our budget, which has a 10 percent increase."
The provincial
average is eight percent, noted Mr. Van Camp, Manitoulin's
stands at 10 percent because its two-site nature is not
recognized.
"It is
erroneously low," he said. "We provide only essential services,
therefore 4.3 percent is not going to cut it. I will be
recommending to the board that we stay the course."
Manitoulin
Island's average income of approximately $16,500 per year falls
well below the $20,000 trigger point for health premium
payments, and with nearly 22 percent of the population dependent
on government transfers of one kind or another, the increase of
three percent to social service and disability transfers, the
first increase in 11 years, will likely give local consumers a
bit of a much needed boost. That boost however falls far short
of what social service advocates say are needed.
For one local
business person however, cuts of chiropractic and outpatient
physiotherapy from OHIP listed treatments will be having a
serious negative effect.
Harold Simon,
a Mindemoya chiropractor was clearly unsettled by the
announcement.
"It was
particularly upsetting because there was no notice. It came
right out of the blue," he said. "There was no consultation of
our association, to my knowledge."
Mr. Simon said
the de-listing would provide false savings, as those who would
normally seek treatment would fall onto the emergency system.
Although there
was little warning for chiropractors or their patients, it is
important to note that the de-listing does not take effect until
the fall.
"When in the
fall we don't exactly know," said Mr. Simon.
Uncertainty as
to how the budget will actually impact various sectors lies
largely in the details, and most of those details have yet to be
announced, leaving most of the players cautious in their
reactions. That is an uncertainty that Mr. Brown said will be
quickly cleared up.
The provincial
budget, or rather the voters reaction to it, is expected to have
an impact on the federal election. Ontario's ridings will play a
pivotal role in the battle for who will form the federal
government, and it remains to be seen if voters will accept the
provincial budget's new taxes (and deficit) or if a backlash is
waiting for the federal troops. |