Fuschi’s Canadian Forum

Ontario business is suffering from the Stockholm Syndrome. They have been captive, beaten, reviled and squeezed, so often, that the least hint of an end to the punishment  turns them into boisterous supporters of their tormentors. They are overlooking some pertinent details, to their detriment.

I have been a strong advocate of lower taxes on Ontario’s capital investment and specifically corporate taxes. To me it seemed that the Irish model worked so well, while with the ususal Liberal tax and spend there was always a piper to be paid. That time has come in spades, and even the hapless premier has begun to fathom the hopelessness of the position into which he had put Ontario. But what results from this budget is a shell game.

I don’t blame businessmen for cheering at the thought of imminent corporate tax decreases, and the reduction of tax excesses related to a parallel consumption tax system. But when prominent spokesmen and journalists dismiss the plight of the consumer and presume that the outcome will be neutral, they are not using the same math that I am. Stop looking at the tax-free diapers and concentrate on the enormous energy tax grab. 

CTV reports that in 2004 Ontario consumed 15.7 billion litres of gasoline. Let’s optimistically assume that the figure has remained the same. If gasoline is selling at $1.00 a litre (will probably be there by June 2010) the levy on Ontario’s consumer from harmonization will amount to $1.256 billion dollars per year. This is just the increased price of gasoline. We have not even tried to table the damage done by tax increases on natutral gas and electric power.

I sympathize with business which has taken much abuse from this administration, but they are accepting some freedom from their captors, at the expense of further tormenting the consumer. Wrong strategy! The buyer of your products has already drawn his head into his shell, remember. If we bury him, all the corporate tax deductions in the world won’t help you. Characteristically, McGuinty has given with one hand, while taking with the other. This shell game will be the last stake through the heart of the Ontario economy. 

This entry was posted on Friday, March 27th, 2009 at 2:44 pm and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.