Get Ready for a War
Monday, February 25th, 2008
By Inya Ivkovic, MA for Profit Confidential
No, I didn’t lose all my marbles, I did say “war,” only I wasn’t thinking of the one fought in a real battlefield, but within the economic realm of a once prosperous Canadian province — Ontario.
Last week, Ontario’s Liberal Premier McGuinty threw down the gauntlet, first by accusing federal Conservative Finance Minister Jim Flaherty of losing sight of the big picture and focusing too much on the economies of Western Canadian provinces, generously throwing them corporate tax breaks as if the days of that side of the country struggling economically had not ceased to exist long ago.
Naturally, Flaherty couldn’t stand idly by. He then accused Ontario’s Liberals of not knowing when and who to subsidize and at whose expense. And apparently, Ontario’s Minister for Economic Development, Sandra Pupatello, then responded, “…and if [Mr. Flaherty] wants war, he’s going to get one!” After words such as these, an Ontarian like me cannot but wonder, “Who are these people?”
This is where we are right now: By cutting Canada’s goods and services tax (GST) by one percent in 2008 and onward, Flaherty effectively shot himself in the foot, and the federal coffers, too. Now he is struggling to find the money to fund new research and development, as well as new capital investments in equipment and heavy machinery.
On the other hand, McGuinty has made his fair share of miscalculations. It seemed easy to balance a budget when the economy was growing and energy prices were declining. Last spring, Ontario’s budget was balanced and the province’s reserve fund was flush with tax revenue.
This spring, however, Ontario’s fierce leader will have exhausted the reserve fund just to keep the province’s head above water, somehow managing to disregard the zero growth expectations for Ontario for the first two quarters of 2008 completely. Still, such a bleak forecast didn’t stop McGuinty from picking which individual Ontario firm should be put on the provincial subsidy.
Such bickering and power-tripping is at the very least degrading. And if it progresses much further, it will only hurt the people who elected them in the first place. It just goes to show that politics and the economy must be considered in unison when election times roll around, never forgetting how each of the officials scored their points before and after voting polls had closed. In other words, voters where democracy is the preferred way should wear both their “investor” and “voter” hats during elections.
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