General trend of 2017 budget is to raise taxes and cut services

S-D-SG MPP Jim McDonell. Nation Valley News file photo

This Week at Queen’s Park (May 5)

by MPP Jim McDonell

Following the excitement of the Budget presentation, this week the Legislature settled back into a working rhythm.

The government cut short the debate on its flagship housing legislation on Monday, after only a few hours of debate. Bill 124, the Rental Fairness Act, extends rent control to all units, creates a mandatory standardized lease contract, reduces landlords’ ability to return the unit to their personal or family use, and prevents rent increases based on rising utility costs. Except for the standardized lease, these new rules will only make a bad situation worse. Decades of study have shown that rent control leads to a deterioration of the housing stock and a reduction in rental unit supply.

Mobility is also affected as residents with improving incomes have an incentive to remain in cheaper units rather than move and pay more, leaving fewer affordable places for newer arrivals to the area. The government is also excluding utility costs, including Ontario’s out of control hydro rates, from the rent calculations, which will only serve to force more landlords out of the rental business. This Bill creates many more problems than it solves. The PC Caucus, instead, focused on boosting supply bycutting developers’ red tape, freeing up government-owned land and buildings, and tackling property speculation. These proposals were ignored.

Not surprisingly, despite heralding a long awaited balanced budget, we see anything but, as documents show a $10 billion increase in the provincial debt. In addition, there is $5 billion hole in the budget, plugged by one-time asset sales, like Hydro One, unusual revenue, like cap-and- trade, and pension plans. All this to say that they have not structurally changed anything, and since you can’t sell your resources twice, next year becomes much harder.

In addition, many of the big ticket items have been dropped or have little impact on this year’s numbers. We no longer see the $1 billion investment in the Ring of Fire, Ontario’s huge mineral project, or the electricity relief plan estimated at $1.5 billion in additional interest per year, and the new pharma-care plan only starts next January. The government also dropped the standard practice of projecting cash flows for the upcoming two years, making it impossible to judge the true cost of the many new programs they announced with future spending commitments.

All in all, life continues to get much more expensive under this government, as they refuse to make any solid reforms. For example, the day after they announced a new plan to cut hydro rates through a massive re-financing program and transferring costs to the general taxpayer, they released over 1,100 new renewable energy contracts for power we don’t need. We could shut down all the wind and solar power projects today and still have a surplus of energy. The general trend of the budget is to raise taxes and cut services. We don’t believe this government is on the right track and can’t support their budget.

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