GOLDSTEIN: High taxes in Ontario hurting provincial, federal economies, says report
Breadcrumb Trail Links Opinion Column Former Ontario Premier Dalton McGuinty. Photo by ASHLEY FRASER /POSTMEDIA NETWORK Content of article
High income and corporate tax rates in Ontario are hurting the provincial and Canadian economies, according to a new Fraser Institute study released Thursday.
advertising 2
This ad has not yet loaded, but your article continues below.
content of the article
The fiscally conservative think tank says Ontario has the third-highest combined federal/provincial and federal/state income tax (PIT) rate in Canada and the US due to federal and provincial tax increases over the past decade
According to the study, Ontario’s top marginal tax rate is higher than the nearby American states with which Ontario competes for trade and investment, and is the third highest in Canada, just behind Newfoundland and Labrador and Nova Scotia.
“High marginal personal income tax rates weaken the incentives for individuals to work, save and invest, so this development has a negative impact on Ontario’s long-term economic growth prospects,” said Ben Eisen, co-author of the report Broken Promises: The Surviving increased income and corporate taxes in Ontario.”
advertising 3
This ad has not yet loaded, but your article continues below.
content of the article
Since Ontario accounts for 38% of Canada’s economy and nearly 40% of its population, any economic damage caused to Ontario by exorbitantly high taxes will negatively impact the entire country.
The study places the lion’s share of blame for Ontario’s uncompetitive PIT marginal rates on the Liberal Trudeau government in Ottawa and the Liberal Ontario governments of Dalton McGuinty and Kathleen Wynne from 2003 to 2018.
We apologize, but this video could not be loaded.
play video
However, Doug Ford’s progressive-conservative government, which has been in power since 2018, has also come under criticism.
Since 2012, the Fraser Institute study found Ontario’s PIT marginal rates have increased 7.12 percentage points, from 46.41% to 53.53%.
The study says the Trudeau administration is responsible for four percentage points of that increase, while Ontario’s previous Liberal McGuinty/Wynne administrations from 2003-18 accounted for the remaining 3.12 percentage points.
advertising 4
This ad has not yet loaded, but your article continues below.
content of the article
“Despite repeated promises not to increase taxes, the government of Dalton McGuinty (2003-13) enacted provincial tax increases that raised the highest provincial PIT. Premier McGuinty also promised that the increase would be temporary and would be reversed later, but neither he nor his successor, Premier Wynne (2013-18), lived up to that promise.
McGuinty’s most notorious example of not delivering on a no-tax pledge occurred in the 2003 Ontario election, which put him and the Liberals in power when he repeatedly pledged no taxes and even a so-called Taxpayer Protection Pledge signed not to do so.
We apologize, but this video could not be loaded.
play video
After that election, he imposed the largest single provincial tax hike in Ontario history — up to $900 a year, ostensibly for health care — which Ontario taxpayers pay to this day.
advertising 5
This ad has not yet loaded, but your article continues below.
content of the article
The Fraser Institute report also notes that the current Ford Progressive Conservative government “criticized its predecessors for maintaining an uncompetitively high PIT rate in Ontario while in opposition, but also failed to take action to lower the rate”.
Likewise, the Ford administration has failed to deliver on its 2018 campaign promise to cut Ontario’s corporate tax rate by one percentage point, from 11.5% to 10.5%.
This comes after the previous Liberal Wynne/McGuinty governments broke their promise to cut Ontario’s corporate tax rate from 14% in 2009 to 10% in 2013.
Instead, they froze the corporate tax rate at 11.5% before losing power to Ford and the Progressive Conservatives in 2018.
The crux of the story of Ontario income and corporate tax rates is broken promises: “Governments keep promising to significantly reduce taxes for Ontario residents, but their words have not been followed by action,” Eisen said.
SIMS: Albertans save big on Christmas shopping without PST TERRAZZANO: Trudeau pounces on alcohol tax increases in 2023 GUNTER: Trudeau’s tax increases are imminent Share this article on your social network Ad 1
This ad has not yet loaded, but your article continues below.
Remarks
Postmedia strives to maintain a vibrant but civilized forum for discussion and encourages all readers to share their views on our articles. Comments may take up to an hour to be moderated before they appear on the site. We ask that you keep your comments relevant and respectful. We’ve turned on email notifications – you’ll now receive an email when you get a reply to your comment, there’s an update on a comment thread you follow, or when a user you follow comments follows. For more information and details on how to customize your email settings, see our Community Guidelines.
