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Tuesday, March 30, 2010

PC's 10 proposals for 2010

The Progressive Conservative Party of Ontario has decided to release 10 proposals that they hope will give their opposition to the Liberal government focus and form the foundation of the platform in the 2011 election. I’m glad that the PCs are putting out ideas rather than just rhetoric. Political parties should be more than just about opposing each other; they should be vehicles of policy debate. So, in that spirit, I’m going to take a moment and share my opinion on each of these 10 proposals.

1. Suspend tax on new jobs: To encourage businesses to hire new employees, we are calling for a one-year payroll tax holiday – from the burdensome Health Tax and WSIB premiums — on all new hires.

I like the assumption here that lower taxes will mean more jobs; this would be especially true for the sort of taxes they would like to suspend. But I’m not a big fan of tax holidays. A good tax system should be predictable so that people can plan their actions around it. Making tax holidays takes away the predictability and your level of taxation will be in constant flux. Besides if you are willing to concede that these taxes kill jobs than why not get rid of them all together?

2. Eliminate Job Killing Red Tape and Regulations: The growing creep of red tape costs money and kills jobs. A Red Tape Commission should be created to lower the overall regulatory burden and free up entrepreneurs and business leaders to do what they do best: – create jobs.

It is a bit amusing to say that we should create a bureaucracy to get rid of bureaucracy, but that would be an unfair characterization. If the idea is to target the worst most fruitless regulations then this isn’t a bad way to go about it. It is great to see that regulation cutting is still on the political agenda.

3. Make Home Ownership More Affordable: A one year suspension of the land-transfer tax will save Ontario families $3,000, helping them achieve the dream of home ownership and create jobs.

I have the same problem with this as the 1st policy with a bit more added on. This amounts to a subsidy for a particular industry. Changing the tax code to give advantage to one group in society is wrong. Government should not be picking winners or directing the activity of the citizenry. Granted it is not the worst or most heavy handed interference but it still holds the assumption that government knows what is best. If they want to cut everybody’s taxes by $3000 then that would be fantastic, but no they are only cutting the taxes of people who are doing something that the government thinks is good. So this would be the first policy discussed so far that I would actively oppose.

4. Restore Balance to the WSIB System: Increasing costs and red tape from the Workplace Safety are killing jobs in construction and driving up costs to families. Bill 119 makes things even tougher and kills jobs by forcing independent operators and sole proprietors into the WSIB system at a cost of $11,000 per year, requiring coverage for office and secretarial staff that will never set foot on a construction site. Bill should be repealed and small businesses should have permanent representation on the WSIB.

I confess I don’t know enough about the WSIB to comment on if this is a good plan or not. I can say that in principle the idea of cutting regulation is good.

5. Expand Job Opportunities for Young Workers: We can make it more affordable for small businesses to hire new workers and help more talented young men and women enter the trades by modernizing Ontario’s antiquated apprenticeship system including turning Ontario’s outdated 3:1 journeyman-to-apprentice ratio into a 1:1 ratio.

This was one of Randy Hillier’s proposals during the leadership race, and basically I think it is a good idea.

6. Create Jobs in Northern Ontario: Ensure Northern residents have the freedom to pursue resource based job creation by opposing Bill 191, which bars development of half the territory north of the 51st parallel, and empower municipalities and First Nations by providing leaders with a real say on where revenues should be directed.

I don’t know much about Bill 191, the Far North Act, so I won’t comment on if it will bar development or not. I will say that decentralizing decision making is generally a good thing. It could have some odd hick ups if the town council is corrupt or incompetent, but generally speaking local people have the best knowledge of what is good for the local community. I also like the attitude inherent in this policy. It is not about subsidizing life in the north, but empowering them to do it themselves.

7. Cut Wasteful Government: Introduce a mandatory Sunset Review process that forces all ministries, agencies, boards, and commissions to justify their existence and continued value to the public.

This is a great idea. Part of the problem with new spending is that once it is in place it is hard to get rid of. It is what academics refer to as ‘path dependency.’ Once something is institutionalized it is generally self perpetuating, even past the point that it is useful (if it ever was useful). By forcing government organizations to justify their existence, every 5 years or so, you have a built in way that those agencies can be eliminated. Granted the likelihood is that many useless government organs will survive this process, but it gives an opportunity that would not otherwise exist to cut back on government spending.

8. Stop Corporate Welfare: Politicians and bureaucrats should not be in the business of picking winners and losers in the marketplace. Billions of dollars in corporate handouts – including sweetheart deals for Korea based Samsung and a French videogame company – reward companies who hire the best lobbyists. Instead, government should lower the overall tax and regulatory burdens to allow all businesses to succeed on a level playing field.

All music to my ears, though I point out that this is contradicted by the 3rd proposal. But hey if they get rid of most subsidies but then introduce some of their own, there may at least by a net loss in subsidization.

9. Cap Spending: Spending should be capped at the 2010-11 estimate provided in the 2009 budget.

Reasonable enough, governments should at least pretend they are going to stick to their long term plans.

10. Bring Public Sector Agreements in Line with Reality: Public sector collective agreements must reflect the ability of the private sector to pay. A wage freeze should be imposed on senior government administrators, non-unionized employees and MPPs. The Premier should immediately enter into negotiations with the public sector union leadership with the goal of working towards a wage freeze or similar savings through more efficient service delivery until the economy and provincial finances recover.

This is good and reasonable. In a time of bursting deficits the public sector employees shouldn’t be expecting a pay raise. It is the same principle as unions in the private sector that work for a company that is losing money. If the government does not have any more money than how can the workers demand that they be given more money? The government can’t magically make money out of nowhere, which is what public sector unions seem to think.

There is nothing in here that makes me jump up in joy (like a flat tax), and there are a few things that I actively dislike. But the overall direction that these policies want to take Ontario in is a good one.

Posted by Hugh MacIntyre on March 30, 2010 | Permalink

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