New Democrats plan to run deficits for six years

Party expects to save $600 million in its first year by cancelling Ford government’s gas tax cut

Ontario’s New Democrats are pledging to run larger deficits than the Progressive Conservatives and Liberals if elected and would likely not balance the budget for six years, but the party is eyeing some cost savings from cancelling a gas tax cut.

That pledge is expected to save $600 million in the first year by reversing the Progressive Conservative government’s move to reduce the provincial portion of the gas tax by 5.7 cents a litre for six months starting July 1.

Catherine Fife, who has served as the NDP’s finance critic, presented the costing Sunday and acknowledged the high cost of living, including rising gas prices that have topped $2 a litre, but said the temporary cut from the Tories is just a “gimmick.”

“We are looking for a long-term, sustainable strategy to alleviate gas prices, but also to stabilize,” she said, pointing to the party’s promise to regulate gas prices.

“When I’m talking about these things at the door, people say, ‘Well, why isn’t the government addressing the core issue, instead of, you know, $12 a month or covering the cost of half of a gas tank?’ ”

The NDP has suggested the cut might not benefit consumers, but could instead help the oil and gas companies.

Liberal Leader Steven Del Duca said the promise means the NDP “is abandoning the middle class.”

The Liberals have not promised to cancel the planned cut and NDP Leader Andrea Horwath tied them and the Progressive Conservatives together in a tweet suggesting the money is better spent on public services.

“(Progressive Conservative Leader Doug) Ford wants to take $600M from hospitals and schools to line the pockets of his big gas buddies,” she wrote. “Now Del Duca wants in.

I guess they’ve got buddies in common.”

New sources of revenue in the NDP costing include gaining $1.9 billion by year three from raising the capital gains inclusion rate from 50 to 100 per cent on corporations, except for small businesses, and people with a net worth of over $3 million — with a primary residence exemption in place.

They also bank on nearly $600 million by the third year from increasing taxes on people earning more than $220,000 by one percentage point, rising to two percentage points for income above $300,000, and $2.4 billion from increasing the corporate income tax rate from 11.5 per cent to 13 per cent starting in the second year. The small business tax rate would be maintained.

The party would also reallocate billions in contingency funds after the auditor general flagged the PCs’ recent budget as having a higherthan-usual amount.

The largest expenditures in the NDP plan include $8.6 billion by the third year to double welfare and disability support payment rates, a pledge made Saturday following criticism that the initial plan to raise rates by 20 per cent was too low.

A New Democrat government would also send $1.8 billion in revenue from a proposed cap-and-trade system to rural, northern and lowincome families, spend $940 million in year three to enact universal mental health coverage and $834 million by the third year to restore the former Liberal government’s free post-secondary tuition program for lower-income students.

It all adds up to a plan that would see a nearly $21.5-billion deficit the first year — higher than the Progressive Conservative plan of $19.9 billion — followed by a deficit of $18.4 billion in year two and just over $13 billion in the third year.