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$2.4 billion is equal to more than $500 from
every Ontario household
On July 1, Ontario Premier Dalton McGuinty
brought in the first of four big cuts to the
Corporate Income Tax rate. Before long,
these cuts will drain the provincial
treasury of $2.4 billion a year.
It’s a huge sum of money. It’s money that
won’t be available for health care. Or
childcare. Or colleges and universities. Or
roads and transit. Or even to pay down the
deficit. The question is, are tax breaks for
companies like the Royal Bank of Canada,
Rogers, and Imperial Oil really the best way
to spend $2.4 billion?
Corporate tax cuts won’t
create jobs
Corporate tax cuts boost profits, but do
they create investment? Not in Ontario.
After 10 years of corporate tax cuts here,
the rate of investment has actually gone
down.
Our corporate taxes are low already. A 2010
study by the KPMG consulting firm shows that
Ontario has much lower business taxes than
the United States or our other key
competitors. And, KPMG says, taxes only
account for up to 14 per cent of investment
location decisions. That means things like
an educated workforce and public healthcare
play a key role in bringing jobs to Ontario.
In its 2010 budget, the government of Canada
said that every dollar spent in corporate
income tax cuts would grow the economy by 30
cents. In contrast, every dollar spent on
“other spending measures” (public services)
would boost the economy by $1.40.
In other words, the best investment for
Ontario right now is the jobs and services
that will make our province stronger – today
and in the future.
It’s time corporations
paid their share
The people of Ontario don’t support
corporate tax cuts. Not now. In an August
poll of 1,000 Ontarians by the Angus Reid
polling company, 75 per cent said the
McGuinty government should cancel the
corporate tax cuts.
At the federal level, Liberal leader Michael
Ignatieff has vowed to cancel Stephen
Harper’s corporate tax cuts. Premier
McGuinty should cancel his own.
Ontario’s Liberal government needs to focus
now on the real needs of real people. It
needs to build our economy and other public
services from the bottom up. Inflating the
bonuses of CEOs through more tax breaks
won’t do it.
It’s time to get back on track. It’s time to
invest in Ontario. It’s time to cancel the
corporate tax cuts. |
