Rapid Policy Update
Ontario PC Party Platform 2018June 1, 2018
On May 30, 2018, Progressive Conservative Party of Ontario leader Doug Ford announced his party’s 2018 election platform, Plan for the People. Below is a high-level synopsis of the major policy initiatives most relevant to Ontario business.
Key Areas at a Glance
- Jobs and Economic Growth: Cut regulations and reduce business tax rates.
- Energy and Electricity: Lower electricity prices and scrap the Green Energy Act.
- Government Accountability: Audit government spending and plan for a balanced budget.
- Health Care: Invest in mental health, dental care for seniors, and beds in both hospitals and long-term care facilities.
- Transportation and Infrastructure: Implement substantial spending on transportation infrastructure, including subways, GO service, and highways.
- Housing: Preserve rent control for existing tenants and increase the supply of affordable housing in the GTA.
- Environment: End the cap and trade system and challenge any attempt by the federal government to impose a carbon tax.
Jobs and Economic Growth
The PC platform promises to support business by cutting regulations that hamper job creation and economic growth. They intend to reduce the Small Business Tax rate by 8.7 percent, lower the Corporate Income Tax to 10.5 percent (from 11.5 percent), and similarly reduce the manufacturing and processing rate. The platform estimates that reducing the small business tax will cost $60 million per year starting in year two, while reducing the other business taxes will cost $1.3 billion starting in year two.
They also pledge to:
- Cancel the Jobs and Prosperity Fund (estimated savings of $270 million per year).
- Maintain the current level of Regional Economic Development Funds funding.
- Improve access to apprenticeships and reform the foreign credential recognition process.
- Introduce a minimum-wage tax credit so individuals earning the minimum wage pay no tax, at an estimated cost of $558 million per year.
- Increase the agriculture sector Risk Management Program cap by $50 million annually, starting in year three.
The OCC welcomes the PC plan to cut business taxes, which we had asked for as part of our Bill 148 offset advocacy and in our Vote Prosperity platform. Similarly, cutting red tape and modernizing regulation is critically necessary to supporting business and encouraging economic growth.
Improving Ontario’s apprenticeship system is a top priority for many sectors across the province; we outline how the government can best accomplish this in Talent in Transition: Addressing the Skills Mismatch in Ontario. Similarly, making it easier for employers to hire immigrants is necessary in order to solve Ontario’s skills mismatch, which we detail in Passport to Prosperity: Ontario’s Priorities for Immigration Reform.
Energy and Electricity
The PC Party intends to lower electricity prices through a series of measures, including:
- Scrap the Green Energy Act.
- Declare a moratorium on new energy contracts.
- Cut residential, agriculture, and small business electricity rates by 12 percent by:
- Returning Hydro One dividend payments to taxpayers (estimated cost: $300-400 million per year).
- Paying for conservation programs out of general government revenue rather than electricity bills (estimated cost: $433 million per year).
- Cancelling energy contracts that are in the pre-construction phase and re-negotiating other contracts.
- Stabilize industrial hydro rates through a package of reforms.
- Remove the board of Hydro One and its CEO as well as lower salaries at Ontario Power Generation and Hydro One.
The OCC recognizes that fixing Ontario’s energy system will require a variety of complex and long-term solutions. We welcome attempts to lower electricity prices for industry, small business, and farms, but not at the expense of further debt and deficit spending by government. The OCC also believes in respecting existing contracts, and views Hydro One and Ontario Power Generation as important partners in strengthening our energy system. For more information on the OCC’s approach to electricity, see the Vote Prosperity platform and Leading the Charge, our submission to the 2017 Long-Term Energy Plan.
The PC platform emphasizes government accountability and fiscal responsibility, with promises that include:
- Balance the Budget on a “responsible” timeframe.
- Launch an independent commission of inquiry, at the cost of $1 million, with a mandate to examine the deficit. This will include an independent audit of the Province’s finances, to be released publicly.
- Reinstate the Auditor General’s authority to approve government advertising.
- Centralize government purchasing.
- Conduct a value-for-money audit of every government program.
- Prevent government agencies, boards, and commissions from purchasing tickets/tables to political events.
- Institute a single-window access for approvals with a one-year deadline.
The OCC welcomes a return to balanced budgets, ideally beginning in 2018/9, as we emphasize in Vote Prosperity. We also support a strong and independent Auditor General’s office, including efforts to rectify the accounting dispute between that office and the current Budget, as we note here.
The OCC sees value in an audit of government programs in order to measure the return on taxpayer dollars. As part of achieving value for money in government, we would prefer to see procurement modernized via a commissioning approach rather than simply centralizing an existing inefficient system. For more information, see Spend Smarter, Not More: Leveraging the Power of Public Procurement, and Prescription for Partnership: How New Models of Collaboration in Health Care Can Make Outcomes a Priority.
The OCC has long advocated for a one-window, regulatory ‘concierge’ service to assist businesses in understanding, navigating, and achieving compliance with regulatory requirements from all levels of government. Similarly, long approval timelines hinder business growth and investment, so we welcome an approach from government that enables reasonable approval deadlines. For more information, see Obstacles and Opportunities: The Importance of Small Business in Ontario.
The PC Party promises to invest $3.8 billion in mental health and addictions supports over 10 years (a cost which they assume will be shared with the federal government), as well as introduce dental coverage for low-income seniors at an estimated cost of $98 million. They also pledge to build 15,000 long-term care beds over five years and 30,000 hospital beds over 10 years. They calculate that the cost per bed, per year, will be $62,000 (assuming capital costs are amortized over the duration of the bed’s lifetime).
Public health care spending in Ontario is expected to exceed $60 billion next year, comprising approximately 42 percent of the Budget. While continual investment in the system is necessary, the OCC believes that system reform would bring about greater value for money and lead to both savings and improved care. Read Health Transformation: An Action Plan for Ontario to learn how the government can achieve this.
Transportation and Infrastructure
The PC Party platform includes substantial spending on infrastructure, including:
- Two-way, all-day GO service, as well as supporting expansions and new projects across Southern Ontario; the platform states that they will maintain current funding.
- Upload responsibility for subway infrastructure, including the building and maintenance of new and existing subway lines, from the City of Toronto to the Province. The cost is to be amortized over the life of subway projects once operational, plus $160 million per year for existing assets.
- Add $5 billion in new funding to build the Sheppard Loop, the Relief Line, and the Yonge Extension.
- Leave responsibility for day-to-day operations, including labour relations, with the City of Toronto.
- Maintain the arrangement in which the City keeps all revenue generated by the subway system.
- Explore potential for high-speed rail and highway projects, including:
- Six-laning of Highway 401 to the 416 between Toronto and Ottawa, and complete the environmental assessment for the GTA West Corridor, at a total cost of $20 million.
- Four-lane Highway 17 in eastern Ontario and Highway 3 in Southwestern Ontario, at a cost of $5 million per year over 50 years.
- Expand natural gas distribution to rural communities with private sector help
- Invest the assumed $100 million in savings in cellular and broadband infrastructure expansion.
- Cut the aviation fuel tax for the North, at a cost of $11 million per year.
- Reinstate passenger rail service to the North, at a cost of $45 million for refurbishment and operating costs.
The OCC would like to see effective governance for public transit and believes that the way to achieve this is through a single transportation authority. A long-term solution would ensure that transit investments are targeted based on sound criteria, including return on investment and evidence that the transportation investment will reduce or eliminate existing barriers to service.
The OCC welcomes the completion of an environmental assessment for the GTA West Corridor as well as any further momentum on this project.
The OCC also welcomes further investment to enable more communities to access natural gas, particularly with the private sector as a partner. We support the use of any savings from this approach being applied to cellular and broadband infrastructure projects, although expanding high-speed internet access across Ontario will require a greater investment than $100 million.
The OCC supports a reduction in the aviation fuel tax to, at the very least, align with other jurisdictions within Canada. The OCC would expect the provincial government to work with the Government of Canada to reduce the aviation fuel tax in Northern Ontario and elsewhere. Reducing this tax would lower barriers to accessing many of Ontario’s attractions, particularly in northern and rural communities, where other forms of travel may be infeasible to visitors.
The PC Party platform includes a promise to preserve rent control for existing tenants. They also intend to increase the supply of affordable housing in the GTA while protecting the Greenbelt.
The OCC recognizes that much of Ontario’s housing affordability challenges come from a lack of supply, and so we welcome an approach from government that will incentivize development. However, removing market signals from rent pricing is not productive a means of increasing the supply of rental units.
The PC platform includes a promise to end the cap and trade system and challenge any attempt by the federal government to impose a carbon tax, including at the Supreme Court. They estimate that ending cap and trade will cost $1.9 billion per year, which they intend to offset by eliminating the funds collected from previous auctions. As for challenging the federal government, they estimate the cost to be $30 million over the course of their mandate. In order to address climate change, the PC Party pledges to set up a fund to invest in new, emissions-reducing technology in Ontario.
Inclusive of that fund, their platform includes $500 million in spending for environmental initiatives such as:
- Enforce air quality programs and protect waterways.
- Hire more conservation officers to improve enforcement of “major polluters”.
- Commit resources to reduce litter.
They also pledge to move forward with resource revenue sharing for Northern and Indigenous communities, from mining, forestry, and aggregate activity, at an estimated cost of $30 million per year starting in year two.
Regardless of public policy approach chosen, the OCC wants the government to pursue efforts to reduce Ontario’s greenhouse gas emissions in a manner that effectively mitigates risk to business competitiveness. Investment in emissions-reducing technology is part of that approach, as is using cap and trade revenues to support industry as it transitions to a low carbon economy. For more information, see the Vote Prosperity platform.
We welcome momentum on resource revenue sharing agreements for Northern and Indigenous communities, and would like to see greater action on natural resource development projects so that all of Ontario can benefit from the province’s natural wealth. Read Digging Deeper: Strengthening Ontario’s Mining Advantage for details.
In October, the OCC released Vote Prosperity, a platform for the 2018 provincial election campaign on June 7. The release of our platform nine months prior to the election was intended to ensure all parties have an opportunity to address the most important issues to business within their own platforms.