As reported in today’s National Post the rhetoric leading up to the comining federal election is beginning to heat up in Ontario.
So what’s going on, beyond a heated exchange between two men with a history who clearly don’t like each other? (The two men routinely traded barbs when Mr. Flaherty was at Queen’s Park; Mr. McGuinty once accused the former Ontario finance minister of racism over comments he made about aboriginal Canadians).
The obvious catalyst is that Ontario voters are angry about recent job losses in the manufacturing sector and are blaming the federal government. “They’re getting blamed and are looking to deflect the blame by saying that Ontario is turning into a rustbelt and it’s McGuinty’s fault,” one source at Queen’s Park said.
There may be some truth to this but Mr. McGuinty can hardly be absolved when it comes to the blame game. One of his beefs with Ottawa is that the federal government is not funding his Move Ontario plan for the Greater Toronto Area transit fund or helping with the Windsor-Detroit border crossing. “No, I’ve had no real expression of interest,” he told the Toronto Star. Which is true, if you don’t count the $1-billion the feds have committed for the York-Spadina subway. Or the $385-million for GO Transit. Or the $2.1-billion earmarked for the Ontario-Quebec trade corridor that includes the Windsor crossing.
So despite the $3.5 Billion federal commitment, Dalton McGuinty will claim that Ontario has “had no real expression of interest” from Ottawa.
And what would McGuinty like to see? Based on his liberal use of the terms “partner” and “investment” it sounds like McGuinty is suggesting the Government start buying into the failing corporations.
“They’re struggling today and they need a partner, somebody who is going to help them make investments today so they are stronger tomorrow,” he said. “Corporate income tax cuts don’t help a business that is struggling.”
In short the Ontario Liberals, along with their Federal counterparts are calling for direct government handouts to corporations that are struggling to compete and profit in their particular markets. The NDP like to call this type of spending “corporate welfare”, and like most other government handout programs these policies tend to discourage innovation and change and create a long-term dependency on bail-outs. They also tend to mess with the natural competitive balance in our markets and create an unfair trading situation. They are also incredibly expensive – an expense that is passed on to us taxpayers.
And this really does point to the ideological differences between the Liberals and the Conservatives. The Liberals feel the role of government is to intervene in the lives of individuals and the management of corporations – they feel they are better able manage our money and our resources. The Conservatives on the other hand, believe that individuals and corporations should be given a little bit more credit for their ability to manage their own affairs. Competition is healthy and self-reliance should be encouraged.
What do the economists think?
Doug Porter, deputy chief economist at BMO Capital Markets, says, nine out of 10 economists would side with Mr. Flaherty and advocate creating as favourable an economic environment as possible and then allowing the market to pick the winners and losers.
