An interventionist and protectionist NDP holding the balance of power in Ontario would be a disastrous election result. Behind Andrea Horwath's pleasant, amiable personality are policies that would send Ontario into a tailspin, undoing years of progress toward interprovincial free trade and violating international trade agreements.
Her rise in the polls is not surprising. With a policy wonk seeking a third term in office and his main opponent somewhat sound-byte-prone, there's something of a charisma deficit at Queen's Park. Ms. Horwath has benefited from some of the emotion Ontarians feel toward Jack Layton, and has exuded more warmth on the campaign trail.
But her platform has so far escaped scrutiny. So let's look under the hood.
It is protectionism run amok. The NDP would set the price of gasoline. They would force local preferences for government procurement with a “Buy Ontario” policy. The mining industry would have to operate at their behest, with the forced processing in Ontario of all resources mined in Ontario. The NDP would oppose “foreign takeovers of our key industries.” In an editorial board meeting, Ms. Horwath did not rule out nationalization of the auto insurance industry.
Any of these would cost the Ontario economy and public finances millions and trigger immediate trade complaints. Taken together, they constitute a stark, clear declaration – Ontario would be closed for business.
But there's more. A government-appointed Jobs Commissioner would somehow prevail over economic circumstance when there are layoffs, leading “serious negotiations and brainstorming over everything from how to protect jobs, to retraining opportunities, to finding potential new managers or owners.” The party would give a defined benefit pension to anyone who wants one. Any business that hired a worker would get a tax-credit, with no cap on the total amount the NDP would pay out. A new Ontario Housing benefit would increase the disincentives to work for those on welfare.
How can we afford this manna? The NDP say they will bring in from $1.4- to $1.8-billion in new revenues by raising corporate income taxes to 14 per cent from 11.5 per cent. It's a fantasy. Corporate income tax revenues are far more responsive to the health of the economy than the actual tax rate. We do know, however, that corporate tax rate increases are correlated with less investment, with a chillier business climate.
This is not the moderate NDP of the Manitoba or Nova Scotia governments, or even the relative prudence shown in the later years of Bob Rae's premiership. It is a radical platform that would move Ontario toward a command economy. A majority Liberal or PC government could disregard these ideas. In a minority scenario, with an economy imperilled, neither party should yield or defer to the dangerous provincialism of the New Democrats.
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