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Ontario Finance Minister Charles Sousa is shown in Toronto on Nov. 12, 2013. (FRED LUM/THE GLOBE AND MAIL)
Ontario Finance Minister Charles Sousa is shown in Toronto on Nov. 12, 2013. (FRED LUM/THE GLOBE AND MAIL)

Ontario still mulling over its options to pay for transit investments Add to ...

Ontario is leaving the door open to tax hikes for wealthy people and corporations as it wrestles with a $12-billion deficit and tries to find a way to pay for badly needed subways and light-rail lines.

“We are going to do a very progressive system that meets the needs of all concerned,” Finance Minister Charles Sousa said Wednesday in his strongest hint yet at what will be in the upcoming budget. “We’re going to ensure innovative ways to make those investments. More importantly, though, we have to have sustainable supports for those investments going forward.”

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The governing Liberals have ruled out raising income taxes for middle-income earners, the HST or the gas tax.

But raising taxes on higher-income Ontarians is still on the table. And late last year, an expert panel looking for ways to fund public transit expansion recommended adding half a percentage point to corporate taxes.

“We’re going to ensure that the people of Ontario are going to have greater tools and opportunities to go forward,” Mr. Sousa said.

Whatever Mr. Sousa proposes will need to win the support of the third-party NDP. With the Liberals holding only a minority of seats, they must secure the backing of at least one other party to pass a budget and avoid a snap election. The Progressive Conservatives are eager to go to the polls, leaving the New Democrats as the Grits’ only option.

But NDP Leader Andrea Horwath would not say Wednesday if she would support a tax hike on people making more than $150,000. She said she will not take a position on the matter until there is an election.

“You’ll see a position from us when there happens to be an election campaign,” she said.

She said she is against tax hikes on the “middle class,” but refused to say how rich someone would have to be to be considered beyond the middle-income bracket.

Earlier this week, she suggested anyone who patronizes local businesses, eats at restaurants or attends movies with their children qualifies as “middle class” in her view.

“Those are the folks that go to their local main streets and visit local businesses. Those are the folks that go to restaurants and entertainment venues. They take their kids to movies,” she said when asked to define the term. “They generate activity in our local economy.”

The Tories, meanwhile, slammed the Liberals for considering any tax increase at all.

“Frankly, no one believes them any more – we have a jobs crisis in Ontario,” PC finance critic Vic Fedeli said.

The Liberals are trying to balance the books by 2017-18, but have said they do not want to cut much more spending to get there.

They have also pledged to put a dedicated revenue stream to build new public transit – including subways, LRTs and commuter trains – in the budget.

Follow on Twitter: @adrianmorrow

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