Progressive Conservative Leader Tim Hudak is pledging to pass legislation capping government spending increases at the same rate as GDP growth to ensure Ontario never again runs a budget deficit. And he detailed Wednesday how he would make a string of cuts – axing everything from tuition rebates for university students to tax credits for senior citizens – to balance the books in two years.
The moves solidify Mr. Hudak’s position as one of the nation’s most hawkish fiscal conservatives, diametrically opposed to the stimulus-spending policies of Liberal Leader Kathleen Wynne.
“We need to do this,” Mr. Hudak told a mostly Tory audience as he launched his platform at a downtown Toronto hotel. “We need to have something in place to ensure that government stays at an affordable level. We have to have those restrictions on government so we don’t get into a deeper mess down the road.”
Mr. Hudak is banking his tough talk will motivate his base and cast him as the one person honest enough to tell voters exactly what it will take to wash away the province’s red ink. Ms. Wynne is promising to balance the books in three years, but her plan depends in large part on economic growth; NDP Leader Andrea Horwath, meanwhile, has released virtually no plan at all.
But Mr. Hudak’s bold ideas carry significant risks. They put him far outside the mainstream – even Conservative Prime Minister Stephen Harper racked up a deficit to help dig the country out of the recession – and add fuel to his opponents’ accusations he would throttle growth by taking money out of an already shaky economy.
“There is a clearer and clearer choice between the plan we are putting forward and the set of dangerous ideas that Tim Hudak is putting forward that will push us back into recession,” Ms. Wynne said Wednesday in the university town of Guelph.
Ms. Horwath, who promised Wednesday to appoint a new cabinet minister tasked solely with finding budget savings, called Mr. Hudak’s plan “divisive” and said it would harm seniors and students.
Mr. Hudak, however, contends his proposed corporate tax reduction, which would bring the rate from 11.5 to 8 per cent, will more than offset the effects of his budget cuts by attracting new investment.
He also pointed out that some of his proposed cost savings were taken straight from the Don Drummond report, commissioned by Dalton McGuinty, Ms. Wynne’s Liberal predecessor. Among other measures, Mr. Drummond recommended doing away with the 30-per-cent tuition rebate and freezing the Ontario Child Benefit, which Ms. Wynne is instead planning to increase.
“Some of these choices were easy. Most of them were pretty hard,” Mr. Hudak said. “But we’re in a world of limited options.”
Economist Donald Savoie said the Tory Leader’s pledge to never run a deficit, no matter what the economic circumstances, is “not wise.”
“Even the most free market advocate would be very hesitant to commit to no deficit financing,” said Dr. Savoie, a public policy expert at the University of Moncton.
Mr. Hudak’s rationale for stimulating the economy with tax cuts while slashing government spending does have some historic precedent, he said, pointing to Margaret Thatcher’s economic policies of the 1980s. But he cautioned that she paid for those tax cuts by running deficits.
“To think that you’re going to cut spending, lower taxes and the deficit will whistle away – I think there’s enough evidence that’s a pretty risky prescription,” he said.
Mr. Hudak’s platform also provides a blueprint for nearly every policy area, including allowing pension plans to invest in government enterprises; getting universities to focus on more practical programs tailored to the needs of the job market; and putting more emphasis on math teaching in grade school.
With a report from Kaleigh Rogers