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The new Liberal government in Ontario has been getting a lot of flak for the promises it has broken. Now, it's in trouble for keeping one.

The government is pressing ahead with its campaign commitment to scrap the private-school tax credit. The move is no surprise to critics who accept that the Liberals have a mandate to change the policy introduced by the former Progressive Conservative government in 2001.

But critics are astounded that Finance Minister Greg Sorbara has made the measure to scrap the credit on tuition fees retroactive to last Jan. 1, nearly 10 months before the Liberals came into office. They say -- and they're backed by tax experts -- that it's virtually without precedent to backdate a tax measure and that it affects decisions on schooling that parents made at least a year before the election.

"This is like a bully punch in the stomach," said Bernie Farber, Ontario director of the Canadian Jewish Congress.

Mr. Farber was one of a number of people who complained this week to a Liberal-dominated committee that clawing back the tax credit retroactively without signalling that before election day breaks the faith with voters. Muhammad Khalid, executive director in Canada of the Islamic Society of North America, shares that view. "This is going to create mistrust of governments," he said.

The Conservative measure would have given parents of children in private schools reimbursement of 50 per cent of tuition when fully implemented. The schedule for 2003 provided for claims of up to 20 per cent of tuition. The Finance Ministry estimates that about $150-million is at stake, while some critics put the figure as low as $30-million. Whatever the number, most of it is sucked up by parents who send their children to non-religious schools, not by those who use religion-based institutions where tuitions are generally much lower.

The Liberals were very clear about their intent to scrap the credit, but they were vague about when they would do it.

Full disclosure requires me to say that one of my sons attends a private high school and that I will be affected by Mr. Sorbara's action. But I have also written that the Tory "equity in education" credit was bad public policy because it did little for "equity" and deprived a public system already on its heels.

The credit is no longer the issue, however, because the Liberals vowed they would change the policy if they were elected. What's at stake now is whether Mr. Sorbara has the right to reach back and change the policies of a previous government.

The Finance Minister disagrees that he is acting retroactively. "I don't want to quibble about terms, but I would describe it as retrospective," he said. It was a "tough decision," he added, to scrap the credit for all of 2003 rather than from the time of the election. But New Democrat Michael Prue, who also opposes the tax credit, said, "It's totally a cash grab."

Mr. Prue and the Conservative members on the committee examining a government finance bill have formed an unlikely alliance. The New Democrat describes retroactivity on tax measures as "inherently wrong" while Tory MPP John O'Toole calls it a "very, very dangerous precedent."

It's doubtful there will be any immediate political consequences for the government, but its action has likely set the stage for a more robust fight about funding of religion-based schools. Ontario is alone among the provinces in giving aid to Roman Catholic schools while denying funding for other religious schools. Human Rights Commissioner Keith Norton was reported recently as saying this is discriminatory and Mr. Farber said his group is considering a formal complaint on the matter.

This is an old story. The decision by Bill Davis to extend financing for Catholic schools contributed to the Conservative defeat in 1985. In 1996, the Supreme Court of Canada upheld Ontario's practice but said there was nothing to prevent the province from extending funding to other religious schools. This is backed by at least one prominent Liberal -- Attorney-General Michael Bryant. "We must find a way to do it," he said last spring.

mcampbell@globeandmail.ca

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