Ontario Premier Dalton McGuinty went on the road yesterday to sell the tax reforms at the centre of his government's budget amid growing criticism over higher prices the measures will inflict on consumers.
Mr. McGuinty said his government has to do whatever it takes to get the province through its biggest economic crisis in 80 years, including tax changes that make some people unhappy.
"These measures aren't the easy thing to do," he said in a luncheon address to the Toronto Board of Trade. "They're not the politically safe thing to do. But they are, undoubtedly, the right thing to do."
Mr. McGuinty delivered much the same speech to the Owen Sound Chamber of Commerce last night after a week of opposition attacks over his government's plans to blend the provincial sales tax with the federal goods and services tax and create a single, 13 per cent value-added tax.
Tax harmonization will leave consumers paying higher prices on many everyday goods and services, ranging from haircuts to Internet fees. Mr. McGuinty said the budget is aimed at making Ontario more competitive and more compassionate by offering tax relief for businesses and low-income families.
While harmonization does not take effect until next year, it appears poised to figure prominently in the Ontario Progressive Conservative leadership race.
Tory MPP Tim Hudak, who formally launched his leadership bid yesterday, said the Tory caucus opposes Mr. McGuinty's "tax grab" because it increases costs for middle-class families.
"We are going to fight this increase in taxes tooth and nail," he said yesterday at a news conference, where he was joined by a dozen supporters from the party's 24-member caucus.
Mr. Hudak, 41, said he would lead a party that reflects the values of middle-class Ontarians, including respect for the rule of law and reward for hard work and ingenuity. He was first elected as an MPP in the 1995 sweep that ushered in the Conservatives under premier Mike Harris.
Many veterans of that era hope he can steer the party back to its small-c conservative policies.
By contrast, former leader John Tory was more of a moderate in the mould of his mentor, former premier Bill Davis. Mr. Tory resigned last month after losing a by-election.
"I think we ought to move beyond the red Tory versus blue Tory debate," Mr. Hudak said. "This is going to be about new ideas for moving our province forward, versus Dalton McGuinty's outdated tax-and-spend policies."
David Docherty, a professor of political science at Wilfrid Laurier University, said provincial politics would become more divisive if the Tories were led by a neo-conservative. The Liberals would be tempted to exploit the "vitriol" that marked the Harris years for their own political gain, and the "more rancorous" elements in the Tory caucus could resurface, Prof. Docherty said. Mr. Hudak is competing against three caucus colleagues: Christine Elliott, 53, who is scheduled to launch her campaign today; Frank Klees, 58; and Randy Hillier, 50. The party will choose a new leader on June 27.
As the party's finance critic, Mr. Hudak is well positioned to tackle the economy, the single biggest issue confronting the province, and keep tax harmonization in the news.
Mr. McGuinty said yesterday he could not extend exemptions from the new tax to additional products because it would deprive his government of tax revenue and force him to cut funding for social programs.
"If there was an easy way forward and I could do something that didn't affect a single Ontarian, it didn't interfere with their daily living, it didn't introduce them to disruptive change, we would have done it," he told reporters.
Karen Howlett