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Ontario NDP leader promises cut to HST on gas prices

Andrea Horwath speaks with members of the media after winning the leadership of the Ontario New Democrats in Hamilton, Ontario on Saturday March 7, 2009.

Cathie Coward/The Canadian Press/Cathie Coward/The Canadian Press

Ontario NDP Leader Andrea Horwath is promising relief for drivers at the pumps by slashing in half the provincial portion of the harmonized sales tax on gas prices.

The pledge, unveiled on Friday, is the latest indication that both the New Democrats and the Progressive Conservatives plan to run populist campaigns focusing on pocketbook issues for the Oct. 6 provincial election.

"People's worries about everyday life need to be pushed to the front of the agenda," said Ms. Horwath at a campaign convention, where she was flanked by about 70 NDP candidates.

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The McGuinty government's controversial package of tax reforms introduced in 2010 - consisting of lower corporate taxes for businesses and the harmonized levy that has left consumers paying higher prices on such things as haircuts and gym memberships - figure prominently in the NDP and Tory campaign platforms. But each party is taking a different approach to reversing Liberal policies.

The NDP plans to follow the British Columbia model by shifting the tax burden from consumers to businesses. The Tories are counting on higher revenues and spending cuts to pay for $3.5-billion in consumer tax relief measures, including removing the provincial portion of the HST from residential electricity bills.

The NDP proposal to cut the 8 per cent provincial portion of the HST on gasoline prices by 1 percentage point a year over four years would cost $500-million a year once fully implemented and result in annual savings of $135 for a family with two children.

To pay for this relief, the NDP would hike business taxes, thus reversing cuts introduced by the McGuinty government. The corporate tax rate is set to drop to 10 per cent by 2013, but the NDP would roll back rates to their 2010 level of 14 per cent. The British Columbia government is also hiking business taxes to pay for consumer relief, following a massive public backlash to the harmonized tax in that province.

The NDP in Ontario has unveiled a series of measures to help consumers, many of whom are feeling squeezed by higher gasoline and electricity prices. The party has vowed to take the provincial portion of the HST off consumers' electricity and home heating bills. It would also freeze public transit fares for four years and address the skyrocketing cost of gasoline by setting a weekly cap on prices.

The latest pledge from the NDP leaves the Liberals, who are seeking a third term in October, questioning the credibility of campaign pledges on both sides of the political spectrum. Earlier this week, the Liberals launched an orchestrated attack on the Tories' promises, saying they do not stand up to scrutiny.

"Horwath is trying to fool people about the NDP with glossy packaging," said Revenue Minister Sophia Aggelonitis. "But behind the gloss it's the same old party of failed socialist experiments."

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