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Politics Ontario Tories propose corporate tax cut, freezing civil servants’ pay

Tim Hudak, leader of the Progressive Conservative Party of Ontario, held a press conference Jan. 13 2014, at the Ontario legislature to talk about his plans for employment.

Fred Lum/Fred Lum/The Globe and Mail

Ontario Progressive Conservative Leader Tim Hudak will table a wide-ranging bill aimed at kickstarting the province's sluggish economy, with provisions for a corporate tax cut, a pay freeze for civil servants and more skills training programs.

The proposed law, to be presented to the legislature when it resumes sitting in mid-February, rounds up some of the many policy papers Mr. Hudak's party has been putting out over the last year and a half. It is also the opening shot of a likely spring election campaign, highlighting the contrast between the Tories' supply-side economic agenda and the more Keynesian thinking of the Liberal government.

The Tory Leader said Monday the measures he is proposing would create a better business climate and spur job creation.

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"If you lower taxes in our province, businesses are going to invest. They'll put out a new product, they'll add a new machine, they're going to hire more men and women," he said at Queen's Park. "If you're going out shopping to buy a new TV, you wouldn't go to where you find average prices – you're going to go to where you can find the best available price."

The bill would cut the corporate tax rate from 11.5 per cent to 10 per cent, end subsidies for wind and solar energy companies in hopes of reducing electricity costs and streamline rules for businesses. It would also bring Ontario into the New West Partnership, a deal between British Columbia, Alberta and Saskatchewan that eliminates trade barriers between the provinces.

One provision of the bill is aimed at getting more Ontarians into skilled trades to better match them with available jobs that are going unfilled.

Freezing civil service salaries to help wrestle down the province's nearly $12-billion deficit, meanwhile, will help reassure investors it is safe to put their money in Ontario, the Tories contend.

Mr. Hudak has released piles of policy papers, and the bill represents an attempt to pare down and package them, offering an outline of the platform the party will likely present in the next election.

The Tories are banking that jobs and the economy will be the central issue in the campaign, and are looking to spending cuts and deficit reduction to encourage private sector investment. The Liberals, by contrast, signalled late last year that they would rely on infrastructure spending to grow the economy.

Mr. Hudak's bill will be titled the Million Jobs Act, after the number of jobs he says its policies would create over an eight-year period.

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The Liberals contended Mr. Hudak's aggressive deficit-reduction plan would harm the economy by throwing public employees, particularly in the education sector, out of work.

"Tim Hudak's bill should actually be called the Killing Jobs With Billions of Cuts Act, because that's really what it is," Training, Colleges and Universities Minister Brad Duguid said.

The New Democrats, meanwhile, said Mr. Hudak had failed to show how his economic policies would actually create a million jobs.

"We don't have sense of how those jobs are really going to be created, based on the original announcement," NDP Economic Development Critic Catherine Fife said.

The NDP opposes across-the-board corporate tax cuts, instead favouring more targeted tax breaks that require companies to guarantee they will create jobs before they receive tax relief.

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