May 20, 2001

Statement by the Provincial Executive Committee
Communist Party of Canada (Ontario)

This budget will restructure Ontario so that it will resemble Alabama more closely than any Canadian province.

Starting with legislation to downsize corporate tax rates to 8% – the lowest level in almost 100 years – the Tories have ensured that the cupboard will be bare of corporate tax revenues needed to fund public services and social programs in Ontario.

That's compounded by the downsizing of the small business tax rate to 4%, the continued roll-back of the capital gains tax, the elimination of the provincial surtax on incomes of $54,000 to $70,000, the review of tax incentives to see if tax loopholes for business and the wealthy can be further enlarged, the decision to pay down the debt by $3 billion and to create a $654 million political slush fund for the government.

The decision to flat-line corporate taxes to the lowest levels anywhere in North America – or anywhere in the Americas – was rejected by a discerning public when Stockwell Day tried to sell the same idea prior to the federal election. Public opinion was so opposed that Day ended up ditching the flat tax, which would have had the same result at the federal level as the legislated 8% corporate tax rate in this budget.

The result will be the gutting of social programs, as the largest burden falls on the backs of individual taxpayers – homeowners and tenants – whose tax revenue alone could not possibly cover the costs of social programs. Transfer payments in all the key areas are so small they don't even compensate for inflation, let alone the cuts of previous years. Over the past decade furthermore, program spending has declined from 15.9% to 11.7% of the economy.

In health care, the budget proposes to spend the equivalent of 5.3% of the GDP, which is 0.4% less than the amount spent in 1995, and takes no account of a growing and an aging population. The real story in health care is the revenue crisis, not the bogus government propaganda that suggests health care spending is spiralling out of control. In fact, the crisis in the delivery of education, and social services and programs generally, is a made-in-Queen's-Park revenue crisis.

"Balanced budget" legislation in the hospital sector will make it illegal for public hospitals to run a deficit. Transfers are also at least $400 million below what is needed just to hold the line on existing hospital services. Since almost every hospital in the province has been deficit financing for years, this will guarantee massive cuts, and add made-in-Queen's-Park fuel to the health privatization fires. Corporate, and corporate-inspired pressure for two-tier health care and privatized medicine will move the campaign to dump Medicare in Canada into high gear.

The balanced budget legislation will be extended to include all organizations which receive provincial grants or transfers. Municipalities and school boards have already been forced to carry through massive cuts to programs and services, or face legal consequences of deficit budgeting.

In the name of "accountability," this government now threatens every elected and publicly accountable body in the province with criminal proceedings, should they refuse to implement provincial cuts and directives to privatize.

The "bomb" in the budget, as the Toronto Star calls it, is indeed the "Equity in Education Tax Credit" legislation which, using tax credits, introduces private school vouchers in Ontario. Two tier education, and the public funding of private schools have arrived, constituting the greatest threat ever to universal quality public education in Canada.

The immediate consequences of this legislation will be the removal of $300 million from public and separate school systems, the expansion of religious indoctrination in publicly-funded schools, and the balkanization of education in Ontario. This figure will undoubtedly increase, as the public system crumbles from lack of funding, and enrolment in private and religious schools increases, resulting in the removal of more funds from the public system.

This is the exact reverse of legislation passed within the last five years in Newfoundland and Quebec ending the balkanization of education, separating church and school, and creating a single, non-secular, publicly funded system.

What the Tories have done to public education in Ontario is ALABAMA writ large. No wonder the business press has expressed strong opposition to vouchers: literacy is important to employers, as well as to workers and citizens. Literacy is important to democracy.

Privatization of health and education is coupled with the privatization of the Bruce nuclear plant, the Province of Ontario Savings Office, and roads and infrastructure including water and sewage treatment through SuperBuild. Public construction and maintenance of provincial roads, highways and bridges will now be handed over to private interests who will be offered over $1 billion in tax revenues to use in construction, and who will then be free to profit on tolls. The Highway 407 toll rights were recently extended to 99 years, for example.

Municipalities will be pushed into similar "partnerships" whereby private companies will receive public monies to restore or rebuild aging water and sewer systems, operate them, and charge whatever the market will bear...

Public opinion will oppose the levelling of Ontario that is embedded in every line of the budget.

The task before labour and the democratic movements is to build a united and organized opposition movement around the province with the power to block the budget and bring down the government. This is the time for province-wide Days of Action. This is the time for mass mobilizations at Queen's Park. This is the time for a broad citizens' movement – a people's coalition – to demonstrate the power of the people against a government committed to corporate greed.

For its part, the Communist Party will work to defeat this budget and the corporate agenda it is fast-tracking. We will work with all those committed to saving Medicare and public education, to secure public services against privatization, to win a progressive tax system based on ability to pay, and to safeguard democracy and expand civil and labour rights.

© 2001 Communist Party of Canada