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Saturday, Feb. 4, 2006

Tax cuts loose their lustre

By GLORIA GALLOWAY
Globe and Mail
Thursday, Oct. 2, 2003

 Ontario voters didn't just elect a government that promised to bring in a new era of better schools and health care. They refused to be enticed by tax cuts, a carrot that the Progressive Conservatives successfully dangled through the past two provincial elections.

Tory Leader Ernie Eves ran on the pledge to make mortgage interest and private-school tuition tax-deductible and to cut the education portion of property tax for seniors. Voters said no thanks.

 Instead, they endorsed a party that promised only to hold the line on personal taxes and to increase the corporate tax by 1.5 per cent. But John Williamson, the Ontario director of the Canadian Taxpayers Federation, said he doesn't believe the electorate rejected the message of tax relief. Instead, they rejected the messenger.

 "I think it's because the man who was selling [the tax cuts] was not believable. Full stop," Mr. Williamson said. Dalton McGuinty's Liberals won the election by promising to fix what is wrong with government while maintaining taxes at their current levels.

"On the other side," Mr. Williamson said, "you had a premier who had delayed tax cuts and violated his own taxpayer-protection law" in doing so. Voters were tired of feeling duped, he said.

The Conservatives, at one time, had promised that all homeowners would get a break on the education portion of their property taxes.

 Instead, Mr. Williamson said, the package was enriched but limited to seniors. The Tories ran in 1999 on a promise to cut property taxes by 20 per cent. Former premier Mike Harris made good on the first 10 per cent, but the second half of that promise was never kept.

 "So, at the end of the day you had a salesman [in Mr. Eves] who just wasn't believable," Mr. Williamson said. Then there was the question of the provincial deficit. Mr. Eves said the books were balanced. That boast was thrown into doubt, not just by Mr. McGuinty, but by former architects of the Conservatives' own Common Sense Revolution. One thing Mr. Harris accomplished, Mr. Williamson said, was creating a public that will not vote for tax increases or deficits. "Dalton McGuinty was very cautious in his message," he said.

 He made the iron-clad commitment that he would not raise taxes or allow the province to run in the red. "Mr. McGuinty was able to sell himself as being fiscally responsible." Henry Jacek, a professor of political science at McMaster University, sees it another way.

 He said voters realized that tax cuts would come with a price - decreased public services. The Common Sense Revolution sold the concept that tax cuts would somehow pay for such things as health care and education, Prof. Jacek said. Mr. Harris, he said, told voters they could have public services at sale prices but, after a while, they realized they were getting "shoddy goods." Even the seniors who would have benefited most from the Conservative tax relief rejected the measures, Prof. Jacek said.

 Some of them worried that the reduced taxes would mean longer waits for health services such as hip replacements and cataract surgery. Others simply felt a sense of guilt. "Grandparents really dote on their grandchildren," Prof. Jacek said.

"They said `I'm hurting my own grandkids by taking this money.' " Judy Cutler, communications director of Canada's Association for the 50-Plus, said that while wealthy seniors stood to gain from the property tax credit, most of those on low or fixed incomes would have enjoyed no benefit at all.

 Seniors had to ask themselves "is it really worth the sacrifice of affordable home care, proper health care and quality of life," Ms. Cutler said. Then there was the fact that the Conservative promises pitted the generations against each other. "Seniors aren't stupid," Ms. Cutler said.

 Tories were arrogant, she said, in their belief that older people were willing to be bought at the expense of others. "That's not how society works."



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