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Saturday, Feb. 4, 2006

Air of suspicion hangs over PCs' spending plans

By MURRAY CAMPBELL
Globe and Mail
Wednesday, Sep. 10, 2003

KITCHENER, ONT. — It's a cruel irony that Ernie Eves, whose political fame rests on his wizardry with numbers, finds himself at the centre of a controversy over whether Ontario can afford another Conservative government.

In his six years as finance minister, Mr. Eves was a model of clarity as he trimmed spending to produce successive balanced budgets. That reputation is clouded now, however, and it's his own fault.

It isn't just that the Conservative Leader stumbled badly on Monday when he said he couldn't remember "off the top of my head" the cost of his party's election promises. He recovered later in the day on that, but an air of suspicion still hangs over Tory spending plans.

Mr. Eves's credibility is vital to Conservative hopes for success on Oct. 2. He is pledging nearly $5-billion of further tax cuts while Liberal Leader Dalton McGuinty says the province cannot afford them and is pledging to retain personal and corporate taxes more or less where they are.

Mr. Eves will be the winner in a lot of voters' eyes if he can prove he can reduce the tax burden and still balance the budget. But what if he's not telling the whole truth? Mr. Eves has been having great fun with Mr. McGuinty, saying his refusal to cut taxes is tantamount to a tax hike. What if the Tories can't afford their own promises?

The skepticism about the Conservative fiscal plan doesn't come out of the blue. For months, many mainstream economists have suggested the government's annual budget bears a resemblance to a Ponzi scheme. They say the Tories may already be running a deficit of $2-billion or more.

On top of that, Mr. Eves has unveiled a slew of promises to appeal to a variety of constituencies. He predicts they would cost $658-million in the first year of a re-elected Conservative government and would be offset by $700-million in "administrative efficiencies" for a supposed "surplus" of $42-million. Successive $50-million annual trims in government expenditures would pay for the pledges in later years.

The Tory Leader promises that he would continue his government's record of balanced budgets. That should be the end of the story, given his accomplishments, but there is a perception of evasiveness in this campaign that wasn't evident in earlier years.

Former premier Mike Harris, for example, always produced audited analysts' statements to back up his projections. It's a trick Mr. McGuinty duplicated this campaign, but the Tories believe they have built up enough credibility since 1995 that they don't have to jump through this hoop.

"I have a track record," Mr. Eves told reporters yesterday in Brantford. "I think I have something that the people of Ontario can trust and believe in."

The Conservatives' lack of transparency is allowing the Liberals to create mischief.

Gerry Phillips, the party's veteran finance critic, got up before dawn yesterday to drive to Brantford to get to reporters before Mr. Eves's first event. He accused the Conservatives of hiding the true cost of their campaign pledges because they had not included new commitments on health spending or their promised top-up of education spending. Mr. Phillips suggested that over four years the Conservatives have committed themselves to an eye-popping $5-billion in new spending. This, he said, combined with promised tax cuts of $5.2-billion to create a $10-billion sinkhole. In his view, the Conservatives are like that guy on the television commercial who watches his daughter play with her Etch-a-Sketch and then shakes his Visa bill and watches the balance owing shrink to zero.

"They are irresponsible and reckless," Mr. Phillips said.

An hour later, Mr. Eves retorted: "Would you want Gerry determining the finances of your hot-dog stand?"

There is likely nothing that could arise that would force the Conservatives into further disclosure. They feel they've got the wind in their sails because the public is hungry for more tax cuts. The Liberals are hoping that voters will ask themselves whether Ontario can afford them. It will be an epic battle.



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