Recommendations for the Provincial 2014 Budget

Honourable Charles SousaMinister of Finance
7 Queen’s Park Crescent, 7th Floor
Toronto, ON M7A 1Y7
March 28, 2014
Dear Hon. Minister Sousa,
In this year’s budget, I urge you to focus on plans that protect the people and places we love by delivering solutions on the following three priorities: 
1. Creating jobs 
2. Securing our children’s future
3. Protecting our food, water and natural resources
Ontario is facing major challenges. We desperately need a jobs plan to replace the 300,000 manufacturing jobs lost over the past decade. Gridlock is hurting our economy, health and quality of life.  Poverty and inequality are on the rise. Our natural resources are threatened. Youth unemployment is unacceptably high. We can and must do better.
Minister, I’ve watched in dismay over the past months as political games have delayed important legislation, failed to deliver action on pressing concerns, and reduced government to the worst form of pandering. Ontarians deserve better. We need an honest conversation about the choices we must make to balance our budget in a fair and effective way. We need a budget that puts the public interest and good policy first, not political games to secure votes.
Budgets are about choices. They reflect who we are and who we want to be. Living within our means doesn’t require gutting public services if we make smart choices. We ask the government to make choices that protect the people and places we love by delivering jobs, securing our kids’ future and putting food, water and natural resources first. 
1. A job creation plan that gets our economy moving again and makes our local economies more resilient.
Ontario desperately needs a bold plan to create jobs for the 21st century to replace the 300,000 manufacturing jobs lost in the last decade. We especially need a vision for the future that tackles Ontario’s unacceptably high youth unemployment rate today. 
Local Jobs
Ontario has a choice: the province can continue the failed policies of handing out cheques and tax breaks to big multinational corporations, or we can help our homegrown businesses and entrepreneurs create sustainable local jobs and develop new businesses in emerging industries. 
By closing corporate tax loopholes designed in and for yesterday’s economy, we can invest in the right incentives to spur local job creation and business development in the emerging high tech, clean tech and advanced manufacturing economy. The GPO recommends making temporary restrictions on input tax credits for large corporations and financial institutions to claim items like meals and entertainment permanent and to cancel special tax treatment for established industries such as mining. The GPO also proposes that your government raise corporate tax rates to 13%. 
The GPO recommends that the 2014 budget use money saved from closing corporate tax loopholes and reversing corporate tax cuts to fund:

  • A job creation plan that helps small businesses and new entrepreneurs double the number of local jobs they create without paying taxes on those jobs. This can be accomplished by doubling the Employer Health Tax exemption from $450,000 to $900,000 for businesses with a payroll under $5 million.
  • An investment tax credit for entrepreneurs commercializing innovation in the emerging global clean-tech economy.
  • Tax credits for training programs and apprenticeship reform so young workers have the skills needed to create and obtain the jobs of the future today.
  • A fund for local food infrastructure and loan guarantees to provide homegrown businesses with access to affordable capital to invest in and operate local food processing facilities.

Tackle gridlock to get our economy moving again

Ontario desperately needs an honest conversation about funding public transit. In addition to provincial transit plans for Toronto the Green Party also supports transit infrastructure for communities across Ontario. This includes expanded GO service to places like Guelph, Kitchener-Waterloo, Barrie and Niagara, as well as support for Ontario Northland. 
Gridlock is grinding Ontario’s economy to a halt. It costs our economy over $6 billion per year in lost productivity. If the status quo doesn’t change, gridlock will cost us $15 billion per year. This is not sustainable or responsible.
We need action, not hollow promises or additional studies to tackle gridlock. We all benefit from ending gridlock: the farmer shipping product to Toronto, the tech entrepreneur commuting to Guelph-KW, the student traveling home to North Bay and the manufacturer transporting product through the GTHA for export. Investing in transit is good for our economy, environment and quality of life.
The GPO supports revenue tools and taxes to fund transit that meet three principles:
1. The revenue is placed in a dedicated transit fund so it goes where it is supposed to go.
2. A range of revenue tools are used that are fair, balanced and progressive.
3. The revenue tools should include demand management tools so that we begin to reduce gridlock now and not wait to ease gridlock until new transit is built.
I’m deeply concerned that pressure from the opposition parties, especially the NDP, is weakening the Premier’s resolve to get our economy moving again by tackling gridlock. Don’t let the people of Ontario down by failing to invest in transit now.
The people of Ontario also need and want safer streets and roads, especially for our children. It is unacceptable that the province does not have a dedicated fund to support municipal investment in safe streets for cyclists, pedestrians and wheeled mobility users. The Green Party is calling on your government to make a financial commitment to safe streets. Even the U.S. dedicates 1.6% of its transportation budget to cycling infrastructure. 
The GPO recommends that the 2014 budget include:

  • A commitment to creating a dedicated revenue fund that will provide a minimum of $2.5 billion per year to fund public transit, expanded GO service and support for Ontario Northland. The Green Party prefers the following revenue tools: land value capture, gas tax, congestion fees, parking levies.  We are willing to work with your government to support other sources of revenue that are dedicated to transit.
  • Redirecting existing funds for new highways to restore funding for operating costs for municipal transit systems.  
  • An allocation of 2% of the existing transportation infrastructure budget for a dedicated fund for municipalities to invest in infrastructure to make roads safer for pedestrians, cyclists and wheeled mobility users.

2.  Protect our children’s future
Our generation, like those before us, has a responsibility to secure a sustainable future for our children. The Green Party is calling on the government to put our kids first by prioritizing investments in their classrooms and taking action to reduce childhood poverty. These priorities will help our children get off to a good start in life and secure prosperity for the next generation, so that our kids will be able to look after us in our retirement years. 
Improve Education
Our kids deserve a high quality education. Our kids need a 21st century education to provide the skills to be successful in the 21st century.
Yet, education support staff are being cut, rural schools are being closed, special education programs are not available for students who need them, and unemployment rates for qualified teachers are unacceptably high. Ontario has now had an education crisis under successive NDP, Conservative and Liberal governments. 
Instead of cuts in our classrooms, the Green Party believes Ontario needs a frank conversation about whether we can afford to fund four separate school boards, especially when the cost of doing so exceeds $1 billion of spending outside the classroom per year. Our kids deserve better.  
It is time to end segregation in our schools by merging the best of the Catholic and public school boards into a single public school system with French and English boards. 
We owe it to parents, teachers and especially our children to create a fair, financially responsible school system that prioritizes resources in our kids’ classrooms.
The GPO recommends that the 2014 budget include:

  • A commitment to establish a citizen’s assembly or public commission to determine the best way to merge the Catholic and public school boards into a single public school system with French and English boards.
  • A commitment to study the financial savings from moving to a single public school system with French and English boards and a commitment to dedicating the savings to be reinvested in our children’s classrooms.

Reduce Childhood Poverty

We also owe our kids a good start in life by making a firm commitment to end childhood poverty. Far too many working families cannot afford to pay for the necessities. Too many kids go to school hungry every day. Ontario must change its budget priorities so our kids and grandkids come first. 
The Green Party is calling on the government to make short-term and long-term commitments to reducing poverty. 
Short-term commitment to reduce poverty
I remain disappointed that your government has thrown away billions of dollars on cancelled or moved gas plants, subsidies for wasteful electricity consumption and billion dollar flip flops on the Scarborough LRT. 
At the same time, you have not prioritized finding the $340 million to fund recommendations from your government’s own Commission for the Review of Social Assistance.
The Green Party, on the other hand, has a plan to reduce poverty and pollution while balancing our budget in a fair and socially just way. By ending the 10% subsidy for electricity consumption that mostly benefits the wealthy, Ontario can afford to fund reforms to social assistance that remove barriers to work and provide financial support for those who need it most.
The GPO recommends that the 2014 budget cancel the misleadingly named Clean Energy Benefit and use the $1.1 billion to reduce poverty and pollution by investing: 

  • $270 million for an energy rebate program targeted to lower-income families and seniors.
  • $340 million to fund the recommendations from the Commission to Review Social Assistance to transform social assistance from a program that perpetuates poverty into a strategy that reduces it.
  • $400 million for a job creating energy efficiency building retrofit program to help homeowners and tenants save money by saving energy.
  • $90 million to fund an increase in the Ontario Child Benefit to provide additional support for low-income families with children. 

Long-term commitment to eliminate poverty

Fully funding the recommendations of your government’s Commission for the Review of Social Assistance and increasing the minimum wage are good first steps to eliminating poverty. However, Ontario needs a more efficient, effective and affordable way to reduce poverty over the long term. 
The current system of support programs – for social assistance, childcare, elder care, educational grants, housing subventions, special diet allowance, for example – are often over-subscribed and under-funded. They also usually require onerous application and qualification procedures, and sometimes continued monitoring and scrutiny. It leads to bloated bureaucracies to administer programs and police the poor. It lacks dignity. And it hasn’t worked.
Ontario needs a new approach. We need a system that puts money in the pockets of people who need support, not in a costly system of administration. The Green Party of Ontario is calling on the government to initiate steps in the 2014 budget to implement a Guaranteed Annual Income (GAI) in Ontario. 
A GAI would ensure that every person of working age in Ontario who files an income tax return would have an income that at least meets the poverty level. It would reduce administrative costs and government bureaucracy. It would lead to a more efficient, effective and dignified system of social assistance. 
The GPO recommends that the 2014 budget include:

  • Establishing a public commission to determine how Ontario can best implement a program to provide a guaranteed annual income for all citizens. 

3. Protect Food, Water and Natural Resources
Ontario is blessed with beautiful landscapes, fresh water, natural resources and good farmland. But we can’t take this for granted. Responsibly managing our natural resources is essential to economic and environmental success.
Ontario is losing 365 acres of farmland a day, an annual area the equivalent of the size of Toronto. We are the least efficient users of aggregates of any jurisdiction in the world. And the province is squandering our natural resources with the lowest mining royalty rates in Canada. In 2010 and 2011 the province’s mining industry extracted metals and minerals valued at $17 billion but only paid 1.4 percent ($250 million) to the people of Ontario for those resources. 
The people of Ontario deserve a fair rate of return for our natural resources. We need a tax system and cost structure in place to reduce waste and create incentives to use precious finite resources efficiently. 
Although stronger protections for farmland and water are out of the scope of the budget, your government can take steps to ensure polluters pay their fair share and the people of Ontario receive fair return for natural resources. Even the Drummond report called for the government to generate revenue with the simple principle of asking polluters to pay their fair share.
We need an honest conversation with the public and businesses, as well as political leadership, to move ahead with solutions like the right price for aggregate extraction, water taking permits, levies on pollution and mining royalties.
The right revenue tools will provide a financial incentive to reduce pollution, take the burden of dealing with pollution off the backs of taxpayers, restore funding to the Ministry of Environment and the Ministry of Natural Resources, spur innovation and create jobs. In a province with an $11.7 billion deficit, Ontario cannot afford to liquidate our natural resources at rock bottom prices. 
The GPO recommends the 2014 budget include:

  • An increase to the levy for aggregates from 11.5 cents per tonne to a minimum of 50 cents per tonne, which is equivalent to the levy in Quebec. Over time, the levy must be set at a rate that provides the Ministry of Natural Resources, the Ministry of the Environment and municipalities with the revenue they need to cover all costs associated with aggregate extraction and rehabilitation.
  • An increase in the water-taking levy for phase one industrial and commercial purposes from $3.71 per million litres to $13.71 per million litres. 
  • An immediate increase in mining royalties to the Canadian average of a 5.6% return on gross revenue with plans to increase the rate of return to 10%.

Conclusion: be honest with people

Minister, I realize that we may be in an election soon. I strongly urge you to resist election gimmicks like the NDP’s $100 hydro bribe. 
I don’t believe for a moment that people really want our role as citizens reduced to cashing a bonus cheque at the voting booth. I am convinced politicians can earn votes with integrity, good public policy and a vision for a better future.
Instead of announcing grand plans with no plan for funding, let’s have an honest conversation about investing in the services and infrastructure we need with plans for how we’re going to pay for it.
Ontario needs a budget that will protect the people and places we love by creating jobs, securing our kids’ future and putting our food, water and the environment first. And we need it now.
The Green Party appreciates your consideration of our recommendations. You are welcome to contact our office with any questions or if you require further information.
Thank you.
Mike Schreiner
Green Party of Ontario