Former Mayor Larry Di Ianni and Mr. Ecklund's daughter Erika

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LARRY'S CORNER- Hamilton's Former Mayor Speaks

former Mayor of Hamilton, Larry Di IanniOntario’s Budget: A Risky Proposition or a Sure Thing?

By Larry Di Ianni
(posted March 30, 2009)

A good Progressive Conservative friend of mine called me yesterday, shortly before the budget was to be announced, to tell me that this economic blueprint would spell the end of McGuinty’s governance of Ontario. This usually sensible person had his opinion verified by his barber who had just shorn his locks. “My barber is the pulse of the people, and he is angry at the rising costs of consumer goods because of the harmonized sales tax.” I told my friend to wait for the details of the budget before writing any obituary for the provincial Liberals and Mr. McGuinty.

Judging by the tepid criticism from the NDP and Conservatives, the favourable response by business and editorialists, the fervent support by municipal leaders, and the shrewd handling of some hot potatoes by the government, it seems as if my friend’s barber may have spoken too soon. This, in fact, may be the defining budget for the times.

Warren Kinsella, the masterful Liberal strategist earlier criticized the Federal budget as a department store grab-bag with no unifying theme, just a collection of this and that which had you leave the shopping area without having purchased anything, wondering why you even entered in the first place. Of the Ontario budget, Kinsella points out that the provincial government tried to find a theme to get the province through the chaos. “If you were to summarize it, it’s a budget that seeks to help the people and firms that are in trouble right now. And it tries to anticipate who might be in trouble in the coming months, and help them out too. It’s that simple.”

The broad themes of support may be summarized thusly: First, to preserve and create jobs by contributing $34B in infrastructure stimulus. Second, the government is setting money aside to make Ontario more competitive in the long term with a strategy that provides investment in Research and Development, in Green technology, and in infrastructure research and biomedical technology. Thirdly, they are proposing the risky but needed comprehensive tax reform with a single, harmonized sales tax to replace the GST and PST taxes. Fourthly, flowing from this tax reform, personal income tax reductions are introduced for 93% of Ontarians, as well as significant reductions for businesses and corporations, as finance minister Jim Flaherty had been advocating all along. The permanent tax reductions for individuals are augmented by a $1000 one time cheque for families earning less than $160,000.00 per year, and $300 for singles, as well as tax exemptions for homes under $400K, and a slew of personal items that should make any barber pleased.

Hamilton was also the big winner in all of this. Thanks to Ted McMeekin and Sophia Aggelonitis, city hall will receive over $16M to help pay for our social services needs. Our tax increase will be in the neighbourhood of 1.9%, a much more responsible number than had been predicted earlier. It could have been a 0% increase with a little more work, but 2% is better than 10%. Additionally, Hamilton is to get its share of infrastructure funds over the next while as money is provided for ‘shovel ready’ programs.

The dark cloud hovering over this budget is the deficit territory we are back into for the next number of years. This may be an area which the PC’s will try to exploit for political gain. However, their complaints will be blunted by the federal deficits as well as the global spending that is being done by countries all over the world in order to deal with the harsh economy. All in all, the team of McGuinty, Duncan, McMeekin, and Aggelonitis can take a deep breath and a deserved bow for the work they did.

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