Hudak plans to cut corporate tax rate, end ‘crony capitalism’
PC leader said subsidies, grants to business "economically disastrous and morally wrong"
LONDON, Ont.—Would-be premier Tim Hudak railed at “corporate welfare” as he pledged to make Ontario the lowest corporate tax jurisdiction in North America—though he could not name those areas with lower rates.
In a campaign speech to a business crowd, the Progressive Conservative leader pledged an end to the corporate handouts he said inevitably lead to government corruption.
“We have seen again and again that the world of crony capitalism—where big government gets into bed with big business—that’s how corruption starts,” Hudak said to a smattering of applause.
“There is no credible evidence and no credible theory that says any country, any province (or) any state can subsidize its way to prosperity.”
Subsidies and grants to business, he said, are “economically disastrous and morally wrong.”
Hudak’s main election plank is his promise to cut taxes and slash 100,000 public-sector positions as a way to create more jobs.
His pledge, if elected June 12, is to cut Ontario’s corporate tax rate to eight per cent from its current 11.5 per cent.
Despite his boast that the province would have the lowest rate in North America, statistics appear to suggest otherwise and his claim rests largely on the federal government.
For example, state corporate taxes in Colorado run at 4.63 per cent, while low-wage states such as Mississippi, South Carolina and Utah come in at five per cent.
However, the Tories argue the combined federal-provincial rate would be 23 per cent if Ontario gets down to eight per cent, which they say would be the lowest in Canada.
They also say the federal corporate rate in the United States is 35 per cent, however, the rate actually varies from 15 per cent to 35 per cent, depending on income level.
Although his speech was generally well received, the chamber of commerce crowd seemed to split along small business and large corporation lines in their applause as Hudak attacked corporate subsidies.
One small business owner queried whether lower taxes would make up for the government money that helped him hire staff.
Hudak was adamant it would.
He slammed what he called a $2.5-billion corporate welfare slush fund Liberal politicians can access to hand out to companies at their discretion.
“It’s wrong,” he said. “It is corruption waiting to happen.”
NDP leader Andrea Horwath said corporate tax cuts have proven ineffective in the past.
“Somehow, Mr. Hudak is sure that if we just drive it down to eight (per cent) all of a sudden, this is going to be a winning policy and we’re going to get those jobs and we’re going to get that investment,” Horwath said.
“I don’t think that that’s the case.”