TORONTO—Ontario’s New Democrats will raise the corporate tax rate and offer financial help to hydro users if they win the June 12 election, NDP Leader Andrea Horwath said as she released her campaign platform.
A “modest” increase in the corporate tax rate, from 11.5 to 12.5 per cent, is needed to pay for major infrastructure projects like public transit expansion, Horwath told reporters after a speech to supporters at the University of Toronto.
“The Liberals have been rolling back corporate taxes in a way that’s left us with no options in terms of funding things like transit, so we need to make sure that money is there,” she said.
Canadian companies have been sitting on “dead money” they’ve saved from previous tax breaks instead of investing in jobs and the economy, added Horwath.
Ontario’s position as the top jurisdiction in North America for direct foreign investment would be jeopardized by the NDP tax hike, warned Liberal cabinet minister Brad Duguid.
“She’ll be placing that at risk and jobs at risk by hiking corporate taxes,” said Duguid, the province’s Minister of Training, Colleges and Universities.
However, professor Henry Jacek of McMaster University in Hamilton, Ont., said the impact of a small increase in the corporate tax rate is “over-hyped” by critics.
“There’s really no evidence that investors are running away, or refusing to invest in Ontario, because of corporate tax rates, even if they are raised a bit,” said Jacek.
An NDP government would also freeze college and university tuitions, and make student loans interest-free.
There would also be relief for hydro customers as the NDP promises to remove the provincial portion of the HST from hydro bills and repeal the debt retirement charge, saving the average household about $200 a year.
Horwath said the NDP would focus on government waste as they move to eliminate Ontario’s $12.5-billion deficit by 2017-18, the same year as the Liberals, but one year after the Tories say they could balance the books.
“We talked about getting rid of some of the waste we see in this province,” Horwath said. “We’ve made some commitments around getting rid of some of the fat at the top and making sure that that’s being reinvested in front line services. I believe there’s much more savings to be found.”
The NDP platform shares many ideas—such as a $29-billion transit fund—with the Liberals’ budget tabled May 1, but Horwath offered no apologies for rejecting the government’s fiscal plan, triggering an election.