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Flaherty's 'attacks' on Ontario undermine economy

Hydrogen

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Jim really knows how to go about getting votes. Fascinating to see the Conservatives working so hard to not win votes in Ontario.
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Flaherty's 'attacks' on Ontario undermine economy: McGuinty
The Canadian Press
March 2, 2008 at 3:59 PM EST

TORONTO — Federal Finance Minister Jim Flaherty undermined confidence in the Canadian economy with his “inappropriate and potentially harmful†comments aimed at singling out Ontario as the last place in Canada to start a business, Premier Dalton McGuinty said Sunday in a letter to Prime Minister Stephen Harper.

Calling Mr. Flaherty's remarks to a Halifax audience Friday an “extraordinary attack on Ontario†and the “latest in a series of attacks on Ontario by your finance minister,†Mr. McGuinty said the federal government is betraying its responsibility to champion the Canadian economy.

“The very last thing Ontario families and businesses need is for your minister of finance to actively seek to undermine confidence in the Ontario economy,†Mr. McGuinty wrote.

“And this is particularly true at this point in time, when Ontario is being challenged by a slowdown in the U.S. economy, a high dollar and high oil prices.

“I respect Minister Flaherty's right to offer his opinion, but I strongly disagree with both the advice and the way in which it was offered,†he added.

The letter is just the latest salvo in the province's battle with the federal Tories over Ontario's struggling economy — a fight that's degenerated into name-calling and personal insults in recent weeks.

In a speech to the Halifax Chamber of Commerce Friday, Mr. Flaherty called on all provinces to aggressively cut the business tax rate to 10 per cent by 2012 and help him create a Canadian “brand.†The governing Ontario Liberals don't understand that “you must reduce your business taxes over time,†Mr. Flaherty said.

“Their business taxes are the highest in Canada. If Mr. McGuinty thinks that's good for the manufacturing sector in Ontario, he's wrong,†Mr. Flaherty said.

“It discourages investment in the province of Ontario. If you're going to make a new business investment in Canada, and you're concerned about taxes, the last place you will go is the province of Ontario.â€

Mr. McGuinty has argued the province is cutting business taxes but it's not willing to cut them at the expense of health care and education funding.

The province recently announced $1.1-billion in business tax cuts in its fall economic statement, Mr. McGuinty said, noting Ontario's corporate income tax rate is lower than the federal government's projected rate for 2012.

But it takes more than just tax cuts to grow the economy, Mr. McGuinty added. Governments have an obligation to help out families “being hit hard by powerful, global economic forces,†Mr. McGuinty said.

“While it is understandable that our two governments may differ from time to time on matters of economic policy, it is completely unacceptable for Canada's minister of finance to publicly and deliberately attack the choices made by Ontarians,†Mr. McGuinty wrote.

“An attack on Ontario's choices and priorities undermines confidence in the Ontario and Canadian economy.â€

Before tabling his budget last week, Mr. Flaherty lashed out at Mr. McGuinty saying his tax policies were fuelling the downturn and massive job losses in the manufacturing sector. Ontario's lagging economy is partly due to “lack of innovation, lack of foresight and a lack of leadership,†Flaherty had said.

Economic Development Minister Sandra Pupatello responded by calling Mr. Flaherty a “cartoon character†and accused him of “bald-faced lies.†If the federal Tories want a war of words, they will get one, Ms. Pupatello warned.

The two sides had a brief detente leading up to the federal budget last Wednesday, but Ontario Liberals were quick to call the budget a “missed opportunity†an hour after it was tabled because it didn't spend enough of the surplus on helping Ontario's hard-hit manufacturing sector.

A recent poll suggests the feud is winning public support for Mr. McGuinty. The Canadian Press Harris-Decima survey, which looked at the war of words between the two politicians, suggested 47 per cent of respondents sided with Mr. McGuinty while just 27 per cent backed Mr. Flaherty.

In Ontario, the poll found 56 per cent support for the Premier and 25 per cent support for the minister.
 

AlvinofDiaspar

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Ontario's lagging economy is partly due to “lack of innovation, lack of foresight and a lack of leadership,” Flaherty had said.

So true, circa 1995. I wonder how much taxes can Ontario cut if a) there is oil to be dug up and b) she doesn't have to send billions to the Feds.

AoD
 

St. Even

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Flaherty has basically told business not to invest in Ontario. Unbelievable. After calling McGuinty the small man of Confederation for demanding fair representation for is province. After telling cities the government isn't in the pothole business.

This is the same government that promised a new era in federal-provincial relations. Ask McGuinty and Nfld's Williams what they think about that.

This is the same government that promised to restore Canada's international reputation -- but in the past two years we've been slammed internationally on Kyoto, on human rights, etc. and by "credibles" like Bono and the UN.

This is the same government that accused the previous Liberal regime of governing by opinion polls. Yet, it turns out, their own investigation found that this government actually commissions about two polls a day, more than the previous government.

This is the same government that promised a new era in ethics and representative democracy. Yet they went after David Emerson a couple days after he was elected as a Liberal and lured him to the Conservative side with a cabinet post, just in time for the swearing-in ceremony. Harper even appointed a good buddy from Montreal, who was unelected, to the cabinet. And this Cadman thing.....oi.

I can't recall a federal government more arrogant, more viciously partisan, and contemptuous of the democratic process. They never expected to be in power this long and have run out of policy ideas, as witnessed in their last budget. Everything they're saying and doing recently tells me they DON'T want to be re-elected.

But the scary thing, for me, is that this is very reminiscent of the first Mulroney mandate. Overall, that government lost an average of one cabinet minister PER YEAR to allegations of wrongdoing between 1984 and 1993. We have such short memories, that Mulroney got a second majority after all that miserable incompetence in their first term.

Despite their best efforts, I fear that this Republican, er, Alliance, er, Progressive, er, Conservative government will be returned. And if they manage to insult us a bit more, we might even give them a majority.
 

Prometheus The Supremo

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^They'll dig their own hole slowly, but they will dig it.

and our tax dollars will pay for that hole, much like the collection plate money payed for jimmy swaggart's.
 

lordmandeep

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what worries me is Jim Flattery is still using his messed up philosophy he used in Ontario, federally now.

CUT TAXES, INCREASE SPENDING!!!
 

unimaginative2

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So true, circa 1995. I wonder how much taxes can Ontario cut if a) there is oil to be dug up and b) she doesn't have to send billions to the Feds.

I totally agree, until part b). Ontario's government doesn't send any money to the federal government. Not a cent, so it has absolutely no bearing on its tax rates.

Ontario's taxpayers pay the exact same federal tax rate as everybody else across the country. Any transfers meant to equalize provincial spending room are made in the federal budget.

Flaherty is still bitter that Ontarians have rejected his and his party's schemes to destroy (Oops! I meant "Improve competitiveness of and innovation in") our province.
 

AlvinofDiaspar

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unimaginative:

I was more or less referring to the unwillingness for the Feds to inject much, if any funding into the beleagured industrial sectors of Ontario in this case.

AoD
 

lordmandeep

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strangely in a war of words, i think Mcgunity is wining the support of the public.
 

afransen

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A poll on CBC New Politics showed that 50-ish% support McGuinty while only 27% or so support Flaherty. Only place where more people agree with Flaherty than McGuinty is Alberta.
 

billonlogan

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unimaginative:

I was more or less referring to the unwillingness for the Feds to inject much, if any funding into the beleagured industrial sectors of Ontario in this case.

AoD

This economic slow down has been coming for some time. It’s too bad the Premier ignored it. The people of Ontario are the ones to suffer especially the ones losing manufacturing jobs.
 

AlvinofDiaspar

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billonlogan:

Just how did he "ignore it"? Whether you believe in injection of government money into the sector as a policy or not, McGuinty did do so.

AoD
 

unimaginative2

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He...ignored it? And how, pray tell, did he do that? By attracting more automotive investment than any other premier in history? By constantly encouraging the federal government to invest in the manufacturing sector? By supporting the manufacturing sector as much as he can with a limited budget, all the while being accused by the Tories and their friends in the media of spending too much? What do you expect him to do? Order the Americans to keep buying houses? Oh, I know the solution! Become a Conservative.

The problems with Ontario's economy, aside from the global problems, all stem from Alberta's overheated resource economy which has caused high inflation, exchange, and interest rates, which combine to be killer for the manufacturing sector. Harper's doing absolutely nothing about Alberta's economic mess that's spiraling out of control. I'd say he's the one ignoring the problem.
 

afransen

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Realistically, not action is going to have substantial impact. This downturn merely has to be weathered. We do, however, need structural reforms. That means shifting tax away from investment and income toward consumption. That means harmonizing the PST with the GST (making it a VAT, not sales tax). That means taxing carbon emissions and lowering corporate income tax rates. Personal income taxes do not really need to be lowered, mind you.

We should also consider something like a Basic Annual Income, while simultaneously canning welfare, minimum wage, etc. This would encourage greater workforce participation while preventing people from falling through the cracks in the social safety net.
 

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