Ontario NDP’s fresh face masks a real threat

Andrea Horwath doesn’t look like the most dangerous woman in Ontario. The blonde single mother slips a sweetener in her cappucino and laughs easily as she talks about the first week in the campaign. But it is the very fact that she is a fresh face in the provincial race — a likeable alternative to the two middle-aged males leading the other parties — that makes her such a threat.

Even at current polling levels, Ms. Horwath may hold the balance of power in a minority government. And that’s before the leaders’ debate, in which she stands a very good chance of picking up more support, particularly among women, who are likely to respond well to her brand of warm fuzziness.

That would be a very bad thing for the province. The NDP platform envisages reversing the Liberals’ corporate tax cut regime to take the provincial component back to 14% from the current 11.5% (the Grits plan to reduce it further to 10% to give the province a combined federal-provincial rate of 25%).

The move would free up $1.8-billion a year for the NDP to spend on other things. But since that might be seen as rather crass politics, the NDP has rubbished the effectiveness of corporate tax cuts. Over coffee during a campaign stop in Ottawa, Ms. Horwath poured scorn on reducing taxes as a means of encouraging jobs or investment. “I believe those corporate tax giveaways are not having any kind of effect in terms of job creation,” she said. Instead, the NDP would spend $400-million a year on tax credits that would be awarded to companies that hired new workers — up to $5,000 per employee.

Yet even Dalton McGuinty was converted to the wisdom of creating a more attractive climate for business when Ontario ended up in the top 10 of highest tax jurisdictions in the world. Since then he has introduced the harmonized sales tax and instituted changes to the total tax burden on new business investment that will see it cut in half between by 2018.

Ms. Horwath said that businesses have of late been hoarding the cash they save, rather than spending it on creating new jobs. But that reflects the uncertainty of the wider business climate. The overwhelming consensus is that cutting corporate taxes is good public policy and encourages investment. Capital is mobile and responds to falling or rising rates. As former TD Bank economist Don Drummond put it: “Theory and considerable evidence suggest corporate tax cuts deliver strong benefits to all Canadians.”

The NDP leader is on particularly shaky ground when she indulges in the politics of envy. “I don’t want to give tax breaks to companies for CEOs to use box seats at ball games. That’s not a good use of resources,” she said. The twin themes of the NDP campaign are affordability and jobs, yet it seems Ms. Horwath wants to make life more affordable for Ontarians at the expense of jobs — consumption over investment. People who say they want to create jobs should not hate people who really do create jobs.

The current provincial party platform seeks to pick up on many of the same kitchen table concerns that the late Jack Layton successfully pioneered in the federal campaign. Ms. Horwath says the party has benefitted from the outpouring of sympathy for Mr. Layton, but that she will not trade on his reputation. “Jack’s name comes up and we’re going to talk about him — we’re proud of him. But our team is focusing on our campaign for change that puts people first.”

Like the federal campaign, that plan looks to make life more affordable for Ontario voters. “If Ontario’s households are in good financial shape, then Ontario’s economy will follow,” the platform claims. Hence the plan to take the HST off electricity, home heating and gasoline. Under the NDP, transit fares would be frozen and gas prices capped. Building new nuclear facilities to expand the province’s generating capacity would be halted. A protectionist Buy Ontario program would be introduced, “making it law that Ontario’s money is spent here in Ontario.” Other laws would be amended to ensure resources mined in Ontario would be processed in the province. It’s all as if the Great Depression never happened — the NDP would have Ontario enveloped in a hermetically sealed economic bubble.

One wonders how much of this economic illiteracy Ms. Horwath would demand as the price for the party’s support if the Liberals won a minority government — or implement, saints preserve us, if she becomes premier. Stranger things have happened, such as in Ontario in 1990, when Bob Rae won the provincial election against all expectations.

Ms. Horwath says that Mr. Rae’s name comes up less often than it used to. “People are tired of history lessons. They want to look to the future, not dwell on the past,” she said.

Let’s hope not. A country without a memory is a country of madmen, said George Santayana. Voters would do well to remember what happened the last time they decided to take a chance on a fresh-faced, likeable NDP leader.

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Source: National Post