06) REVENUE CUTS CAUSE DEFICITS

 

People's Voice Editorial

 

    Now that Ontario voters have rejected the far right drive to slash public programs even further, the big corporations have stepped up the pressure to cut spending to the bone, and even to amputate. A set of briefing notes from the Ontario Council of Hospital Unions reveals that the problem with government finances is actually revenue slashing.

 

    Ontario has both the lowest public spending and the lowest revenue of all the provinces on a per capita basis, even though most other provinces are relatively poorer. This is nothing new. Statistics Canada data for 2009 (the last year available) indicates that Ontario had the lowest per capita revenue at that time, by a large margin. The data also indicates that Ontario's "own source" revenue (excluding federal transfers) was 14.4% of Gross Domestic Product, far less than the average 17.9% of all the provinces.

 

    The briefing notes calculate that if Ontario had taken in the same revenue as the rest of Canada, the treasury would have received an extra $19.5 billion in 2009, and similar amounts every succeeding year. But since the Wynne Liberal government is not likely to increase taxes on corporations and the wealthy, Ontario working people will be stuck with the real spending cuts which are on the way, especially if the government keeps to its plan to balance the budget by 2017/18. With inflation in Ontario running at 3% annually, workers in the public sector face years of pay increases at well below that level.

 

    The picture is similar across Canada. In British Columbia, the massive tax cuts for the rich and the corporations granted by the Campbell government back in 2002 continue to cost the provincial treasury over $2 billion every year. The next time you hear politicians and corporate media call for austerity, remember that the economic elite are receiving the biggest handout in Canada's history - an endless "gravy train" for the rich.

(The above article is from the August 1-31, 2014, issue of People's Voice, Canada's leading socialist newspaper. Articles can be reprinted free if the source is credited. Subscription rates in Canada: $30/year, or $15 low income rate; for U.S. readers - $45 US per year; other overseas readers - $45 US or $50 CDN per year. Send to People's Voice, c/o PV Business Manager, 706 Clark Drive, Vancouver, BC, V5L 3J1.)