COLUMN

The scary policies of Ontario’s socialists

Premier Bob Rae persists with a platform based on a meanspirited view of business that imperils our living standards

DIANE FRANCIS June 3 1991
COLUMN

The scary policies of Ontario’s socialists

Premier Bob Rae persists with a platform based on a meanspirited view of business that imperils our living standards

DIANE FRANCIS June 3 1991

The scary policies of Ontario’s socialists

Premier Bob Rae persists with a platform based on a meanspirited view of business that imperils our living standards

DIANE FRANCIS

COLUMN

Ontario’s socialists are turning out to be the nightmare so many feared. Largely a collection of public servants, professional politicians and unionists who have never met a payroll, the NDP cabinet is faithful to a naïVe and destructive ideology. Ontario’s socialists are anti-business at a time when Canada needs to encourage enterprise.

Their recent budget proposes to hike spending this year by 11.9 per cent and to impose new taxes and huge deficits at a time when Canada needs to tighten its belt and get its economic house in order. By 1995, Ontario’s debt will soar to $77 billion ($7,964 per capita) from its current $42 billion ($4,344 per capita), according to NDP estimates. Not surprisingly, this has resulted in the province losing its triple-A credit rating and will result in new taxes on Ontario’s businesses and its 9.7 million residents. The province’s budget also imposes indirect taxes on all Canadians by contributing to a higher national inflation rate, which will make interest rates higher than they otherwise would have been.

Already, NDP Premier Bob Rae’s socialism is causing capital to leave or avoid the province. Businessmen are pulling up stakes or postponing expansions. But worse than economic damage, Rae’s policies will drive more of a wedge between Ontario, Ottawa, Quebec and the West, at a time when unity is threatened.

Ontario government policies are clearly out of step with those of other jurisdictions. For instance, the controversial Allaire report on amending Canada’s Constitution, which was adopted by Quebec’s ruling Liberal party, clearly explains why change is needed. “Canada,” it says, “is undermined by many structural problems—an uncompetitive tax burden, inadequate efforts to expand foreign markets, the poor prospects for the development of Canada’s natural resources sector—not to mention that the productivity growth of Canadian businesses is among the lowest of all industrialized countries, while labor-related costs and the

cost of capital are among the highest.”

By contrast, Ontario’s socialists would make labor costs even higher by increasing the minimum wage by nearly 50 per cent. Employment-equity policies and proposals to extend union powers would also result in higher wages. By hobbling business with higher overheads and taxes, Ontario’s socialists would force Canadian companies to leave the country. They ignore Quebec’s concern about inadequate resource development by imposing a new tax on mines as well as promising an environmental bill of rights that could render uneconomical many operations.

Worst of all, Ontario’s socialists add to the problem of high capital costs by tabling an inflationary budget, which lowers the province’s credit rating, thus forcing Ontario taxpayers to pay higher interest rates on provincial borrowing to cover the province’s increasing debt. None of it makes any sense whatsoever and will further alienate Quebec and the West.

Socialist apologists pooh-pooh fears that capital, businesses and entrepreneurs will flee. They point out how “reasonable” the NDP was by “allowing” the takeover of Ontario’s largest natural-gas utility, Consumers’ Gas, by for-

eign-owned British Gas. Socialist supporters also point to Rae's councils and mini-commissions designed to solicit policy viewpoints from across the ideological spectrum. They say that evidence of Rae’s moderation is that extreme elements of the NDP are upset at the government’s failure to introduce minimum corporate taxes, death duties and the scrapping of Ontario’s nuclear program, to name just a few. Instead, they proffer, Rae is distancing himself from some of these promises.

But the telltale signs of socialism, with its dislike and envy of wealth creation, are everywhere. After Rae assumed power in September of last year, he ordered any cabinet minister who owns a rental property to sell. Why not merely force them to disclose their ownerships to avoid conflicts? Is Rae declaring ownership a crime? Is capital accumulation a crime? Are landlords somehow doing something immoral?

The next glimpse into the NDP’s hatred towards business came in its proposal to protect workers in the event of bankruptcies. While worker protection is a worthy idea, the NDP'S proposed law would make officers (as well as owners or directors) personally liable to pay up to six months’ severance to workers, even if the company goes bust. Lurking behind this is socialist logic that blame can be attached to any failure. Ironically, anyone who understands business knows that failures are caused by factors such as high taxes, high labor costs and high interest rates that regimes like Rae’s impose. Failures also result from stiff competition, wary bankers, lack of innovation, collapsed stock prices, inept workers or implacably greedy unions. Why shouldn’t the NDP’s legislation also nail greedy unions or indolent workers, especially in cases where they share the blame?

By far the most dramatic manifestation of the socialist vision is contained in some of the government’s changes to Ontario’s welfare system. Among the highlights: benefits can be paid to recipients even if they own two properties, and recipients are now required to take only “suitable” employment rather than any job that might be available. Already, welfare benefits are far too rich in Ontario, yielding a tax-free income to a breadwinner with three dependants of up to $22,968 annually. This is more than many employed people end up with after paying their taxes, unemployment insurance premiums, Canada Pension Plan contributions and other costs associated with work. Benefits are so rich that, for some, they remove the incentive to work.

Although duly elected, the NDP’s “new democracy” isn’t very democratic. The socialists do not, in my opinion, have a mandate to impose draconian policies. They won because Ontario voters rejected the Liberals and Tories last fall. Even so, Rae persists with a destructive platform based on a meanspirited view of business that imperils our living standards. And while I’m the first to agree that governments must protect the public from unfettered capitalism because it can lead to the exploitation of man by man, everyone must realize that socialism leads to the exact opposite—government exploiting the individual.