By Craig McInnes, Vancouver Sun
Ontario Premier Dalton McGuinty’s re-election campaign took a brief swing through Vancouver this week under the cover of a premiers’ meeting.
It started with a stroll through Stanley Park with David Suzuki, who warmly endorsed his government’s green plan, a renewable energy scheme his main opposition has promised to scrap.
McGuinty claims that green plan has vaulted Ontario past British Columbia to the forefront of action against climate change, an argument that he then turned, in the time-honoured Canadian tradition, into a complaint about the way his province is being shortchanged by Ottawa.
No doubt some of this will play well back in Ontario where McGuinty, who left the conference two days early on Thursday, faces an election this fall. But here, it was all a bit hard to swallow.
In case you missed it, despite having the second-highest average wages in Canada, Ontario is now officially a have-not province. This year – its third on the dole – it will get $2.2 billion, more than any other province except Quebec, which pockets more than half of the $14.7 billion handed out in the program designed to allow each province to offer roughly the same services, regardless of relative wealth.
Three years ago, before Ontario moved into the receiving end of equalization, McGuinty argued that the program should be scrapped.
“To speak of ‘have’ and ‘havenot’ provinces in 2008 makes no sense. We’re a nation of haves these days,” he said that May.
He still doesn’t like the term, but he has come to like the way equalization works, threatening to “flex our elbows and assert ourselves” if anyone tries to mess with Ontario’s entitlement.
Going into the first ministers’ meeting this week, McGuinty took the same blinkered, parochial view to energy policy, arguing that Ontario taxpayers have been subsidizing the oil industry for years so it’s only fair that the rest of Canada, through the taxes we send to Ottawa, should now be subsidizing the green energy business in Ontario.
That claim is so astounding it deserves to be taken down in steps, lest the weight of absurdity fall on some uninvolved bystander and cause grievous bodily harm.
First, it’s true that the oil and gas industry is subsidized through various tax and royalty incentives. McGuinty’s complaint is based on the notion that if the petroleum industry paid higher taxes, Ontario residents could pay less. The point of the subsidies, however, is to encourage investments that wouldn’t otherwise be made. In spite of the subsidies, the oil and gas business generates billions of dollars in revenues that reduce the amount of taxes that all Canadians, including those who live in Ontario, have to pay.
McGuinty should be familiar with that principle, since his province has paid billions in subsidies to the auto industry over the past few decades to maintain that business with the jobs and the tax revenue it generates for Queen’s Park.
Ontario’s green plan is set up on the same principle. The government is offering lavish subsidies in the form of a premium price for the electricity they generate from renewable sources to companies that are willing to invest in the province.
The Liberals say the strategy is working, creating thousands of jobs and allowing Ontario to move toward shutting down the coal plants that still produce a significant portion of electricity consumed in the province. The opposition says it’s an expensive failure that is burdening consumers now without ensuring sufficient generating capacity for the future.
The largest source of electricity is still nuclear energy, an industry that a study done nine years ago estimated had already been given the equivalent of $17 billion in subsidies from the federal government.
So is this a province that British Columbians, Albertans and other Canadian taxpayers should be subsidizing more than we are already?
On a per-capita basis, Ontario is already getting more in total transfers from Ottawa than the provinces with an oil and gas industry, 12 per cent more than British Columbia and Saskatchewan, and 45 per cent more than Alberta.