McGuinty to keep health tax

Robert Benzie and Rob Ferguson, Queen's Park Bureau, Sep 07, 2007, Toronto Star

Ontario's controversial health tax – imposed after the Liberals broke their promise not to raise taxes four years ago – is here to stay, Premier Dalton McGuinty says.

As McGuinty unveiled his $14.7 billion re-election platform yesterday, he said the government could not afford to eliminate the levy of up to $900 a person, despite a long-standing pledge to review it in 2009.

"We will look at it, but right now, based on the very best projections available to us, we need every single penny of that premium," he told reporters.

"I'm being straight with people. The election's about to begin; they get to pass judgment on me. They get to make a choice."

Progressive Conservative Leader John Tory has promised to phase out the levy if he wins the Oct. 10 election. McGuinty introduced the tax months after pledging in the 2003 campaign that he would not raise taxes.

"I'm saying if you're looking to me to eliminate your health premium in 2009, don't look to me for that. I need that money. I need that money because cancer rates are going up in Ontario. I need that money because we are an aging population," the Liberal leader said.

Still, McGuinty repeatedly promised that there would be no new tax increases if he is re-elected.

NDP Leader Howard Hampton reminded voters of broken Liberal promises in 2003 to close all coal-fired electricity plants, freeze hydro rates and hold the line on taxes.

"Dalton McGuinty can say anything. People have to ask themselves if they can believe any of it," Hampton said after a speech to the Toronto Board of Trade outlining his plans to cut greenhouse gases.

Since the annual health premium was introduced in the 2004 budget, the Liberals have said it would be reviewed in 2009, implying it could be reduced or even eliminated.

Finance Minister Greg Sorbara reinforced that impression as recently as last week.

"I'm not going to prejudge what that review would come up with," Sorbara, also Liberal campaign chair, said Aug. 30.

The Conservatives, who have made phasing out the $2.6 billion annual tax a cornerstone of their election platform, have called it "the largest single tax increase in Ontario history."

"It is clear now his promise to review the health tax was bogus," Tory said yesterday at Queen's Park.

The revelation about the health tax overshadowed the release of the 44-page platform, entitled "Moving Forward Together," highlights of which had been leaked or announced earlier.

The platform contains 71 new promises targeting families, seniors, first-time homebuyers, and college and university undergraduate students.

If re-elected, the Liberals would give grants to seniors of up to $500 per household to help them cope with rising property taxes.

The $250 million program will be means tested so lower-income seniors would benefit most.

As reported in the Star yesterday, senior kindergarten would be expanded to a full day by 2009-10 and junior kindergarten would do likewise by 2010-11 at a cost of $500 million. That would open up 40,000 daycare spots in Ontario.

Overall, there's a boost to education of $3.1 billion annually by 2011.

To appease students concerned with rising tuition fees, the Liberals are promising $300 "textbook and technology grants" for every university and college undergraduate.

For first-time homebuyers, the existing land-transfer tax rebate would be expanded to include all homes, not just new houses and condos.

The Liberals hope this will help reduce urban sprawl by encouraging young people to buy existing homes in older neighbourhoods.

Health spending would increase $8.7 billion.

Like the 2003 platform, this one promises balanced budgets for the next four years – something the Liberals were unable to do annually in their first term because they inherited a hidden $5.6 billion deficit from the previous Conservative government.

The province currently has a budget surplus of $2.3 billion.

At $14.7 billion, the price tag for the Liberals' re-election platform is similar to the $14.1 billion Tory platform, although the latter does not include the cost of the elimination of the health tax.

The NDP has not yet released its full platform.