If Doug Ford’s PC Party starts running ads claiming Bonnie Crombie wants to hike taxes and give people money to sit at home, it will be her own fault.
Crombie gave a wide-ranging interview on TVO’s ONPoli podcast last week and it’s filled with the kind of statements that her political opponents will pounce on.
In her interview, hosts Steve Paikin and John Michael McGrath asked Crombie about her position on a number of provincial policies. It’s her statements in favour of bringing back the Universal Basic Income program and increasing the provincial sales tax to give municipalities more money that will catch the attention – and likely ad dollars — of the PC Party.
“Do we give them the suite of tools? Do we look at a provincial-wide new tool like an RST?” Crombie asked when questioned about providing more funding to municipalities.
Crombie called the provincial sales tax an RST, or retail sales tax. Of course, the province’s sales tax is harmonized with the federal GST and is charged on a wide range of goods and services.
Last year, the tax brought in more than $36 billion to the provincial treasury, second only to personal income tax in terms of funds generated. The tax accounted for 26% of the province’s tax revenue and 19% of total revenue according to the recently released public accounts.
If the province were to simply give municipalities 1% of the existing sales tax revenue that would cost the treasury more than $4.5 billion that is currently being spent elsewhere. That means for this idea to work, Ontario’s portion of the HST would need to increase from 8% to 9% and the total HST charged across the province would need to increase from 13% to 14%.
Given how unpopular the GST remains more than 30 years after it was introduced, it’s doubtful most voters would be enthusiastic about an increase to the tax rate.
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To be clear, Crombie didn’t come right out and say she supports the idea but did muse about supporting it. That will be enough for Ford, who already is trying to portray Crombie as a tax-and-spend Liberal, to pounce on.
Added to the comments she made to the Empire Club a few months ago about bringing back licence plate sticker renewal fees and hiking gas taxes and there is a pattern of Crombie talking about increasing taxes.
“I’ve been thinking about what exactly the government is spending money on other than gimmicks and freezing the gas tax and giving you back a rebate for your stickers and making them so you don’t have to pay for them and that’s really reducing the fiscal capacity,” Crombie said back in April.
“And I keep thinking, would people really miss that? Or is that money that could be better invested in education and our health care system?”
In her TVO interview, Crombie was asked about the Liberal government of Kathleen Wynne and its program to pilot a Universal Basic Income program. That program offered a subsidy of $17,000 per year for people, even those who could work but simply chose not to.
“I think it’s a great idea, and I think it would save taxpayers money,” Crombie told TVO.
The idea behind UBI, as put forward by economists like Milton Friedman, is that governments replace all welfare programs with one single payment. In theory, they say, this should save governments money and increase payment for those who can’t support themselves.
In practice, the Wynne government offered this subsidy on top of every other existing Ontario social program and included people who could work but chose not to.
As I profiled back in 2018 when the program was cancelled, this included a Hamilton man who used his economics degree to get a full-time job at a bank but then quit to go on the UBI program to practice breathing exercises and create art.
UBI is one of those concepts, like communism, that people think will work in theory, but it never really plays out.
By endorsing that concept, while also musing about increasing taxes paid by those who do work, Crombie is setting herself up to be a political pinata for Ford.