Why is Doug Ford promising to send a $200 payment to every Ontarian? To put it bluntly, because he can.
Ford made official what had been reported weeks ago that the fall economic statement will include a tax rebate — “Dougie Dollars” if you will.
“We’re able to provide the relief because inflation has increased provincial sales tax revenues and because of the federal government’s recent changes to their capital gains tax,” Ford said.
To give you an example of how inflation has increased the government’s sales tax revenues, in fiscal year 2019-20, the first full year of the Ford government, sales tax revenue stood at $28.6 billion. In 2021-22, before inflation took off, that sales tax revenue had grown to $30.4 billion, but by the end of March the government was taking in $39.9 billion.
That’s an increase of 39.5% in four years just on the sales tax.
Part of this is driven by inflation, part of this is also driven by Ontario’s incredible population growth. Ford said rather than hang onto the extra cash, he wants to give it back to taxpayers.
Leaders of all three opposition parties at Queen’s Park said that rather than give the money back to taxpayers, Ford should be investing in health care or education. Ford said that his government can do both.
“It’s not either/or keep costs down or invest in social programs; it’s and. We can and are doing both,” Ford said.
Since Ford took office, health spending has increased 34.2% from $63.7 billion in 2019-20 to $85.5 billion in the last fiscal year and you can bet there will be increases announced on Wednesday. Basically, the Ford government has more money than they can spend and rather than invent new programs, they’re sending money back to you.
A family of two parents and two kids will get $800 in Dougie Dollars by the end of January, just as Christmas credit card bills are coming due. You can call this crass electioneering, you can claim Ford is bribing taxpayers with their own money, but people like getting money.
“I think a lot of people are struggling right now, but a one-time payment right before an election isn’t going to solve the affordability crisis for Ontarians,” said NDP Leader Marit Stiles.
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The leader of the Official Opposition said that while few people would say no to getting an extra $200, it won’t help them pay rent, find a family doctor or deal with the tent cities.
“This is a government that is out of ideas, out of gas and, I think, out of time,” Stiles said.
Liberal Leader Bonnie Crombie said that she will be donating her cheque to the Ontario Liberal Party to gear up for the next election. In fact, Crombie said these payments are all about the next election.
“The premier is attempting to bribe Ontarians with their own money. This is taxpayers’ money. What Liberals would do was we would create a middle-income tax cut,” Crombie said.
So why isn’t the Ford government doing an across-the-board income tax cut like they promised instead of this one-off payment? The answer appears to be two-fold with one part relating to politics and the other part relating to the economy.
“Tax cuts don’t sell,” said one senior Tory when asked why they aren’t just cutting taxes.
There are plenty of past governments that could attest to that idea: You don’t get any political benefit from a tax cut in the second year.
The second reason is more practical.
We are in an uncertain economic time and while this windfall is here this year, it may not be here next year. If the economy sours and the government has just cut tax rates, that could hurt provincial coffers long term.
Ford is taking the gamble that voter won’t mind an extra $200 for every person in their household and that any complaints by the opposition will soon be forgotten once the cheques clear.