Ontario Government and Privatization

Ontario’s leader, Kathleen Wynne, had an option a short while ago with respect to raising badly needed funds following the pseudo-Friedmanesque program of slashing corporate taxes.

There are many assets that Ontario could sell off, but the focus is increasingly on Ontario Hydro and potentially the LCBO.

The decision to sell off Ontario Hydro was a financially prudent one in that it shoved all of the bloated debt from nuclear days away from the liability of the Ontario government.  This move helped bring the private sector on board for managing and controlling this debt.

Ontario Hydro is also, in a very rudimentary sense, a single company that used to be owned by the public.  While there were many contractors that were beneficiaries of massive public spend (Enbridge, GE, Samsung to name a few), the company was at its very core a public company.  I’ll get to this in a sec.

However, it was not politically expedient and will prove to be Wynne’s downfall in the next election.  At a recent event, she was booed by the public.  This kind of show of disgust with a leader only boils over when the entire public has had enough of bad management.

But that won’t stop Wynne from ‘converting’ the public of Ontario to hydro through a series of ill-conceived plans that will only benefit a few bankers, car manufacturers and private citizens.

She won’t stop until we’re all complete indentured servants to a massive transfer of wealth from the hands of the people of Ontario to a select few.  Bills will increase, companies will leave and we’ll be left destitute.

This decision will prove to be a disastrous one.

On the other hand, the LCBO should be privatized.  What they are doing now borders on corrupt and again ill-conceived because they’re transferring the ability to generate cash-flow from alcohol sales to a select few like the Westons (Loblaws) and Walmart.

Instead, they should have proceeded with a ‘anyone can get a license’ approach that would have truly liberated the market and been of benefit to the hundreds of new craft producers of wine, spirits and beer in Ontario.

Also, the LCBO is nothing but a massive front for a small handful of companies such as Constellation Brands, AB InBev and such who use the LCBO to eliminate any competition.

Privatization is something that we should all consider as residents of Ontario, but the public has a right to know why so many bad decisions and hair-brained schemes are being pursued by our current leader.

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Wynne’s Losing Power Play

Kathleen Wynne’s days as a politician and leader of Ontario are numbered.

She’s ruling on borrowed time.

The ‘power play’ that Kathleen Wynne is pursuing is killing the prospects of Liberals in Ontario.  Come time for the next election, she will lose.

At the root of the issue is electricity.  Rates in Ontario have increased substantially for the last 20 years and will continue to increase.

We are SELLING electricity to the US and other neighbours while the people of Ontario are being lead to believe that new initiatives to increase our reliance on electricity should be bought into and supported.

Ontario Hydro should NEVER have been sold off, despite the crippling load of debt that exists with the company.  Ontario should have privatized the LCBO instead.

The recent ‘carbon’ plan subsidizes car manufacturers, not people who invest in electrical independence, gained by solar, wine, geothermal and other renewable forms of energy that help us get ‘off the grid’.

She is gambling that people will continue to demand electricity and will allow themselves to be handcuffed to an electrical system and network that will fail enormously, both in terms of addressing the needs of consumers, but also the businesses that rely on electricity for our manufacturing infrastructure.

Paying out a few bucks to rural customers is a joke.

Wynne’s power play will lead to her political demise.

The problem:  who’s a suitable leader to challenge her?

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Will We Let This Man Put An End To Canadian Health Care?

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Press Progress did a fine job of reviewing 13 things to know about the people trying to kill Canadian health care.

You need to read this if you’re at all interested in the Canadian health care system.

Over-billing?

Under audit?

It sounds like Dr. Brian Day is the Donald Trump of Canada’s health care system.

Now, I’m not going to pretend the system is perfect.  We still have hundreds of private companies soaking up hundreds of billions of taxpayer dollars in the form of pharmaceuticals, hardware and other services we don’t need or that we should deliver by the public, for the public, but it’s better than getting shafted by the profit margin when you’re experiencing chest pains or in need of a appendectomy.

Also, it sheds a light on the absurdity of our tax system when a couple of organizations like the Canadian Taxpayers Federation, the Fraser Institute and the Canadian Constitution Foundation.

These organizations need to be audited by the Canada Revenue Agency and ideally shut down for using taxpayer dollars for political agendas.

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Ontario Libs Have Tax Policy All Wrong

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This story about how the Ontario Liberals will raise taxes in smaller municipalities has me on the defensive, especially given that I live in one of these ‘smaller’ communities.

The suggestion is that smaller municipalities need to find ways to support various expansion and infrastructure programs.  On the surface, this is a laudable objective, but it represents a very ‘Torontonian’ view of the rest of the province.

It suggests that everyone needs to find ways to generate more revenue when there’s no revenue to be had, while Toronto goes unscathed.

(Granted, I’m fully aware of the ‘unique’ taxing authority of the City of Toronto, which it does use from time to time).

The real answer to the problem is quite obvious:  tax Toronto.

Don’t be fooled by those that can’t count or who are blind to the real economic situation when comparing actual property taxes.  This does not matter, given the disproportionate differences in actual house prices.

On a ‘mille rate’ basis, Torontonians pay one of the lowest municipal tax rates – in the country!  Vancouver leads the way, which is why their market is hyper-inflated and the province has had to introduce a special real estate transaction tax on foreigners.

Toronto’s mille rate is a meager 0.85 per $1,000 in assessed value.  Timmins is nearly 2.2.  Ottawa looks to be the lowest at just 0.79 (but they’ve got the Capital Commission paying for a lot of activities, so this makes sense).  The average is just a little over 1.00.

Raising Toronto’s mille rate to the average would net hundreds of millions in revenue for the City of Toronto per year.  Instead, Toronto has actually been reducing it’s mille rate.  This is partly because of the provincial leadership’s view of Ontario as Toronto first and the rest, well, myeh.

Be it a higher property tax (what I would prefer), better current assessments of Toronto properties or real estate transaction tax (more politically expedient), the answer should be obvious to everyone, including those in Toronto.

Forcing the City of Toronto to raise their property tax rates would have many positive effects for the province on a whole:

  1. It would end the real estate madness that’s taking place there now
  2. It would transfer economic and growth benefits to the rest of the province, by virtue of the fact that people will leave and set up shop elsewhere
  3. It would ensure that the books are balanced in Toronto, ending the annual ‘palms out’ process that takes place every budget season.
  4. The City of Toronto would finally be able to afford the serious infrastructure that it needs to support the volume of people that have moved into town in recent years – mainly to benefit from absurdly low property tax rates.

Higher regional / rural property taxes are not the answer to Ontario’s tax issues.  Cutting spending is the answer, followed by more realistic taxes on Toronto.

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Want Cheaper/Better Hip Tickets? Change The Tax Law

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Over the last few months, a significant amount of ‘ink’ has been spilled concerning the unfortunate health of Gord Downie, lead singer of the Tragically Hip, the band’s last Canadian tour and the subsequent resulting lack of reasonably-priced tickets for fans.

I checked our local venue and prices have been bid up anywhere from 4 to 20 times a normal price that might have been charged for the Hip just a couple of years ago.

I love the HIp, but it’s hard to stomach spending $500 or $1,000 on a night out to enjoy a band that I’ve seen at least half a dozen times.

But I know who WILL be seeing the Hip:  the corporate types with lots of tickets available for clients from box seats to front-row gawking opportunities and everything in between.

How does this happen?

The deduction of entertainment expenses for corporate tax returns.

Every year, any company can deduct 50% of any expenses related to entertainment of clients.  This includes box seats and other tickets for sporting and music events, along with other events related to entertainment (dining, wine, etc etc etc).

There’s even a suggestion that there’s a substantial amount of fraud concerning these expenses, including inflation of the costs, inclusion of additional ‘guests’ for events and so on.

Closing the loopholes themselves in this deduction would generate an estimated $400 million per year, but this doesn’t include the impact of the deduction itself.

I couldn’t find any studies that assess the impact of the tax deduction on general revenue.  That’s likely because no one wants one.  Of course, if you know of a study, please let me know.

That said, it’s safe to say that when Canada’s economy is worth $1.5 trillion per year in economic activity, even if entertainment was worth 1% of this amount, it would be worth $15 billion per year.

And a good chunk of that $15 billion per year is being written off by Lexus lawyers and Beemer punks looking for a good show.

That’s a lot of inflated value when it comes to the cost of tickets, driving them into the stratosphere.

So … if you really want to bitch about the high cost of Tragically Hip tickets, look to the cause, not the tools like Tickermaster and Stubhub.

And then do something about:  insist that our government put an end to the entertainment tax deduction.

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