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The Ontario Liberal budget is in... TAX HIKES FOR ALL!
Liberals bring back health premium
A solemn Liberal election pledge to freeze taxes and balance Ontario's books was shunted aside today in a provincial budget that taps taxpayers for $9 billion over four years to finance a spending spree on everything from heart surgeries and hip replacements to home care and health centres.
An annual Ontario health "premium" will start coming off paycheques this summer, costing taxpayers between $300 and $900 a year depending on income, Finance Minister Greg Sorbara said as he delivered the government's all-important first budget.
The cost of cigarettes, alcohol and driver's licence renewals will also go up as part of the seven-month-old government's plan to inject billions into health and public education - what Sorbara described as more important priorities.
Sorbara was frank about the decision to abandon what observers have described as a cornerstone of the successful Liberal election campaign: a promise to leave taxes alone and eliminate the deficit in their first year.
It was either that or do what Ontario voters really wanted, he said: restore the fiscal fitness of the province's hospitals, clinics and classrooms.
"It's the reality of the work that we do," Sorbara said before his speech, insisting Ontario voters are prepared to give the Liberals the benefit of the doubt.
"I think our credibility, as we move towards enhancing the quality of public services, will only increase. I'm aware of the commitment; we're not able to keep the commitment."
Smokers will pay $2.50 more per carton of cigarettes starting Wednesday, while the cost of a bottle of wine will climb 15 cents and a case of beer 45 cents June 21. Together, both measures will generate $135 million for provincial coffers this year.
But it was the health premium scheme - worth $1.63 billion in the first year, climbing to $2.6 billion by 2008, and dedicated to paying for $4.8 billion in additional health-care spending over the next four years - that raised the hackles of political critics.
"I think this is the most regressive tax in Ontario history," said New Democrat Leader Howard Hampton. "This is a tax which will hit every modest and middle-income family. The government is literally picking the pockets of the wrong people."
The budget also forecasts a $2.2-billion deficit this year and lays out a plan to eliminate it by 2008 - a far cry from Premier Dalton McGuinty's controversial pledge during last fall's election campaign to balance the budget in the government's first year.
Running multi-year deficits and raising revenue are "choices that are inconsistent with our election commitments; we openly acknowledge that," Sorbara said in his speech.
"However, it would simply not be possible to deliver a balanced budget this year without destabilizing vital public services and perhaps even the economy itself. Such an approach would be irresponsible, and we reject it."
Conservative Leader Ernie Eves, who suffered a resounding defeat at the hands of the Liberals in October, could barely contain his contempt.
"Welcome to the new reality," the former premier sneered. "I guess the plan for change was all about changing the plan."
The cost of renewing a driver's licence in Ontario will also increase to $75 from $50, while reinstating a suspended licence will cost $150, up from $100. A host of small-claims court costs and fees will also be higher.
A $3.9-billion windfall resulting from the government's decision to lift the Conservative cap on hydro rates will be applied directly against the $6.1-billion deficit in the current fiscal year. From there, it falls to $2.1 billion next year and $1.5 billion the next before disappearing in 2008.
Hampton dismissed the plan as creative accounting and accused the government of using "the worst kind of Nortel tactics, the worst kind of Enron tactics" to shrink the deficit.
Chickenpox, meningitis and pneumonia vaccinations will also be available to Ontario children at a cost to taxpayers of $156 million over three years - roughly what the government will save by ending public health plan coverage for routine eye exams, chiropractic services and physiotherapy services offered outside hospitals and long-term care facilities.
Education reaped a somewhat smaller windfall in Tuesday's budget, including a four-year plan to spend $2.1 billion on shrinking class sizes, hiring 1,000 more teachers, improving numeracy and literacy rates and providing stable funding to school boards.
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Nathan Fake - Outhouse (Valentino Kanzyani Remix) 
