Charles Sousa targets Conservative government in economic update

Queen’s Park is launching a fiscal salvo on Prime Minister Stephen Harper’s Conservatives against the backdrop of a looming federal election.

Finance Minister Charles Sousa used Monday’s fall economic statement to remind Ontarians how much they contribute to the federation — and how relatively little they get back.

“It is critical that the federal government avoid further unilateral actions that hurt the people of Ontario and actions that put the province’s fiscal plan at risk,” Sousa told the legislature, according to a copy of his remarks provided to reporters.

“In many respects, the federal government collects a bucket of water from Ontario and returns a thimble. We need some more of that water to flow back to us,” the treasurer said.

“More of the money collected from Ontario should be invested in Ontario,” he said, stressing the province, which has a $12.5 billion deficit, still plans to balance the books in 2017-18 despite the lack of federal co-operation

“Ontarians contribute to federal coffers $11 billion more than they receive back. That gap amounts to $850 for every person in Ontario — or $3,400 per family of four.”

Mindful that Harper’s Conservatives are headed to the polls within the next 11 months — and must hold scores of Ontario seats to retain their majority — Sousa urged Ottawa “to match Ontario’s ($1-billion) investments in the Ring of Fire,” the massive chromite deposit in the north.

“We also call on the federal government to significantly increase its overall investments in infrastructure, such as public transit,” he said.

As disclosed Monday by the Star, Sousa hopes to find $700 million over four years by targeting tax cheats and clamping down on untaxed contraband tobacco.

“The underground economy will be forced above ground — and brought into the light,” the treasurer said.

“We are making sure that anyone who wants to do business with the Ontario government has paid their taxes before being awarded a government contract,” he said.

“We are improving the way government ministries and agencies share information so there can be better enforcement. We are taking further measures to address the supply of contraband tobacco. Fair is fair and these steps will help ensure that everyone plays by the rules.”

Sousa emphasized that there would be no tax increases as the Liberals scramble to get into the black.

“We are doing this by reviewing and transforming programs; managing compensation costs; ensuring everyone pays their fair share of taxes; and unlocking the value of provincial assets,” he said.

On that last point, Sousa said the government was embracing former TD Bank chair Ed Clark’s report Thursday that recommended selling off Hydro One’s distribution arm, revamping the Liquor Control Board of Ontario’s retailing operations and wringing more money from the privately owned Beer Store monopoly.

Clark said $2 billion to $3 billion in one-time money can be found from selling the Hydro One distribution assets and that more cash can come from getting The Beer Store, jointly operated owned by AB InBev, MolsonCoors and Sapporo, to pay a new franchise fee.

If the brewers balk — or try to pass along the costs to consumers in the form of higher beer prices — the government could strip them of their long-standing monopoly.

“Unlocking the value of those assets will help our economy grow while creating jobs and sustaining government services,” said Sousa.

“The additional revenue generated from public assets will help fund a new generation of public infrastructure,” he said.

“At the LCBO, we want consumers to have more choice, convenience and enhanced customer experience while providing greater returns for the province,”

Sousa said the government’s revenue projection for 2014-15 is $118.4 billion — $509 million lower than forecast due primarily to declining corporate tax revenues.

But that will not affect the deficit projections.

To find further savings, Treasury Board President Deb Matthews is “leading a careful review of every government program” to determine whether they are relevant, effective, efficient or sustainable.

Matthews has her work cut out for her — she will have to find $250 million in savings in 2014-15 and an additional $500 million annually in each of the subsequent two years.