Too Little, Too Late

Premier McGuinty has pledged to relieve Ontario municipalities of $1 billion in disability-support payments and prescription-drug benefits if his government is re-elected. Municipalities will continue to pay for a further $3 billion of provincial social-service programs.

During the Great Depression, Canada’s patchwork system of municipal relief proved totally inadequate. Subsequently, provincial governments established social-welfare programs and uploaded unemployment insurance to the federal government. Under Mike Harris, Ontario reverted to the 1930s model of municipalities financing social welfare.

McGuinty’s promise is a small step back in the right direction (or left direction?). However, it is not as though he uploaded $1 billion in his first term and is promising to upload the remaining $3 billion if re-elected. Instead, after having done almost nothing to strengthen municipal finances, he is now promising to do very little. One doubts whether McGuinty would be making even this minimal promise were he not bleeding support to the NDP.

In the Toronto Star, Nelson Wiseman characterizes the NDP’s more generous proposal for municipal financing as the unrealistic promise of a party that will never be in power. The fact that other provincial governments directly finance social services goes unmentioned. It is not unrealistic to propose that Ontario, one of the richer provinces, could finance all provincial social services from the provincial tax base.

What’s needed is the political will to raise somewhat more provincial revenue through progressive income taxes, which are substantially lower in Ontario than in most other provinces.

UPDATE (August 21): My hat goes off to The Star. Today’s report notes that “Ontario is the only province that uses [municipal] property taxes to partly fund provincial social and health services.”