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(Updated)
The province’s projections when it comes to cash flow didn’t pan out.
Finance Minister Charles Sousa delivered the fall economic statement Monday featuring a half a billion dollar shortfall. That has opposition parties skeptical about the government’s ability to balance the budget by 2018.
Revenues are down in Ontario — even since the last projection just in July. But Charles Sousa believes he can shake more money out of people who try to break the law: “Fair is fair and these measures will ensure everyone plays by the rules.”
The finance minister says he can still eliminate the $12.5 billion deficit. For one, by cracking down on illegal cigarettes. Not the controversial smoke shacks on provincial land, but the distributors who sell tobacco at cut rate prices from the backs of trucks.
Sousa: “We’re not going onto the reserve. We want to respect First Nations.”
He also wants to go after those who don’t pay taxes. Like home renovators paid cash under the table: “We anticipate 700 million more.”
Charles Sousa admits these are revenue sources that other governments have tried to tap: “Just because it’s been looked at before doesn’t mean I’m not going to act on it now.
NDP Finance Critic Catherine Fife: “It’s like groundhog day on contraband tobacco. There’s no clear plan to pull out the money. This is a distraction from the lost revenue.”
Opposition members wonder why the government’s revenue is half a billion dollars less than projected in the budget, presented just four months ago.
PC Finance Critic Vic Fedeli: “Instead of tackling the problem, they look for nickles and dimes in the couch and look at how to dip their hand in your pocket even deeper.”
The finance minister spent some time criticizing the federal government for withholding money. He says Ottawa collects a bucketful from Ontario but delivers a thimbleful. However, we also heard from the opposition that federal transfer payments to Ontario are up.
We’re going to bring you more now on the province’s fall economic statement. The Liberal government remains confident it can eliminate a $12.5 billion dollar deficit in three years even though revenues are off by more than half a billion dollars.
Finance Minister Charles Sousa joined Nick Dixon live to talk more about the economic statement and addressed these questions.
First, we would want to ask you about the lost revenues. Why did we come up half a billion dollars short of estimates? And if you fall short again, will the Liberal government raise taxes?
Next, you say the government will go after the underground economy. Do you have a sense of how many companies aren’t charging taxes, how much money you’re missing out on, and how you can really get them to first charge the taxes and then pay the province.
The government is also going to crack down on illegal cigarettes. And that contraband tobacco, accounts for up to 40% of the cigarettes sold in the province. But at the same time the province is trying to get people to quit. The government spends money on campaigns, health programs, there’s more smoking restrictions coming in the new year. So on one hand, you’re spending money to get people to quit, while on the other, you’re trying to get more money from smokers. Is relying on cigarettes a viable plan to help balance the books?
You say Ontario is not getting enough from the federal government. So can you take us behind the scenes when you raise the issue of the inequity in transfer payments with Ottawa. What are you hearing in return?
Your federal counterpart Joe Oliver says after 11 years in office, it’s time for the Ontario government to take responsibility for its economic management. Do you agree with that statement?
I know you’ve really just began this term, but where do you see the province in 4 years and where do you want Ontario’s economy to be in 2018?
