(The following article is from the April 16-30, 2008 issue of People's Voice, Canada's leading communist newspaper. Articles can be reprinted free if the source is credited. Subscription rates in Canada: $25/year, or $12 low income rate; for U.S. readers - $25 US per year; other overseas readers - $25 US or $35 CDN per year. Send to: People's Voice, c/o PV Business Manager, 133 Herkimer St. Unit 502, Hamilton, ON, L8P 2H3.)

By Liz Rowley

The Ontario Liberals delivered their budget March 25, taking to heart Federal Finance Minister Flaherty's dire warnings that corporations need more tax cuts. The budget delivered $750 million more in corporate tax cuts, on top of $1.1 billion promised last year.  

     The breaks include a retroactive Capital Tax cut for manufacturers and the resource sector back to January 1, 2007; increased capital cost allowances on machinery and equipment; a 4 year rate cut to the Business Education Tax in northern Ontario (capped at 1.6%). Forestry companies got a reduction in stumpage rates. Mining companies got some help with mapping, exploration and development for their new "gold rush" in Ontario's north.

     But Aboriginal Peoples got nothing in terms of resolving outstanding land claims. Many of their current struggles are against mining and logging companies which the government is supporting with tax cuts and its Ontario Mineral Development Strategy. No funds are in the budget to address the shocking poverty and misery on reserves or in Ontario cities, although there is a new casino revenue sharing agreement.

     Instead the government is trumpeting "new investments" in health, education and job training. But the social spending is pitiful, one-time only drops in the bucket in almost every area. In most areas of social spending, the situation will actually be worse after this budget is implemented than in 2003 when the Liberals defeated the Harris Tories.

     For example, the measures to combat poverty include a 2% increase in the ODSP and social assistance rates; a increase in the minimum wage to $8.75; funds for child care spaces; funds for retraining the unemployed and for new apprenticeships; funds for school nutrition and dental-care for the poor.  

     Sounds good until you pull it apart. The 2% increase in ODSP and welfare is less than inflation, and follows a 40% cut in a recipient's purchasing power since the Harris cuts of 22% twelve years ago. In other words, recipients are worse off every year. Similarly, the new $8.75 minimum wage actually buys less than the $3 minimum wage in 1970.

     The funds for child care spaces were committed years ago in the cancelled national child care plan. There is no new provincial money for desperately needed spaces. Not a single nickel is budgeted to pay out $78 million owing for 2006-07, and $467.9 million owing for 2008-11, to 100,000 Ontario women in pay equity settlements. Many of these women are child care workers.

     Retraining funds will send 20,000 laid-off workers to school, ignoring 180,000 others laid-off since the Liberals took office. What about their families and their futures? Some of the 20,000 lucky ones will get part of the funds for training - but not skilled trades' apprenticeships. For the McGuinty government, apprenticeships mean cheap labour in a service sector economy, including call centres and fast food restaurants.

     On long-term health care, 2500 personal support care workers will be hired, but the need is ten times that number. Soiled diapers will remain a staple of long-term care facilities in the province.

     The $100 million for social housing renovation is also a drop in the bucket. The City of Toronto alone has a maintenance backlog in excess of $300 million.

     Funding for hospitals has not increased; the 75 hospitals currently running operating deficits will rise to 104 by 2009. Ontario's balanced budget legislation will ensure deep cuts delivered by local hospital authorities, not the province directly.

     The Liberal failure to bring in a new education funding formula leaves school boards in the same position as hospital boards, obliged to balance budgets with deeper and broader cuts. Deregulating tuition will encourage universities and colleges to solve their financial shortfalls by increasing student fees.

     This will be a year of big public sector negotiations, but there are no funds for bargaining - only the codicil that public sector unions must respect the public purse.

     Funds budgeted for roads and provincial infrastructure will all go to "public private partnerships" which the Liberals promised to dissolve in 2003. This government has stepped up the privatization of social services, child care, senior care, health care, and public and post-secondary education - both the "bricks and mortar" and the delivery of service.

     The budget was delivered with all the smoke and mirrors available to the provincial Liberals, who are desperate to convince electors that "all is well." They know the coming recession will be unlike anything since the 1930s. TD Bank economist Don Drummond says the recession will hit Ontario so hard this year that it will push the whole country into recession by 2009.

     A lot of people are going to lose their jobs, their homes, and their security because of neoliberal policies and budgets like this one, which allow the corporations to plunder the province while workers and the unemployed see their future go up in smoke.