Wednesday, January 29, 2014

How does Wynne’s loading of social costs onto businesses bring jobs back to Ontario?

The Liberal premier of Ontario seems determined to load social costs onto the backs of our job creators. Ontario has shed jobs in the tens of thousands in recent years, but still the premier insists on making it more expensive for businesses to operate in the province, and employ workers—a strategy that not only won’t bring jobs back to the province, but will most likely cost us many more jobs in the future.

Firstly, there are electricity rates, which have been forced up more for social than economic reasons. Most recently, we heard of a billion-dollar mismanagement paid for by Hydro ratepayers. Why should hydro ratepayers be forced to shoulder the costs for an ineffective government put in place by voters at large? These should be classified as social costs to be borne by all taxpayers.

Earlier, there was the gas plant fiasco in the GTA, which had to do with winning a general election. The additional costs, which may go over $1-billion, are social costs not true costs of generating and delivering energy.

And earlier still was former Liberal Premier Dalton McGuinty’s wrong-headed Green Energy and Economy Act, which delivers sweet deals to Samsung and others for solar and wind power using massive subsidies—paid by ratepayers. This initiative is all to do with social policy (i.e., “greening” Ontario’s economy) and was implemented as a sop to left-wing environmentalists.

Secondly, we have a proposal by Premier Kathleen Wynne’s government to raise the minimum wage, and to bake in the inflationary nature of regular future increases. Earlier this week, we had news that the Grits are planning to raise the minimum wage to $11, and tie future increases to inflation. Folks, this is bad news for Ontario businesses and—to the extent it increases inflation—bad news to seniors and others on fixed incomes.

The minimum wage was frozen at $10.25 about four years ago by, guess who? the Liberal government. I assume increases during that time were considered ill-advised. So why now? Why not last year? Is Ontario’s economy more robust this year? The simple answer to these questions lies in the Premier’s leftist world view.

Birds fly, fish swim and leftist premiers do things like raise minimum wages. Such decisions are based on ideology, not sound economic management, and, therefore, should come out of general revenues and not be the sole responsibility of businesses.

Thirdly, Premier Wynne has announced her intention of imposing a forced retirement saving plan on all Ontario workers, even those who cannot afford it or who have no wish for such a program and have—from their points of view—better use for their money, at least, at this point in their lives.

The federal Conservatives rightly claim that increasing pension contributions or adding a new one to the current payroll tax  is a job-killing strategy. As one might expect for a leftist, though, Premier Wynne disagrees. She says, “This is not a tax. This is an investment in the future ….” [Italics mine] Not a tax indeed. What a lot of boloney. A tax is a tax is a tax….

It’s always the same with leftists governments who want to do something that’s unpalatable to voters: do it anyway, but call it something else. Remember how Tom Mulcair and his team denied vehemently that “Cap and Trade” is nothing more or less than a carbon tax.

What leftists seem not to understand is businesses have a limited source of funds from which to pay for labour. Ask them to pay out more in government mandated pension premiums (i.e., payroll tax) and over time, one of the following will occur, or more likely a combination of all:

  • Businesses won’t come to Ontario.
  • Businesses will close their doors and leave the province.
  • Businesses will pay less in wages and other benefits to make. up for the increase in payroll tax.
  • Business will employ fewer workers or use them for fewer hours.

Unlike in the public sector, for businesses, there really is only so much juice in the lemon; there is no such thing as a free lunch. Every new expense has a consequence. And the likely consequence here is fewer jobs for Ontarians. If giving Ontarians a more attractive retirement plan is a social priority for the Grits, then budget for it directly and find the money from some other program with a lessor priority.

Forgive one more cheesy cliché. Let’s call a spade a spade. We all believe in social responsibility and know that someone has to pay. But when it comes to government mismanagement and general welfare, let the costs be spread out among us all and not piled onto one group, especially a group like businesses (job creators) who we look to for our jobs.


  1. It's kind of simple really.

    Wealth disparity hampers growth. The highest growth in the US occurred when income disparity was at a minimum, the Great Depression and the current economic ills come at times of historic highs in inequality.

    More people having more income provides a more fertile environment for businesses to thrive in, since people spend more.

    The notion that rich people create jobs is somewhat of a myth-- people create jobs.

    1. Anon 2:20, Your words: "Wealth disparity hampers growth." I do not disagree, but artificially forcing up growth is not the answer, and was not any part of the answer when "The highest growth in the US occurred when income disparity was at a minimum."

      "The notion that rich people create jobs is somewhat of a myth-- people create jobs." Can you provide examples to support this statement?

  2. true to her socialist ideology she hates business and really would like to see Ontario and for that matter all of Canada bankrupt and under the thumb of some moron from the liberal party.