Raising Ontario’s taxes without being trusted

Trapped by bad timing and intolerable traffic congestion from one end of its political base to the other, Kathleen Wynne’s government is agonizing over how to sell higher fuel taxes to pay for infrastructure and to encourage greater use of public transit.

Doing something brave like this isn’t entirely out of the question.

The need to make expensive new transportation investments is accepted. Historically, Ontarians have accepted higher taxes and Ontario Liberals certainly have no woolly ideological objections to raising them. Indeed, serious people think it’s possible that a broad, visible tax increase by this particular government now could survive, if necessary, an election next spring.

A blue-ribbon report authored by policy entrepreneur Anne Golden has made the case for new revenues and has found, allegedly, a plausible way to make a substantial tax increase palatable. Taxpayers won’t actually have to trust their politicians with their money: presto, the extra hundreds of millions of dollars will flow obediently into a separate, pristine trust account.

The Globe and Mail editorial board isn’t easily excited. But, dedicated revenue streams arouse their support:

“A dedicated fund would manage these revenues. Without such a stand-alone fund, new money runs the risk of disappearing into general revenues, and being co-opted by other needs.”

The weird thing about Golden’s gambit is that it’s so business-as-usual.

The Wynne government is being pummelled by financial messes in stand-alone government authorities — in energy and in health delivery, especially. And now it's being advised to restore trust in creative government by creating another stand-alone pot of public monies to spend on another high-profile, virtuous public cause.

The government opposes any "privatization" of government assets or services and, of course, will campaign for positive government as a problem-solver. And, at the same time, it should promise to further distance its own Cabinet from the tax dollars it raises for its greatest new priority?   

Deputy ministers in line ministries, of course, dream of not having to fight for new resources or defend ministry expenditures in Cabinet meetings — in competition with other ministries and other priorities. But only exceptionally lucky crown agencies — like power authorities and airport operators, for instance — enjoy the privilege of pocketing directly special taxes (with businesslike names like rates, fees, and charges) that are rounded, by the full force of government legislation, for their exclusive purposes.

Consistent delegation and professional public service doesn’t require, let alone excuse, the "micro management" of program spending by the Premier’s office or by central agencies. Wynne won’t put the scandals of the past behind her government by promising to do everything herself.

However, turning tax-raising power over to another tax-spending public body will neither discourage petty politics nor prevent extravagant spending.

(Would former Premier Dalton McGuinty have pushed electricity authorities to waste over a $billion on two paper power plants if he’d known that he’d have to go into the legislature and raise the money directly?)

Before going down that path once again, the Wynne government would be better advised to: (1) reduce the cost of new investments by reducing its vast storehouse of old assets that no longer need to be owned by the government and (2) spell out how the Wynne Cabinet will better manage rather than delegate the deployment of any new monies.

Wynne has been quoted as saying that the latest agency in trouble — Ontario Power Generation — needs a new “culture.” This is, at worst, pure evasion, at best naïve.

Ontario Liberals have been in power too long to play the ingénue. The public needs evidence of a new culture of zealous accountability around the Cabinet table, not amongst distant technocrats, before being asked to pay higher taxes.