Tax Cuts Off The Agenda

PCs 'believe' in tax cuts, won't pursue them for now
'We're going to move on to other issues,' Runciman says after waving 'white flag'

Lee Greenberg
The Ottawa Citizen
Thursday, March 27, 2008

TORONTO - Acting Ontario opposition leader Bob Runciman struck a defeated tone outside the provincial legislature yesterday as he blamed special interest groups for his party's decision to suddenly fall silent on the issue of tax cuts following a spend-heavy Liberal budget.

"The reality of the situation is that most of the stakeholders seemed to have rolled over on this, even the ones who were complaining loudly prior to the budget -- whether the Canadian Manufacturers (and Exporters), the (Ontario) Chamber of Commerce," Mr. Runciman told reporters.

"Our position is well known, we believe in it. What's the point of continuing on this, especially when the people who are most impacted have sort of waved the white flag?"
Instead of tax cuts, which had featured prominently in earlier sessions, Mr. Runciman led off question period yesterday by questioning provincial policy on skilled labour hiring. Tories then touched on the issues of job retraining, long-term care, the provincial debt, federal transfers, native affairs and a regional development fund.

In recent weeks, federal Finance Minister Jim Flaherty made tax cuts top of the Conservative agenda through a series of unusually intense attacks on provincial Liberals.

His attacks garnered so much attention, in fact, that the former Harris-era cabinet minister appeared to usurp the role of opposition leader John Tory in the run-up to the budget. Most notably, Mr. Flaherty claimed Ontario was "the last place" for new business investment and likely headed for "have-not" status in the next several years.

Although his party was largely overshadowed throughout the squabble, Mr. Runciman yesterday said he was not frustrated by the tactic. He acknowledged, however, provincial Tories will refocus on issues other than tax cuts.

"In terms of pounding the issue day in and day out in the legislature, no, we're going to move on to other issues," he said.

Meanwhile, it appears provincial Liberals are ready to move on as well, as Finance Minister Dwight Duncan, fresh off his government's $96.2-billion budget, suggested he was ready to forgive and forget Mr. Flaherty yesterday.

"We need to tone down the rhetoric," Mr. Duncan said. "Both of us have an obligation on behalf of the people who sent us (here) ... to put aside whatever partisan differences exist and try to find areas where we can work together."

On Tuesday, federal Conservatives took the unusual step of sending their own representative to the Liberal budget release in Toronto. Federal MP for Nepean-Carleton, Pierre Poilievre took the occasion to accuse the McGuinty Liberals of "killing jobs and smothering the economy."
In the face of such open hostility, Mr. Duncan yesterday relented. He acknowledged, under pressure from Conservative MPP for Nepean-Carleton, Lisa MacLeod, that one quarter of job retraining money laid out in Tuesday's budget originated from the federal government.
Mr. Duncan said he hadn't contacted Mr. Flaherty but will "reach out more formally sometime soon."

A spokesman for the federal finance minister said he would "absolutely" return any call Mr. Duncan might make.

"Minister Flaherty meets regularly with his provincial finance ministers, whether in a group or individually, and he will continue to do that including (with) Ontario," said Dan Miles.
Many have questioned Mr. Flaherty's motives for the recent attacks, which have increased in intensity since the federal budget was tabled in February.

Outwardly, the goal of the unusual tact was to pressure Ontario Liberals into tax cuts to improve competitiveness and stave off impending economic storm clouds. The province's battered manufacturing sector, which accounts for one-fifth of its economy, is expected to continue to hemorrhage jobs in the coming months and years.

Many observers feel his real motives for the attack were more political. Some suggest Mr. Flaherty is shifting blame for broader economic woes to Ontario to alleviate pressure in case of a federal election. Others still believe he is exploiting weakness in the provincial party in order to set up his own return (current leader John Tory, who defeated Mr. Flaherty for that title in 2004, is seatless and recently led the party to a bitter election defeat).