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Ontario's deficit grows: MoveOntario in trouble?

I think that Metrolinx should be able to get a fair bit of funding by road tolling. If they do a congestion charge like exists in London, that could get a bunch of money into the corporation, which should go to capital projects like new subway and LRT routes. That gives them more money to do their own projects, relieving the province. I don't think that the Province should be stopping funding for MO2020 at all, but it'd mean that they don't have to give any more money.
 
Which Ontario party is more favorable to Mass Transit?

Everyone: Interesting news about Ontario's financial problems and the thought that Move Ontario 2020 could be in financial jeopardy.

Which Ontario party - if they are in power - would be the better supporter of mass transit and funding the large Move Ontario project?

I noticed some think that the TTC should be dissolved under Metrolinx but what
I think may happen is that the agencies will remain under the parent "umbrella" organization - which will be Metrolinx.

I feel it may be something similar to Chicago in which the Chicago Transit Authority,METRA(Metropolitan Rail Commuter Rail) and PACE Bus in areas
outside the CTA service area would be all under the 70s-era created RTA
(Regional Transportation Authority) - METROLINX would be Toronto's "RTA".

Thoughts from LI MIKE
 
kEiThZ said:
It's short-term pain for long term gain. McGuinty's got my vote for all the politically unpalatable but sound policy decisions he's taking now. I think the deficit will recover over time as corporate revenues rebound.
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It's not been short-term pain, and deficit recovery under McGuinty is uncertain to say the least.

McGuinty has run budget deficits every year since he took over from Ernie Eve's Conservatives. Sure, he can try to blame the first one one Conservative book-twisting, but after that Dalton's presented deficits each year. Now, the Ontario Liberals project deficits of $21.1 billion in 2010-11 and $19.4 billion in 2011-12.
 
Northern Light said:
With respect to the minimum wage issue.

Let's start by addressing where the minimum wage is relative to recent history.

The minimum wage was $6.85 per hour when McGuinty took power in 2003. But it was also $6.85 an hour when Mike Harris took power in 1995.

So if you had gradually adjusted the minimum wage by inflation each year from 1995, you get to almost exactly $10.30 per hour in 2010. (the proposed minimum wage is $10.25)

However, it is further worth noting that the all time high minimum wage was (adjusted for inflation) was in 1972 or so; and would today work out to $11.40 per hour)

If you showed core living costs; (housing,food, transportation and telephone) and equated that number to Toronto only, you would get a higher number still (approx. $12.80 per hour)

So to suggest $10.25 is some how egregious by historic standard, or that an increase is untenable doesn't hold weight.
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There is something to be said for avoiding rapid, sudden rises in minimum wage. Minimum wage has already risen by 50% in the last few years.

Moreover; the corporate tax rate when the minimum wage was equivalent to over $11.00 per hour was; 44% (28 federal, 16 provincial)

With today's corporate tax rate by 2012 being 25%; companies are in a far better position to afford the wage they historically paid to entry-level workers; and if they arguably split 1/2 the corporate tax reduction with their worker, pro-rate equally across the wage spectrum; you would see a min. wage of $13.80 per hour.
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That misses the whole point. You should realise that raising minimum wage to $13.80 would put hundreds of thousands out of work. Anyone who is not worth $13.80 per hour would find their job outsourced to a lower-wage jurisdiction or replaced through investment in equipment. Raising the minimum wage is an extremely poor mechanism for increasing social welfare--some might benefit in the short run, in the long run you have many more people on social assistance. I'd be much more inclined to have people work at whatever wage they can command and give them money to help them cover living expenses.

I have some serious grievance with the argument that paying people enough to survive may threaten the existence of a business. If the business can't survive being decent; let it die!
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Much better to lose the business and have the person be unemployed? Why not a minimum wage of $25/h then?


The argument that entry-level wages are such a burden is quite the mis-nomer.

The vast majority of entry-level wages are not paid in factories; nor in the service sector; but rather in retail.
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Sure. Expect high-service retailers to perish and Wal-Mart to thrive. Expect Wal-Mart to cut labour-hours even further. You'll start to see more and more self-service retail.

Now tell me with a straight face that you are going to go from Hamilton or Toronto or even Windsor to cross the border to get a Big Mac that is 40c cheaper?

Right, you aren't. Cause you would eat that savings up in the bridge toll alone, never mind the hassle and wasted time.
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No, but I'll make more food at home, and McDonalds will try to replace as many jobs as possible in their kitchens and at retail with machines. Maybe they will create ordering kiosks rather than paying cashiers. I think you underestimate how many jobs would be lost if people cost $15 per hour.

Let McD's and Walmart pay a fair wage; its inconsequential to their bottom line; but its very beneficial to both society and gov't if they do the right thing.
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I don't think you understand the cost structure of large retailers. A very substantial part of their cost is wages. And if Burger King figures out how to run a fast food outlet with half as many workers, and thus can sell burgers for 30% less, then Burger King is going to kill McDonalds. Rising minimum wage will also kill small independent retailers, as economies of scale in labour reward big-box retailers. There will be more part-time positions, with employees sent home the moment their services are not needed.

And those that keep their jobs may benefit, but many will become unemployed. And that unemployment comes at a high cost to the economy, the government, and the unemployed individuals. Better that they keep working at whatever wage they can achieve, and have the government give them money. I'd much rather see that than have the government pay even more to have them sit at home.
 
Exactly, Mister F.

That misses the whole point. You should realise that raising minimum wage to $13.80 would put hundreds of thousands out of work. Anyone who is not worth $13.80 per hour would find their job outsourced to a lower-wage jurisdiction or replaced through investment in equipment. Raising the minimum wage is an extremely poor mechanism for increasing social welfare--some might benefit in the short run, in the long run you have many more people on social assistance. I'd be much more inclined to have people work at whatever wage they can command and give them money to help them cover living expenses.
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That's very simplistic. While there certainly is an economic cost to increasing the minimum wage, the vast majority of minimum wage jobs are not outsourceable or replaceable by capital equipment. Most of them are in low-end service operations (the WalMarts and McDonalds). It's not like you can make the burgers in China.
 
I'm pretty sure McGuinty will go down as one of the lesser Premiers in recent history. There is just a meta-incompetence that permeates his entire government. In his term, I think he has maybe made 2 or 3 tough but justifiable policy moves (the HST, and I guess the Health Transfer Tax), though it doesn't help that most of them involve one way or another increasing taxes. Other than that though, it's just an endless wave of populist intervention in the economy, liberal application of spending to key constituents (nurses, teachers, civic workers) with little to no oversight, and sentimental nanny-stateism. Even in 2007, when it was abundantly clear that the economy and tax revenues were about to fall off a cliff, he refused to take a stance.

Politicians love claiming the financial crisis came out of "nowhere", but industrial woes have been documented for decades and there has been no shortage of warning that Ontario's industrial sector was woefully uncompetitive with the USA and was mostly being propped up by a 60c Loonie. The solution? Hell if I can say there was one. The approach thus far has consisted of incoherent government intervention (like Micheal Bryant's bizarre claim the Ontario not only can but must "pick winners and losers") subsidizing all manner of things we probably shouldn't subsidize be it solar panels for a province that doesn't get much sun or the Chevy Camero, the venereal disease of cars. To placate the urban types, we get Richard Florida, which is basically the most disappointing guru for a province like Ontario. There has been painfully little discussion of how we can position ourselves for long-term economic growth.
 
unimaginative2 said:
That's very simplistic. While there certainly is an economic cost to increasing the minimum wage, the vast majority of minimum wage jobs are not outsourceable or replaceable by capital equipment. Most of them are in low-end service operations (the WalMarts and McDonalds). It's not like you can make the burgers in China.
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The evidence has been clear that raises in minimum wages translate quite directly into either lower employment or lower hours worked. You can't outsource McDonalds, but you can introduce things like self serve checkout kiosks (which WalMart is in fact doing in high-wage jurisdictions), cut down on store hours, or delay/cancel expansion. Estimates south of the border suggest their recent minimum wage hike (from 6.55 -> 7.25) could lead to a loss of 300,000 minimum wage jobs, overwhelmingly held by visible minority groups.

Direct cash transfers are by far a better way to ensure certain basic levels of social equality than minimum wages. As long as the demand curve slopes downwards, price floors like the minimum wage will always encourage inefficient labor patterns (like having hospitals spend billions automating all sorts of record keeping while unemployment, in some cases, is doubt digit). Direct cash transfers impose no such distortions on the economy and provide much better quality of life improvements to their recipients.
 
I fear that some of you who talk about tax increases, whatever they are, don't live in reality. This is a government that has raised taxes mere months after getting elected. And it's a government that's leading a tax shift that will shift the burden from the corporate sector on to consumers (read voters).

Additional taxes at this point would just be political suicide regardless of what the merits are of the programs being paid for with these funds.
 
Whoaccio said:
I'm pretty sure McGuinty will go down as one of the lesser Premiers in recent history. There is just a meta-incompetence that permeates his entire government. In his term, I think he has maybe made 2 or 3 tough but justifiable policy moves (the HST, and I guess the Health Transfer Tax), though it doesn't help that most of them involve one way or another increasing taxes. Other than that though, it's just an endless wave of populist intervention in the economy, liberal application of spending to key constituents (nurses, teachers, civic workers) with little to no oversight, and sentimental nanny-stateism. Even in 2007, when it was abundantly clear that the economy and tax revenues were about to fall off a cliff, he refused to take a stance.

Politicians love claiming the financial crisis came out of "nowhere", but industrial woes have been documented for decades and there has been no shortage of warning that Ontario's industrial sector was woefully uncompetitive with the USA and was mostly being propped up by a 60c Loonie. The solution? Hell if I can say there was one. The approach thus far has consisted of incoherent government intervention (like Micheal Bryant's bizarre claim the Ontario not only can but must "pick winners and losers") subsidizing all manner of things we probably shouldn't subsidize be it solar panels for a province that doesn't get much sun or the Chevy Camero, the venereal disease of cars. To placate the urban types, we get Richard Florida, which is basically the most disappointing guru for a province like Ontario. There has been painfully little discussion of how we can position ourselves for long-term economic growth.
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Unfortunately, the competition isn't all that better.
 
To be fair, there is also a personal income tax rate reduction as well. It should about offset any increase people see due to HST. It's an overall tax reduction, though the biggest bang is coming from an increase in tax efficiency.
 
On the subject of the minimum wage:

This fallacy concerning unemployment is really quite obnoxious as not a single reputable study backs it up.

In fact, over the term of the last several years, jurisdictions with higher minimum wages such as Australian and Ireland has low unemployment, comparable or better than many lower minimum wage jurisdictions; and very respectable economic growth to boot.

Yes wages, particularly in the industrial sector can be and are a competitive issue in an open-trading system. But the minimum wage is simply not relevant in most manufacturing jobs, where wages are on average more than double the minimum, and largely beyond the influence of all but the most drastic moves in legislated minimum wage rates.

With respect to the 'McJobs' factor, there is a very limited argument of application vis-a-vis the minimum wage. (McDonald's did not go out of business or even shrink drastically in Australia or Ireland as Minimum wages rose). And McDonald's in Australia is no more automated than it is here.

Yes, there is a risk of some low-wage job loss at the margins, in so far as a rise in the minimum wage makes McD's as a low-cost provider slightly less competitive vis a vis higher cost model rivals or the grocery store. So?

If people go to Swiss Chalet instead, one job at McD's disappears, another at Swiss Chalet arrives; or alternatively, the job shows up at a local grocery store or butcher etc.

Social consumption will INCREASE from a rising minimum wage, not decrease, and this will create more, not fewer jobs; and will result in more, not less government revenue.

I won't suggest its a panacea; but its sensible, fair; and economically beneficial.

For those of you not inclined to accept this, I don't know what to say except that 2+2 is still not 5, no matter how much you truly wish and desire that greater social inequity made sense and unfairness were enshrined in law.

There is simply no evidence which credibly links either higher unemployment or greater social inequity to a higher minimum wage; but there is ample evidence to the contrary.
 
kEiThZ said:
Unfortunately, the competition isn't all that better.
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Yea, I'm amazed that with someone as bland as Dalton the best the PC could do was Hudak. I know there are lots, tons in fact, of totally intelligent people who understand why the Dalton brand of Liberalism is a bad idea, but the only people who seem to run for opposition parties seem to have less brains than my printer. What gives?

And in so far as both Horwath and Hudak are probably intelligent by themselves, the only policy of Dalton's they deem fit to criticize is probably his most sensible one in recent memory (HST) not, say, subsidies to the Camaro. The Camaro for the love of god!
 
Northern Light -

This isn't a minimum wage thread, so I wont say much more than this. I'm not sure where you get the idea that "simply no evidence which credibly links either higher unemployment or greater social inequity to a higher minimum wage." The bulk of economists have long since agreed that minimum wage laws have a detrimental effect on employment, and it is supported nearly every step of the way from theory (the negative demand curve) to numerous observations of the American, and global, labor markets. David Neumark, out of UC Irvine, has made several publications on the subject (here and here). Rather than spam citations, I'll just provide this blurb from some such US Committee has a rather convenient list of studies on the topic from prior to '95. I would also point out that your logic is flawed. Comparing employment horizontally across countries (Ireland, Australia vs. USA, Canada) proves nothing. There are thousands of economic, geographic and cultural factors which can influence employment levels and have no relation at all with minimum wage legislation.
 
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