Transcript for Saturday, November 21, 2009 – 1830
Encore Presentation Sunday, November 22, 2009 – 0700
Subject – HST Debate
GUESTS –
Armand Conant, President, Canadian Condominium Institute
Robert Hattin, Canadian Manufacturers and Exporters
Subject – Green Party Future
GUEST –
Mike Schreiner, New Leader of Green Party of Ontario
SEAN MALLEN: Most of us would say that Albert Einstein was a pretty bright guy, but the man who figured out the theory of relativity was stumped by his tax return. Einstein once said this is too difficult for a mathematician, it takes a philosopher. On the same subject, the noted philosopher Mark Twain, observed that the only difference between a tax man and a taxidermist is that the taxidermist leaves the skin. Yes, we are returning to the subject of the harmonized sales tax this week, and while we hope to have a balanced discussion of the pros and cons, there’s no doubt which side is the better source of comedy material.
(video clip)
Finance Minister Dwight Duncan: The proposed HST and tax cuts would increase business investment, create new jobs, raise incomes and reduce prices on many consumer purchases.
As the Finance Minister introduced the HST legislation, he tried hard to highlight the associated income tax cuts, and the exemptions that have been levied, like children’s clothing and the morning cup of coffee. But the flack is all coming because of all the items that will cost more – home heating to hair cuts, funeral services to closing costs on home sales.
Andrea Horwath, NDP Leader: At a time when families need help with the growing cost of living, what do they get. They get a bill that makes life much, much less affordable.
And while there will be committee hearings at Queen’s Park, the opposition says there should be a Windsor to Wawa consultation road show.
Tim Hudak, PC Party Leader: If Dalton McGuinty doesn’t have the courage to take this out for full public hearings in communities across our province, he doesn’t have the courage of his convictions.
On this week’s Focus – The Winners and Losers from the HST.
From the Global News Room in Toronto, Focus Ontario with Sean Mallen.
SEAN MALLEN: Thanks for joining me again. Later in the program I’ll introduce you to the new leader of the Green Party of Ontario, just crowned this past weekend. But first the harmonized sales tax, and there are many voices across the spectrum in this debate. Here are two with strong opinions. Armand Conant practises condominium law with the firm Heenan Blaikie, and is the President of the Canadian Condominium Institute, which speaks for the owners of the buildings; and Robert Hattin is the President of the Hamilton-based firm, Edson Packaging Machinery, and he’s here representing the organization, Canadian Manufacturers and Exporters. Thank you both after a long introduction.
Guests: Thank you.
SEAN MALLEN: Start with you, Mr Hattin. You’re part of a coalition, including the Chamber of Commerce, supporting the tax package. Why is it good for your business in particular, manufacturers in general?
Robert Hattin: Sean, our data shows that it’s going to free up a lot of cost. It’s a fair method of taxation. What it does is it takes the hidden or embedded taxes, puts it into a value added form, the consumer has the choice, and the electorate has a choice as to what they’re going to pay. Currently many of these taxes are hidden by business, business doesn’t vote, so it’s not fair nor transparent, and for that reason, and the fact that it will create jobs, some have said as many as 500,000. Certainly it will be 10,000 per year just through the tax savings and administrative savings. We think it’s a good thing, but mainly because it’s the fair and appropriate method of taxation.
SEAN MALLEN: Just a short layman’s term explanation. How does the manufacturer save money with the tax structured this way?
Robert Hattin: Really there are taxes that we pay along the way in the production of our goods and those things get factored into our costs. So any time we remove that tax from what we do, it’s diminished cost. If we have less cost we can sell our products more competitively, but the big thing is that it also helps on the capital requirements that the companies need to run on. Ultimately as I said, it comes down to the fact it’s a value added tax, and it’s not hidden and it doesn’t compound along the way.
SEAN MALLEN: So Mr Conant, condominium owners. Not so good for your people. Why?
Armand Conant: No, the problem we have is that the condominium ownership and industry is quite unique in the impact that it will have, because we have both mandated operating budgets we have to work with, and reserve funds, because condominiums are creatures of a statute, so you look at the Condominium Act in dealing with these two, and the HST will have a severe impact on the embedded costs from which the monthly common element fees are calculated on the operating side.
SEAN MALLEN: Such as.
Armand Conant: Such as the HVAC or elevator service contract, management agreement, added costs, a whole range of costs that almost all condominium corporations have or must have, on the one hand, that’s the operating budget side, and that’s where we would be, 7,000 condominium corporations in Ontario, residential, where we represent 110,000 of those units in our organization. There’s probably about 1.2 million people living in condos. So the operating side you have it, and separately is the reserve fund, and this is the mandated fund that must be kept, where we figure we have right now close to $1.5 billion in this reserve fund, but the moment the HST comes in it gets hit with an immediate shortfall. So both will be impacted severely.
SEAN MALLEN: Mr Duncan keeps talking though about the income tax cuts, substantial income tax cuts for personal and business tax cuts. Doesn’t that counteract the effect?
Armand Conant: No, not completely. We are working hard with the government, trying to find solutions for condominium owners. We spent the last five months working with various people in the government and they have worked with us to try to find, as Rob has said, some sort of solution to help. It helps, those tax reform packages will help, but there’s costs that will come in that condo owners will have that ordinary home owners will not have, which will never be completely offset by the tax reform.
SEAN MALLEN: Mr Hattin, there’s been a lot of debate about how many jobs this will create. You cited a half million, which is a report commissioned by the government. The opposition keeps citing other reports suggesting job losses. Who are we to believe?
Robert Hattin: I tend to think that those who suggest there are going to be job losses are just trying to foment a fear economically. I don’t think any responsible government would put forward a tax package that is going to cost the economy. The Ontario economy, especially the manufacturing sector, which really is the backbone foundation of our economic wealth generation, you anticipate – well, let’s do the simple math. If there’s going to be a half billion dollars in tax savings per year through the removal of these embedded taxes, you divide that by $50,000. per good job. That’s 10,000 jobs. So you know that’s just on a very simplistic side. Ten thousand jobs represents one and a half Ford Canada’s. So from that standpoint I can’t see how anyone would want to suggest that this is going to cost us jobs. It’s freeing up capital; it makes the administration and the tax collection easy.
You know Armand is correct. There are some unique elements that we have to deal with. To my mind I think the politicians would be better off trying to tweak the system, adjust for these idiosyncrasies and make it the best taxation system in the world.
SEAN MALLEN: Okay, lots to talk about. I am going to stop you right there, we’re going to take a break and come back and talk more about taxes.
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SEAN MALLEN: Welcome back to our conversation about the HST. Mr Conant, you’ve heard the arguments about this could be a job creator and I think it might be fair to say that economists, the weight of opinion among economists is this a better way to do this kind of consumption tax. In that sense then, what do you make of the argument that it’s a better thing for the overall economy even though some elements in the economy might be hurt by it?
Armand Conant: Well, that’s what the government has said and we’ve heard what they’ve said, they’ve explained to us the whole tax reform package and how it will work, both the corporate income tax reductions and personal income. The concern we have with the condominium industry is that there is this unique and significant impact that others don’t have. So that’s what we’ve had to focus on, that on top of the other concerns that every Ontarian has about the HST, on top of that the condo owners will have this additional impact.
SEAN MALLEN: And there was actually a figure – we didn’t get to it in your first explanation – you’re estimating it could cost condo fees to go up 6.8 per cent. What’s the impact of that?
Armand Conant: Yes, the first point we have to make clear is that the HST isn’t on common element fees, but the costs from which you calculate.
SEAN MALLEN: Indirect impact.
Armand Conant: Exactly, and in Ontario it will probably average about six to seven per cent, we’re saying 6.8 per cent of your monthly common element fees, just because of the HST, and then add on your normal inflationary pressure and other costs that might go up.
SEAN MALLEN: So what does that do to the people living in condominiums?
Armand Conant: That means they will, their budget when it comes in at the time of the HST, their costs will have to go up 6.8 per cent. Some will be a lot more, some could be a bit less. And then on top of that is the reserve fund, on top of that.
SEAN MALLEN: Mr Hattin, yes there are lots of good economic arguments, some good business arguments for it, but consumption tax is inherently regressive, the fact is the people who will be hurt most by it are people who don’t have as much dough, will have to pay more for heating or gasoline, or that kind of thing. What’s your argument against that?
Robert Hattin: It’s very difficult to be on this show and not be apolitical, but I think you have to look at the whole budget in total, where they are reducing the income tax for low income wage earners and they’re giving rebates to other people. So I think in total when you step back from that it does take the sting out of that regressive part of the taxation, but ultimately people now have a choice. And I think the other reason why it’s a responsible way to go is when a government wishes to tweak a very overt and very public tax like the provincial portion of the harmonized sales tax, they do so at their own electoral power. Right now they can put on the sales tax, the manufacturers pay for them, manufacturers don’t vote. So from that standpoint it will be even more transparent.
SEAN MALLEN: You were speaking before we went on camera about tweaking it, and you think that perhaps it might be a good idea once this is all in place to maybe drop the provincial portion of it a little bit, maybe turn it from a 13 per cent tax down to a 12 or 11 per cent.
Robert Hattin: Yes, the Canadian Manufacturers and Exporters’ economist, J. Meyers, suggested that there’s probably a point and a half in there that could be looked at, but again it has to be offset. I mean at the end of the day the province needs revenue and if the condo owners association are going to get an exemption that takes that pressure away from that, so it’s checks and balances. The CME is more concerned about the method of taxation than what the rates are, and I think it’s going to take a lot of ciphering to figure out what is truly fair and where the exemptions should be.
SEAN MALLEN: How much difference would it make to your people, Mr Conant, to see it dropped by one or two per cent? How much would that mitigate your concerns?
Armand Conant: That would go a long way. One of the first things we suggested to the government, and in fact in our submissions we’ve given to the Ontario government, is either a sliding scale or reduced rate of the HST. That would go a long way because the impact on the owners is so great, anything we can do to get that down would be fantastic.
SEAN MALLEN: Just about a minute left. A quick response from both of you
then. Mr Conant first, what do you make of the process? I mean you’ve got the opposition complaining this week it’s being rammed through. We had Tories being tossed out, calling the Minister a liar. What do you make of it? Could this be done better and how?
Armand Conant: Well, the only thing I can say is that there’s always better ways to do it, but we have been working for about five months trying to find solutions for the condo owners. So in that respect the government has had a process that has allowed us (to express our concerns). We know other stakeholders have spoken to the government, so to that degree they have been receptive and listened to our concerns. We’re hoping they will come up with solutions for us. So in that form of the process I think they’ve done a good job.
SEAN MALLEN: Last twenty seconds to you, Mr Hattin. What do you make of the process.
Robert Hattin: I think in some ways it’s very irresponsible because the opponents to the HST are not dealing from facts, and they’re not trying to make it work better. The HST is a fait accompli. The Liberals have the votes to get it, so really it should be up to the opposition to say well, here’s what’s fair on behalf of my constituents. This shrill advocacy is not helping anyone, and it tunes voters out.
SEAN MALLEN: Okay, well good conversation. Thank you both, gentlemen.
Armand Conant: Thank you very much.
SEAN MALLEN: And back in a moment to hear from the new leader of the Green Party of Ontario.
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SEAN MALLEN: Well, it wasn’t much of a race. Mike Schreiner was unopposed as the candidate for the leadership of the Green Party of Ontario, and this past weekend the membership made it official. Welcome to Focus Ontario.
Mike Schreiner: Thanks, glad to be here.
SEAN MALLEN: So tell us all about yourself. What’s your background and what qualifies you to be leader of the Green Party of Ontario?
Mike Schreiner: I grew up on a farm, and I’ve been a small business owner, ran my own food distribution business promoting local Ontario food for ten years, and then started a non-profit organization promoting Ontario farmers, and I plan to bring an entrepreneurial perspective to the Green Party of Ontario as we build this new party, the fastest growing political party in Ontario, and we’re going to be a strong voice for a prosperous green economy, small business owners and family farms.
SEAN MALLEN: Last time green issues were right top of mind, both federally and provincially.
Mike Schreiner: Absolutely.
SEAN MALLEN: Still couldn’t get anyone elected, not even really coming close. There were a fair number of votes province-wide, but this is the question I always ask Green Party leaders who come on the program, how do you get elected in just one seat to begin with?
Mike Schreiner: Well, you know what, we took second in Bruce-Grey-Owen Sound in the 2007 election. We feel poised to break through in that riding; we also did very well in Guelph. As a matter of fact we got in the top three in 17 ridings in the 2007 election, and you can add an 18th in the by-election in Haliburton-Kawartha Lakes-Brock in the spring. We’ve doubled our vote in every election over the last ten years, so I think we’re poised to break through in 2011, and I think we’re partly poised to break through because I think the economy, and the green economy, the prosperous green economy, is going to be a big issue in 2011.
SEAN MALLEN: Okay, so from a green point of view then, how do you make an appeal to the voters when they see high unemployment, manufacturing jobs lost, what can the Green’s offer that the others can’t that can get you elected?
Mike Schreiner: Well, I think one of the causes of this recession, even though I know the media keeps talking about bad bankers, and poor lending practices, I think it was $150. a barrel oil, and essentially that threw our economy into a tailspin. Since the McGuinty Liberals were elected –
SEAN MALLEN: It wasn’t sub-prime mortages in the United States.
Mike Schreiner: Actually it was $150. a barrel oil. Our economy is structured to run on cheap energy. It became very difficult for us to be competitive in a high energy cost environment. And I think we need to restructure our economy to become way more efficient and the Green Party is the one party putting forward a comprehensive vision of how we make our economy more efficient, more competitive in the 21st century to create tomorrow’s green jobs today.
SEAN MALLEN: Well, how do you do that? I mean we saw a manufacturer on just now. Manufacturing is still the backbone of the Ontario economy. Auto industry is still pretty important; we’ve certainly got a couple billion dollars invested in that.
Mike Schreiner: I think we need a transition fund to help the manufacturing sector transition into manufacturing the products of tomorrow, and I’ll give you a couple of examples. I went to Ohio, rust-belt state, hit hard by you know the recession. Toledo, Ohio is transitioning from being the glass-making capital of North America, to being called solar valley. Six thousand people now employed among a number of companies in the area making glass for solar panels. That kind of transition can happen in Ontario. I look at a place like Germany, with 250,000 people employed in the renewable energy sector. They expect that to grow to 400,000 over the next few years.
SEAN MALLEN: That’s with a population of, what is it, 60 – 70 million. I mean it’s all good stuff, but isn’t it kind of around the edges. This isn’t the large scale kind of job growth you need.
Mike Schreiner: I’ll give you another example.
SEAN MALLEN: Okay.
Mike Schreiner: We need a building fund in Ontario to retrofit our buildings to make them more energy efficient, spurring a wave of job creation in the construction and trades sector that’s going to create jobs today, that’s going to save us money tomorrow, because we have to start reducing our energy bills to be competitive moving forward in the 21st century.
SEAN MALLEN: I might as well ask you since you’re on the panel now, we just dealt with the big issue in the earlier part of the show. Where does the Green Party stand on the HST and the tax package that was introduced this week?
Mike Schreiner: We’re opposed to the HST. Like the other opposition parties we are opposed to a number of the new products that are vital in people’s lives that are going to be taxed. But a different perspective that the Green Party brings to the table is that we think tax policy in this province is too important of a policy tool to turn over to the federal government. We think the province should maintain control of our sales tax policy, determining the way in which we want to implement it, and the types of products that we want to tax.
SEAN MALLEN: Something else that was a little bit controversial in the last election, the predominant issue actually, was the funding of religious schools. The Green’s at that time, if memory serves, were in favour of one public system only. Correct?
Mike Schreiner: Correct.
SEAN MALLEN: Where do you stand on that?
Mike Schreiner: We still hold that position, but we’re not going to make it our priority in education. We think the number one issue in education right now is to re-empower our local school boards, teachers and parents, to make more of the decisions that affect education in our communities. You know the whole centralization of power started with the Harris government; it’s continued with the McGuinty government and we want to re-empower communities and parents to make those types of decisions.
SEAN MALLEN: But Queen’s Park pays the bills. So –
Mike Schreiner: Well, we’re going to have to put all options on the table to look at how the tax structure and the financing of education takes place.
SEAN MALLEN: You’re going to be a full-time leader.
Mike Schreiner: That’s right.
SEAN MALLEN: What does that going to mean, and what significance is that?
Mike Schreiner: Well, it means the first time the Green Party of Ontario has had a full-time leader, and I think that’s an indication of the evolution of the party, the maturation of the party, the growth of the party. And so I’ll be spending at least one day a week at Queen’s Park when the legislature’s in session. I’ve already started that this week, been there twice this week actually, and speaking out on issues that are important to Ontarians, important to Green Party voters, and I’ll be spending the rest of my time travelling around the province, meeting with voters, listening, learning, talking about the issues that are important to the people of Ontario.
SEAN MALLEN: Just about thirty seconds left. You are from Toronto, you ran though in the Haliburton by-election that John Tory lost. Finished ahead of the NDP.
Mike Schreiner: Yes.
SEAN MALLEN: But still only about six or seven per cent of the vote. So I guess I need to ask, where are you going to run? Are you going to run in Toronto, are you going to run where you ran before?
Mike Schreiner: You know I’ll make that decision sometime in the next six months, and I’ll base that decision on strategically where it makes sense for the party, where we see opportunities to break through, and we’ll be making that decision quite soon.
SEAN MALLEN: Okay, and we’ll be watching. Well, congratulations on your victory and we’ll have you on the program again next election time. Mike Schreiner.
Mike Schreiner: Sounds great, thank you.
SEAN MALLEN: And still ahead on our final segment, your comments and the Play of the Week – The Good Citizen.
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Play of the Week
(video clip)
SEAN MALLEN: When the Lieutenant Governor hands out the medals for good citizenship they go to people who have made exceptional and long term commitments to improving their communities. Consequently most of the eleven recipients this week have been on the earth for a while, with the exception of Bilaal Rajan, who is a mere 13-years-old. Global News has profiled him before. Bilaal started fund-raising when he was all of four years old, pulling in money for earthquake victims in India. Since then his various efforts have collected five million dollars for children in lesser developed countries, and he’s been a youth ambassador for UNICEF, which is why he qualifies as the youngest ever recipient of Ontario’s medal for good citizenship.
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Before I go to the viewer responses, an apology. We had a little technical issue last week. Those of you watching the Saturday evening or Sunday morning broadcasts of Focus did not get to see the final segment of the program. If you’re wondering, the Play of the Week was Toronto winning the 2015 Pan-Am Games.
In a moment I’ll share some of the comments that also didn’t make it on air, but first here’s an e-mail I received after my interview last week with George Smitherman.
Joy Taylor writes: “I listened very closely to Mr Smitherman’s answer about the TTC fare increase. He gave a true politician’s answer to the question. I would have thought as a person who’s running for mayor of Canada’s largest city, he would have been brave enough to suggest that, as in most large European cities, the public transit system gets support in huge amounts from government. I guess George was showing that his loyalty lies more with Dalton McGuinty rather than with the TTC.”
And here are the comments I received last week which you didn’t get to see. First an e-mail from Derek Tully on the subject of the flu fight. He writes: “I was appalled to hear of the flu vaccine queue jumping. I feel that any health care professional or those volunteering or working for them, who allow queue jumping should be fired, or at least docked a week’s pay.”
And listen to this voice-mail on the subject of all day kindergarten: “I’m just saying we don’t need to be putting money into a new kindergarten plan when we desperately need the money for more substantial issues. We’re going through a recession and basically I just think he’s trying to buy votes.”
Well, I was getting comments on the HST even before I went to air with this
program. Got some more. You can send them to:
Focus Ontario
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e-mail: focusontario@globaltv.com
voice-mail message at 1-866-895-9555
Here’s our web information: http://www.globaltoronto.com/focusontario
This program will be streamed and you can also find transcripts of this and of past shows.
And that’s Focus for this week. I’m Sean Mallen; thanks for watching. We’ll see you next weekend.
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