Liberals slam NDP on business tax increase

The Liberals are accusing the NDP of hiding a $1-billion tax hike in their platform, but seem to have gotten some of their facts wrong in the process.

On Saturday Grits slammed New Democrat Leader Andrea Horwath's promise to "harmonize" the business education tax as a "hidden ... job-killing tax increase," pointing out the NDP plan will make Ontario businesses pay more on average, but that's only disclosed on one of the back pages of the party's platform.

Han Dong, the Liberal candidate for Spadina—Fort York, held a press conference at a Queen St. W. fish-and-chips shop on Saturday to say the NDP tax hike would harm its business.

"They're trying their best to stay afloat, and this hidden tax increase isn't going to help," he said.

The NDP hit back — accusing the Liberals of promising to do the same thing, and then breaking that promise. Plus, the party said in a press release, they're following advice given to the government by the Ontario Chamber of Commerce that the Liberals have ignored.

According to the chamber, both sides are right about some things.

"The NDP would indeed harmonize the business education tax rate, which is something that we've asked for," said Karl Baldauf, the chamber's vice president of policy and government relations.

The issue has a complicated history: different municipalities had different education taxes before the province took control over the rates in 1998, and they have remained unequal since then. In 2007, the province announced it would reduce and harmonize the rates, but put a pause on that in 2012 when it needed the extra revenue in the aftermath of the recession.

The chamber has been briefed on the NDP plan and Baldauf said it was told that some municipalities would be paying less and some would be paying more — adjusting the rates over time so the whole province will pay what some municipalities — including Toronto, Barrie and Sudbury — currently pay.

However, businesses in areas that have lower rates today would see significant increases, Baldauf said.

"Places like York Region, Peel Region, Halton, Durham, Ottawa, rural and northern Ontario would be paying more," he said.

Although the chamber would like to see a harmonized rate, it would like that to be at the low end of the range of current rates, so businesses pay less instead of more overall, as in the NDP plan. So Baldauf said the Liberals are correct in saying the NDP is proposing a significant increase.

"The last thing that Ontario businesses need right now is another thing affecting our competitiveness," he said. "Our ask is a harmonization — but a harmonization downwards."

However, Dong gave some numbers at his press conference that don't appear to add up — particularly when he said the fish-and-chips shop he was standing in would face a $5,000 property tax increase under the NDP plan, because the taxes would go up along with a province-wide average.

But that doesn't appear to be the case.

Both Baldauf and NDP said that under the party's plans, Toronto business education taxes wouldn't change significantly, since they are already at the target that other municipalities would be harmonized to, while businesses in some other cities would see their taxes increase.

This story has been updated to clarify Dong's explanation of the tax increase.