Transcript: Ernie Eves on the '96 budget | May 10, 1996

Steve sits in the studio. He's slim, clean-shaven, in his forties, with short curly brown hair. He's wearing a gray suit and a red shirt.

Steve says ONTARIO'S FINANCE MINISTER
HAS PROBABLY DONE
A HUNDRED INTERVIEWS
ON HIS BUDGET
SINCE HE UNVEILED
IT LAST TUESDAY.
HOWEVER, TODAY, WE ARE GLAD
THAT ERNIE EVES CAN JOIN US
FOR HIS FIRST ROUNDTABLE
DISCUSSION ON WHAT
IS OFFICIALLY CALLED
BILL 47, THE TAX CUT
AND ECONOMIC GROWTH ACT.
IN OTHER WORDS,
THE BUDGET.
WELCOME, ERNIE EVES.

Ernie says THANK YOU, STEVE.

Ernie is in his fifties, clean-shaven, with short gray hair. He is wearing a dark blue suit, white shirt and a colourful patterned tie.

Steve says YOU KNOW OUR
GANG HERE.
HUGH MACKENZIE AND PATRICK
GOSSAGE AND JANE PEPINO.
AND ACTUALLY, NOW
THAT I THINK OF IT,
YOU KNOW JANE
RATHER WELL.
ALAN?

A picture appears on screen. It shows the portraits of numerous people with their name below. A title in the middle reads “1970 Graduating Class, Osgoode Hall Law School, York University.”

Steve says OSGOODE HALL LAW
SCHOOL, 1970.

Ernie says AH-HA.

Steve says WHO WERE TWO MEMBERS
OF THAT CLASS?
WHO MEMBERS OF OSGOODE
HALL LAW SCHOOL CLASS.

A close up shows the portrait of a young woman and man. Under the portraits it reads “N.J Pepino,” and “E.L. Eves.”

Ernie says THOSE ARE SCARY
PICTURES.
WELL, JANE'S IS MUCH
BETTER THAN MINE.
[laughter]

Steve says LET'S GET STARTED HERE.
ONE OF THE REASONS WE
WANTED TO GET YOU BACK HERE
WAS TO TALK ABOUT-
WAS TO TALK ABOUT ANY
NUMBER OF DIFFERENT OPTIONS
THAT YOU HAD, VERSUS THE
CHOICES YOU EVENTUALLY MADE.
SO LET ME JUST START
THROWING THESE OUT.
FOR EXAMPLE, I'VE GOT
AN e-mail TODAY FROM A GUY
NAMED MALCOLM O'BRIEN WHO
SAYS, “IN MY OWN CASE,
A REDUCTION IN SALES TAX
WOULD BE WELCOME AS I
FRITTER AWAY MY
REMAINING DOLLARS.
THAT WOULD OFFER ME A
SMALL MEASURE OF RELIEF.
AN INCOME TAX CUT MEANS
ABSOLUTELY NOTHING TO ME.”
DID YOU CONSIDER LOWERING
THE RETAIL SALES TAX
INSTEAD OF THE INCOME TAX?
AND IF SO, WHY DIDN'T
YOU GO THAT WAY?

A caption appears on screen. It reads “Ernie Eves. Finance Minister.”

Ernie says WELL, WE DID, BUT WE
DID THAT BACK IN 1994.
NOT TO SAY THE THOUGHT DIDN'T
GO AROUND PEOPLE'S MINDS
IN THE MINISTRY OF FINANCE
SINCE THAT PERIOD OF TIME,
BUT REVENUE-WISE, IT WOULD
BE ABOUT THE SAME THING,
I SUPPOSE, IN
TERMS OF IMPACT.
HOWEVER, WE BELIEVE
THAT AN INCOME TAX CUT
PROVIDES THE ADDED
INCENTIVE, OR INITIATIVE,
TO STIMULATE LONG-TERM
GROWTH IN THE ECONOMY.
IT'S NOT JUST AN INJECTION
OR SHOT IN THE ARM
ON A SHORT-TERM BASIS.
SO WE REALLY BELIEVE INCOME TAX
IS THE BEST WAY AT CREATING
NEW JOBS, PROVIDING INCENTIVE
FOR PEOPLE TO EXPAND
THEIR BUSINESSES, AND
HAVING A LONG-TERM
ECONOMIC IMPACT ON JOBS.

Steve says BUT YOU WOULD HAVE AVOIDED -
IF YOU'D GONE FOR THE RETAIL
SALES TAX CUT INSTEAD
OF THE INCOME TAX CUT -
YOU WOULD HAVE AVOIDED THE
CRITICISM WHICH I HOPE
YOU'RE GOING TO GET IN THE
NEXT 20 MINUTES OR SO
FROM GOSSAGE AND
MACKENZIE HERE.

Ernie says WELL, ACTUALLY, FRANCES
LARKIN WAS QUITE A PROPONENT
OF A RETAIL SALES TAX CUT, AS
OPPOSED TO AN INCOME TAX CUT.

Steve says BUT YOU WOULDN'T BE TAKING
SHOTS FROM PEOPLE SAYING
YOU'RE PANDERING TOO MUCH TO
THE RICH AND BETTER OFF
BY GIVING, YOU KNOW, 20, 30
PERCENT TAX CUTS TO PEOPLE
WHO DON'T NEED IT, HAD
YOU GONE THAT ROUTE.

Ernie says I DON'T THINK - I KNOW
THAT WE HAVE GIVEN
A TAX REDUCTION TO EVERY
SINGLE ONTARIO TAXPAYER,
AND THE WELL-TO-DO
ARE GETTING LESS
OF A TAX REDUCTION,
ON A PERCENTAGE BASIS,
THAN THE MIDDLE AND MORE
MODEST INCOME PEOPLE.
AND WE'VE DESIGNED THE
TAX REDUCTION EXACTLY
THAT WAY FOR THAT REASON.
SO 91 PERCENT OF TAXPAYERS
IN THE PROVINCE OF ONTARIO
WILL RECEIVE A 30 PERCENT
OR GREATER TAX REDUCTION.

Steve says LET ME JUST GO - CAN I GET
20 SECONDS FROM EACH OF YOU
ON THUMBNAIL IMPRESSIONS
AND A GRADE OUT OF TEN.
HUGH, LET ME
START WITH YOU.
THUMBNAIL IMPRESSION,
AND A GRADE OUT OF TEN
ON ERNIE EVES'
FIRST BUDGET.

Hugh is in his forties, clean-shaven, with short brown hair. He is wearing a gray suit, white shirt, brown tie and glasses.
The caption changes to “Hugh Mackenzie. Ontario NDP Activist.”

Hugh says WELL, I'D GIVE IT
LOTS OF STYLE POINTS.
I THINK IT WAS WELL PUT
TOGETHER TO CREATE
THE IMPRESSION THAT IT
WAS DESIGNED TO CREATE.
I THINK IN ASSEMBLING THE
WHOLE THING THEY WERE TRYING
TO OFFSET THE NEGATIVE
IMPRESSION THEY WERE GETTING
FROM SOME OF THE CUTS, AND
THEY WERE TRYING TO CUT
SOME OF THE CRITICISM
ABOUT THE REGRESSIVITY
OF THE INCOME TAX CUT.

Steve asks WHAT WOULD YOU
GIVE IT OUT OF TEN?

Hugh says ON STYLE POINTS,
I'D GIVE IT AN EIGHT.
ON SUBSTANCE, I'D
GIVE IT ABOUT A THREE.

Steve says PATRICK?

Patrick is in is fifties, clean-shaven, with short gray hair. He is wearing a plaid brown suit, gray shirt and glasses.
The caption changes to “Patrick Gossage. Liberal Activist.”

Patrick says WELL, I HAVE TO BE
SELF-INTERESTED.
I THINK THE SMALL BUSINESS
STUFF IS QUITE GOOD,
AND MAYBE WE CAN TALK
ABOUT THAT A LITTLE LATER.
ON THE SMALL BUSINESS
STUFF, I'D GIVE THEM
ABOUT A SIX OR SEVEN.
I THINK THE KIND OF PROVINCE
THAT IT'S GOING TO CREATE
IS NOT PARTICULARLY A
PROVINCE I WANT TO LIVE IN.
I'M VERY, VERY WORRIED
ABOUT A DEFICIT
THAT ISN'T GOING
TO DISAPPEAR.
AND I THINK,
ALTHOUGH I FEEL GOOD,
AND A LOT OF MY FRIENDS IN
BUSINESS FEEL GOOD BECAUSE,
HEY, WE'RE GETTING A TAX
BREAK FOR THE FIRST TIME
IN YEARS, I DON'T QUITE SEE HOW
THAT CONFIDENCE IS GOING TO
TRICKLE DOWN INTO MAKING
ME WANT TO CREATE JOBS.

Steve asks OUT OF TEN?

Patrick says FOR A SMALL BUSINESSMAN
I'D GIVE IT A SEVEN.
AS A CITIZEN OF THE PROVINCE,
I'D GIVE IT ABOUT A SIX.

Steve says JANE, YOU'RE NOT ALLOWED
TO SAY TEN OUT OF TEN,
SO THINK OF
SOMETHING ELSE.

Jane is in her fifties, has short gray hair, and is wearing a beige suit, and a flowery scarf.
The caption changes to “Jane Pepino. Ontario Tory Activist.”

Jane says WELL, TO MOVE AWAY FROM THE
MARKING SCHEME FOR A MINUTE,
BUT TO FOLLOW UP ON
SOMETHING THAT PATRICK SAID,
I THINK THERE ARE SOME VERY
IMPORTANT FEEL-GOOD THINGS
HERE THAT ARE REAL.
A VERY MAJOR SUPPORT
TO CHILDCARE.
MAJOR INVESTMENT
IN CHILDCARE.
CLEAR REINVESTMENT
IN HEALTH.
IT'S NOT JUST THE JOB
CREATION PACKAGE.
I THINK WE HAVE TO BE
VERY CLEAR ON ALL
THE OTHER THINGS THAT
WERE PART OF IT, AS WELL.
AND I THOUGHT THERE WERE SOME
VERY EXCITING THINGS THERE.
THE SIMPLE LAND TRANSFER TAX
FORGIVENESS FOR UP TO 200,000 DOLLARS.
I THINK THAT'S GOING TO BE
A TREMENDOUS SUPPORT
FOR PEOPLE WHO WANT TO
BUY THEIR FIRST HOME,
AND HAVE IT BE AFFORDABLE
AND WITHIN REACH.

Steve says LET ME GO TO THAT
OPTIONS' QUESTION AGAIN.
GOVERNMENTS ARE TRYING TO
CREATE JOBS, OBVIOUSLY,
AND SO IS THE
PRIVATE SECTOR.
ONE OF THE IDEAS THAT HAS
GOTTEN A LOT OF CURRENCY
LATELY IS SOMEHOW
SHORTENING THE WORK WEEK,
OR SHORTENING THE
LENGTH OF THE WORK WEEK.
DID YOU CONSIDER GIVING
TAX BREAKS TO COMPANIES
THAT MAYBE WENT TO A
FOUR-DAY WORK WEEK,
OR SOMETHING LIKE THAT?

Ernie says NO, WE DID NOT.
WE FELT IT WAS MORE IMPORTANT
TO GIVE A TAX BREAK TO EVERY
SINGLE ONTARIO TAX PAYER.
WE FIRMLY BELIEVE THAT NO
MATTER HOW THE PEOPLE CHOOSE
TO SPEND MORE OF THEIR MONEY,
AND SOMETIMES I THINK,
GOVERNMENTS FORGET THAT
IT IS THE PEOPLE'S MONEY,
THEY'VE EARNED IT.
WE'RE JUST NEGOTIATING WHAT
SHARE THE GOVERNMENT
IS TAKING AWAY
FROM THEM.
IF WE LEAVE MORE OF THEIR
MONEY IN THEIR HANDS,
THEY WILL SPEND IT MUCH MORE
WISELY, TO SUIT THEIR NEEDS,
THAN ANY GOVERNMENT COULD
EVER DREAM OF DOING.
AND THAT WILL, IN TURN,
CREATE ECONOMIC ACTIVITY.
I DON'T CARE WHETHER
THEY SPEND IT ON
GOODS AND SERVICES IN
THE PROVINCE OF ONTARIO,
WHICH OBVIOUSLY WOULD
BE OUR FIRST PREFERENCE,
BUT IF THEY USE IT
TO PAY DOWN DEBT,
THEIR DISPOSABLE INCOME,
IN THE LONG RUN,
IS GREATER, OF COURSE.
AND THAT MONEY, OF
COURSE, RECIRCULATES
IN THE CAPITAL MARKETS.
AND THE SAME WITH
SAVING OR INVESTING IT.
THE MONEY RECIRCULATES.

Hugh says YOU KNOW, ONE OF THE THINGS
THAT REALLY DISTURBS ME
ABOUT THE WAY THE TAX CUT
IS DESCRIBED IS THAT THESE
THINGS ARE DESCRIBED AS IF
NOBODY IN THE PAST HAS EVER
KNOWN ANYTHING ABOUT WHAT
THE IMPACT OF A TAX CUT
IS ON THE ECONOMY.
IN FACT, WE KNOW
QUITE A BIT ABOUT IT.
WE KNOW WHEN YOU
CUT INCOME TAX,
DEPENDING ON WHICH
ECONOMIST YOU ASK,
THAT EVERY BILLION DOLLARS
THAT YOU CUT IN INCOME TAX
IS GOING TO GENERATE
ABOUT 10,000 JOBS.
WE ALSO KNOW IF YOU CUT
SPENDING BY A BILLION
DOLLARS, YOU LOSE BETWEEN
30- AND 40,000 JOBS.
SO THE BOTTOM LINE, FOR ME,
IS THAT IF YOU'RE TAKING
5 BILLION DOLLARS OUT OF THE
REVENUE STREAM,
AND YOU'RE STILL PROMISING
TO BALANCE THE BUDGET,
MY ARITHMETIC TELLS YOU
THAT ONE WAY OR THE OTHER,
THERE HAS GOT TO BE AN
ADDITIONAL 5 BILLION DOLLARS TAKEN
OUT OF THE SYSTEM
BETWEEN NOW AND THE END
OF THIS GOVERNMENT'S
MANDATE.
AND THAT MEANS THIS IS GOING
TO BE A LOSER OF JOBS,
NOT A NET CREATOR
OF JOBS.

Steve says YOU HAVE STUDIOUSLY DECLINED
TO ACKNOWLEDGE THAT IN
ANY OF THE INTERVIEWS I'VE
SEEN ALL THE WAY ALONG.
YOU HAVE STUDIOUSLY
AVOIDED SAYING,
YES, THERE WILL BE MORE
CUTS, AND I'M TALKING
MULTI-BILLION DOLLAR CUTS
SOMEWHERE IN THE FUTURE.

Ernie says WE FIRMLY BELIEVE THAT
OVER THE COURSE OF YEARS,
THIS TAX CUT WILL MORE
THAN PAY FOR ITSELF.
AS A MATTER OF FACT, THE
PREVIOUS ADMINISTRATION,
THE RAE GOVERNMENT,
RAISED TAXATION RATES
TO WHAT THEY THOUGHT
WOULD GENERATE
AN ADDITIONAL 4 BILLION DOLLARS
IN REVENUE.
AND WHAT THEY ENDED UP WITH
WAS OVER A BILLION DOLLARS
LESS IN REVENUE BY
RAISING TAXATION RATES.
THERE COMES A POINT WHEN YOU
CAN RAISE TAXES TO A POINT,
AND I THINK WE OBVIOUSLY
WENT PAST THAT POINT
IN THE PROVINCE OF
ONTARIO.
I KNOW THERE ARE
OTHERS THAT DISAGREE.
IF YOU HAVE 65 TAX
INCREASES IN TEN YEARS,
11 IN PROVINCIAL
INCOME TAXES ALONE,
AND YOU BECOME THE SECOND
HIGHEST TAXED JURISDICTION
IN NORTH AMERICA, YOU BECOME
UNCOMPETITIVE VERY QUICKLY,
NOT ONLY WITHIN
YOUR OWN COUNTRY,
BUT INTERNATIONALLY,
AS WELL.
AND PEOPLE SIMPLY DO NOT
WANT TO LOCATE, EXPAND.
THE INCENTIVE
IS NOT THERE.
YOU'RE NOT REWARDING
INITIATIVE.
YOU'RE NOT GIVING PEOPLE
REASON FOR EXPANDING BUSINESS,
BE IT LARGE OR SMALL, IN
THE PROVINCE OF ONTARIO.

Steve asks HOW BIG WILL THIS ECONOMY
HAVE TO GROW IN ORDER FOR YOU
TO GET THAT TAX CUT
TO PAY FOR ITSELF?
I KNOW YOU'RE PROJECTING
SOMETHING LIKE 3 PERCENT
NEXT YEAR, AND THAT DOESN'T
SEEM TO ME TO BE ENOUGH.

Ernie says WE'RE PROJECTING, ACTUALLY,
IN THE BUDGETARY DOCUMENT,
WE'RE TALKING ABOUT A 1.9
PERCENT GROWTH OF GDP NEXT YEAR.
NOW, IN EVERY FIGURE
THAT WE'VE PUT FORWARD,
ALBEIT A RATHER SMALL
STATEMENT ON JULY 21ST,
OR NOVEMBER 29TH, WE'VE
DELIBERATELY TRIED TO CHOOSE
VERY CAUTIOUS AND PRUDENT
TARGETS AND NUMBERS.
AND I THINK WE'LL
CONTINUE TO DO THAT.
THE ONTARIO FINANCIAL REVIEW
COMMISSION ADVISED THAT.
WE HAVE A CONTINGENCY RESERVE
FUND SET ASIDE FOR THE FIRST
TIME IN THE PROVINCE'S
HISTORY OF 650 MILLION DOLLARS.

Steve says IT'S HARD TO BELIEVE THAT
1.9 PERCENT ECONOMIC GROWTH
CAN PAY FOR A TAX CUT.

Patrick says IT CAN'T.

Ernie says BUT YOU'RE ONLY
TALKING, FIRST OF ALL,
IT'S GOING TO
TAKE THREE YEARS
TO FULLY IMPLEMENT
THE TAX CUT.
WE'RE TALKING
ABOUT THIS YEAR,
IT'S GOING TO COST THE
PROVINCE OF ONTARIO,
IF YOU WANT TO LOOK
AT IT THAT WAY,
WE'RE NOT LOOKING AT
IT THAT WAY, IN FACT,
WE'LL COME TO THAT IN
A MINUTE; THE REVENUE,
IF YOU WANT TO PUT
IT THAT WAY FOREGONE,
IN THIS PHYSICAL YEAR,
WILL BE 1.12 BILLION DOLLARS.
THE WAYS IT'S
BEEN IMPLEMENTED.
REVENUES ARE GOING TO BE
DOWN, WE GUESSTIMATE,
IN THE PROVINCE OF ONTARIO.
BUT IT'S ALSO IMPORTANT
TO REMEMBER, OF COURSE,
TRANSFER PAYMENTS ARE DOWN
FROM THE FEDERAL GOVERNMENT
BY 1.2 BILLION DOLLARS IN THE
PROVINCE OF ONTARIO.
WE DON'T THINK
REVENUES WILL BE DOWN
ANYWHERE NEAR THAT MUCH.
I WAS INTERESTED IN HUGH'S
COMMENT A FEW MOMENTS AGO
ABOUT THE NUMBER OF
JOBS THAT ARE LOST,
THE NUMBER OF JOBS THAT ARE
GAINED BY DOING THIS OR THAT.
THE PROVINCE OF ONTARIO'S
BUSINESS COMMUNITY,
IN THE LAST PRIVATE
ENTERPRISE,
IN THIS PROVINCE, IN THE
LAST NINE MONTHS HAS CREATED
90,000 NET JOBS IN
THE PRIVATE SECTOR.
THAT'S 10,000 A
MONTH, OR 300 A DAY.
AND YES, THERE HAVE BEEN
SOME PUBLIC SECTOR JOBS LOST
TO BOTH THE FEDERAL AND
PROVINCIAL GOVERNMENT
REDUCTIONS IN THE SIZE
OF THEIR WORKFORCE.

Steve says AND THIS IS BEFORE ANY
TAX CUT HAS KICKED IN.

Ernie says THIS IS BEFORE
ANY TAX CUT.
BUT PRIVATE JOB CREATION
IS OUTNUMBERING
THOSE REDUCTIONS
ALMOST FOUR TO ONE.

Steve says LET ME TALK TO THE ONLY GUY
AT THIS TABLE WHO'S ACTUALLY
POTENTIALLY GOT A CHANCE
TO CREATE SOME JOBS HERE.
GOSSAGE, YOU'RE A SMALL
BUSINESS OPERATOR.
HE'S GIVING
YOU A HOLIDAY.
NOT A HOLIDAY, YOU'RE CUTTING
THE 200,000 DOLLARS ON PAYROLL.
YOU WON'T HAVE TO PAY THAT
EMPLOYER HEALTH TAX ANYMORE.
YOUR REVENUES AREN'T ABOVE
200 GRAND, ARE THEY?

Patrick says NO, THEY ARE IN
FACT UNDER 250,000.

Steve says IN WHICH CASE -

Hugh says IT'S NOT REVENUE,
IT'S PAYROLL.

Steve says THE DAYS OF YOU
PAYING THE EMPLOYER
HEALTH TAX ARE
GONE, RIGHT?

Patrick says YES.

Steve says YOU'RE GETTING
THIS TAX CREDIT.

Hugh says SO AM I, BY
THE WAY.
WE WON'T HAVE TO PAY
EMPLOYER HEALTH TAX
FOR THE NANNY.

Ernie says OKAY.

Steve says YOU'RE GETTING YOUR TAX
CREDIT BECAUSE YOU
ARE PROBABLY GOING TO BRING
ON SOME CO-OP STUDENT
OR SOMETHING LIKE
THAT, RIGHT?
SO YOU GET A TAX
CREDIT FOR THAT.
DO I ASSUME THAT YOU, AS
A SMALL BUSINESS PERSON,
REALLY LIKE WHAT'S
GOING ON HERE?

Patrick says WELL, I DO, FOR
SMALL BUSINESS.
I HAVE TO SAY.
WE WERE PAYING -
I FIGURED IT OUT -
WE'RE GOING TO SAVE ABOUT
2- OR 3,000 DOLLARS BECAUSE
OUR EMPLOYEE TAX CREDIT HAD
ALREADY BEEN REDUCED.
BUT WHAT I FIND
DIFFICULT, AND, YOU KNOW,
I KNOW YOU'RE A
MAN OF GOODWILL,
AND NOW WE KNOW HE
HAS A BIG HEART, TOO.
WHAT I FIND IS
DIFFICULT -

Hugh asks DID YOU PAY HIM
TO SAY THAT?
YES, YOU DID.
HE'S TALKING ABOUT.

Patrick continues WHAT I FIND
DIFFICULT TO ACCEPT,
AND I'M THE BEST PAID PERSON
IN MY FIRM BY A FAIR AMOUNT -
I BUILT THE FIRM, ET CETERA -
WHAT I FIND DIFFICULT TO
ACCEPT, ERNIE, IS MY 3,400 DOLLARS
IS GOING TO SOMEHOW CREATE -
LIKE MY TAX CUT, THAT I
GET, IS GOING TO SOMEHOW
HELP ME CREATE A JOB.
I DON'T UNDERSTAND
THE CONNECTION.
AND YOU MADE IT
THREE TIMES ALREADY,
BETWEEN THE INCOME TAX CUT,
WHICH I'M SORRY TO SAY DOES
BENEFIT ME A LOT MORE THAN
THE PEOPLE WHO WORK FOR ME,
IS GOING TO SOMEHOW INDUCE
ME TO CREATE A JOB,
OR MAKE ME FEEL
GOOD OR SAY, HOORAY.

Steve says IT'S THE OTHER STUFF THAT'S
SUPPOSED TO INDUCE YOU
TO CREATE JOBS.
HIS POLITICAL
SURVIVAL -

Patrick says NO, NO, HOLD ON.

Steve continues HIS POLITICAL SURVIVAL
DEPENDS ON YOU TAKING YOUR
TAX CREDIT, AND YOUR
EMPLOYER HEALTH TAX
VACATION AND
HIRING PEOPLE.

Patrick says WELL, FIRST OF ALL, THERE
ISN'T THE MONEY THERE TO DO IT.
BUT I JUST WANT TO KNOW HOW
THE TRICKLE DOWN EFFECT WORKS
FROM PEOPLE LIKE MYSELF,
WHO MAKE OVER 100,000 DOLLARS.

Hugh says YOU'VE GOT TO BELIEVE.

Patrick says SERIOUSLY, ERNIE, I DON'T
FEEL SO GOOD TODAY - I DON'T
FEEL SO MUCH BETTER TODAY
THAN I DID A WEEK AGO THAT
I'M GOING TO SAY, HEY,
ONTARIO'S CHANGED.
THIS IS WHAT CATHERINE
SWIFT IS TELLING US,
WE'RE ALL GOING
TO FEEL SO GOOD,
THAT I AM GOING TO GO OUT
AND EXPAND MY BUSINESS.

Steve says JANE, YOU GET IN HERE.

Jane says NO, BUT THE FACT IS -

Patrick says I ASKED HIM A QUESTION.

Jane says YOU MIGHT GET
YOUR HOUSE PAINTED.
SORRY, GO AHEAD,
YOU'RE THE EXPERT.

Ernie says I'M NOT AN EXPERT,
I'M FAR FROM IT,
AS THEY'VE LEARNED FROM
TALKING TO THE PEOPLE
AT FINANCE, AND OTHER
FORECASTERS.
HOWEVER, I THINK THERE
ARE SEVERAL FACTORS HERE.
I THINK YOU HAVE TO TAKE
THE PACKAGE AS A WHOLE.
AND NO MATTER WHAT PEOPLE DO
WITH THAT MONEY, IT CREATES,
OR STIMULATES ECONOMIC
ACTIVITY ONE WAY OR ANOTHER.
THE CANADIAN FEDERATION
OF INDEPENDENT BUSINESS -
YOU MENTIONED CATHERINE
SWIFT A FEW MOMENTS AGO -
THEY DID A SURVEY OF SMALL
BUSINESSES, A FEW WEEKS AGO,
AND THEIR INDEPENDENT
SURVEY SHOWS THAT 80,000
SMALL BUSINESS ENTREPRENEURS
IN THE PROVINCE OF ONTARIO,
INDICATE IF THEY WERE
GIVEN A 30 PERCENT PERSONAL
INCOME TAX REDUCTION, THEY
WOULD HIRE ONE MORE POSITION.

Patrick says THE LOGIC ESCAPES ME.

Ernie continues NOW, YOU'RE GOING TO
HAVE TO DISPUTE THAT
WITH AN INDEPENDENT SURVEY DONE
BY A TOTALLY INDEPENDENT BODY.

Patrick says IT IS A MOOD THING,
YOU MUST ADMIT.
IT'S MORE A MOOD
THING, DON'T YOU AGREE?

Ernie says THERE IS A LOT TO BE SAID
FOR THE PSYCHOLOGICAL EFFECT
OF PEOPLE KNOWING THERE
IS A GOVERNMENT IN PLACE
THAT UNDERSTANDS THEY'VE BEEN
OVERTAXED, OVERBURDENED,
OVER-REGULATED.

Patrick says AND I'VE TAKEN THE RISKS,
I DESERVE MORE REWARD,
AND ALL THAT
KIND OF STUFF.

Ernie says BUSINESS COMMUNITY
CONFIDENCE, I THINK,
HAS DEMONSTRATED IN THE
LAST SEVERAL MONTHS
THAT IT IS PICKING UP.
BUT CONSUMER CONFIDENCE,
QUITE FRANKLY,
IS LAGGING BEHIND.

Steve says HUGH?

Hugh says I THINK THE MOST IMPORTANT
WORD IN ALL OF THE STATEMENTS
THAT SPOKESMEN FOR THE
GOVERNMENT HAVE BEEN MAKING
ABOUT THE TAX CUT, AND THE
GENERAL BUDGETARY POLICIES
BELIEVE EVERY TIME YOU TALK
ABOUT THE JOB CREATION
POTENTIAL, YOU
SAY CAREFULLY,
WE BELIEVE THIS IS
GOING TO HAPPEN.
I HEARD DAVE JOHNSON SAYING
THE GOVERNMENT BELIEVES
THIS IS GOING TO HAPPEN.
AND I THINK WHAT THAT
REALLY MEANS IS THAT
IT IS A LEAP OF FAITH.
I'M SORRY, YOU CAN'T FIND
THE EVIDENCE ANYWHERE.
YOU WON'T BE ABLE TO FIND
ANYBODY WHO STUDIES
THE IMPACT OF PUBLIC FINANCES
ON THE ECONOMY WHO WILL SAY
THIS KIND OF FISCAL IMPACT,
THIS KIND OF JOB AND
ECONOMIC DEVELOPMENT
IMPACT CAN BE DERIVED
FROM THE FISCAL POLICIES
OF THIS GOVERNMENT.

Steve says YOU WILL FIND
PEOPLE WHO SAY,
YOU'VE GOT TO GIVE
THIS A CHANCE.
WE DID A PHONE-IN
THE OTHER NIGHT,
AND PEOPLE WERE
CALLING IN AND SAYING,
I DON'T KNOW IF THIS
IS GOING TO WORK,
BUT WE'VE GOT TO
GIVE IT A CHANCE.

Jane says WE KNOW THE OTHER
THING DOESN'T WORK.
AND YOU KNOW WHAT, HUGH,
YOU'RE LOOKING FOR AN
ECONOMIST KIND OF
EVIDENCE.
AND AT THE END OF THE
DAY, JUST THINK ABOUT,
AS A CONSUMER
AND AS A CITIZEN.
IF YOU'VE GOT AN EXTRA
THOUSAND DOLLARS IN YOUR
POCKET THAT YOU DIDN'T
PREVIOUSLY HAVE,
YOU WILL CREATE A JOB.
YOU WON'T NECESSARILY GO OUT
AND HIRE ANOTHER PERSON,
BUT YOU MIGHT HAVE
SOMEBODY PAINT YOUR HOUSE,
AND THAT'S A SUMMER JOB
FOR A STUDENT WHO MIGHT
NOT HAVE OTHERWISE
HAVE COME.

Hugh says I'M NOT SAYING NO
JOBS WILL BE CREATED.

Jane says WELL, GOOD.

Hugh continues WHAT I'M SAYING IS THAT IF
YOU TAKE THE TAX CUT TOGETHER
WITH THE EXPENDITURE CUTS,
YOU MATCH THE TAX CUT
WITH THE PROMISE TO
BALANCE THE BUDGET,
AT THE END OF THE DAY, WE ARE
GOING TO BE LOSERS IN JOBS.

Jane says BUT, HUGH, DOES THIS MEAN
IF THE NDP GOVERNMENT
COMES BACK IN YOU
GUARANTEE A TAX RAISE?
AND THROUGH THE TAX RAISE
THAT'S THE ONLY WAY
WE'LL GET JOBS?
THAT'S GOT TO BE
THE LOGICAL OUTCOME
OF THE LOGIC
YOU'RE APPLYING.

Ernie says THAT'S VERY INTERESTING
BECAUSE BOTH OPPOSITION LEADERS
WERE ASKED EXACTLY THAT
QUESTION, I UNDERSTAND,
IN THEIR SCRUMS
IN THE LOCK UP,
AND NEITHER ONE OF THEM REFUSED
TO GIVE A DIRECT ANSWER.
I WONDER WHY?
YOU AND I BOTH KNOW THEY
ARE NOT GOING TO RAISE
THE TAXATION LEVELS BACK
TO THE LEVELS THEY WERE,
IF THEY ARE SO FORTUNATE
AS TO FORM THE GOVERNMENT.

Patrick says NO, THAT IS THE
REAL REVOLUTION.
THE REAL REVOLUTION,
IN FACT, IS THAT
WE'VE GOT THIS FOREVER.

Jane says YES.
AND BRAVO.

Ernie says AND YOU'RE
BETTER OFF FOR IT.

Patrick says BUT I DON'T NEED
IT, ERNIE.

Hugh says THAT IS THE REAL
REVOLUTION.
I DON'T OFTEN AGREE WITH
THINGS JOHN CRISPO SAYS.

Patrick says THAT'S TRUE.

Hugh continues BUT IN THE LITTLE PIECE IN
THE STAR
A WEEK AGO WHERE
THEY INTERVIEWED THREE
DIFFERENT PEOPLE ABOUT WHAT
THEY WERE GOING TO DO WITH
THEIR TAX CUTS, HE SAID, THAT,
YOU KNOW, HE WAS GOING
TO BUY A LAWN TRACTOR,
OR SOMETHING LIKE THAT.
BUT THEN HE SAID, AT
THE END OF THE DAY,
WHAT THIS IS REALLY ABOUT
IS NOT ABOUT CREATING JOBS,
IT'S NOT ABOUT
GIVING ME A TAX CUT,
IT'S ABOUT MAKING GOVERNMENT
SMALLER BY REDUCING
ITS CAPACITY
TO DO THINGS.
AND I AGREE
THAT'S RIGHT.
THAT'S EXACTLY
WHAT YOU'RE DOING.
AND THAT'S FUNDAMENTALLY WHY
I THINK IT'S A REALLY BAD IDEA.

Steve asks DO YOU AGREE WITH HIM, THAT
THAT'S WHAT YOU'RE DOING?

Ernie says NO, I THINK WE ARE DOING
BOTH THINGS IN CONCERT.
AND I THINK YOU
HAVE TO DO BOTH.
AND YOU TALK ABOUT
EMPIRICAL EVIDENCE.
WELL, FILED WITH THE BUDGET,
OF COURSE, IS 150 PAGES
OF BACKGROUND INFORMATION,
ONE OF WHICH IS A STUDY
OF 100 INDUSTRIALIZED
NATIONS IN THE WORLD.
AND THE NATIONS WHOSE
ECONOMIES GROW THE RAPIDEST,
BEYOND ANY DOUBT, BY THIS
EMPIRICAL EVIDENCE, NOT OURS,
THEIRS, INDEPENDENT STUDY,
ARE THE NATIONS WHO REDUCE
THE SIZE AND COST
OF GOVERNMENT,
AND AS A PERCENTAGE
OF THEIR GDP,
GOVERNMENT OR PUBLIC
SECTOR IS SMALLER,
THEY ARE THE NATIONS
THAT PROSPER.
THEIR ECONOMIES PROSPER
AND GROW THE LARGEST,
SUCH AS HONG KONG,
SINGAPORE, UNITED STATES,
NEW ZEALAND, AND OTHERS.

Steve says THE LAST POLITICIAN
WHO MENTIONED SINGAPORE
GOT INTO A WHOLE
LOT OF TROUBLE.
I THINK IT WAS
ART HANGER.
BUT IT RAISES A QUESTION,
HOW SMALL DO YOU WANT
THE ONTARIO
GOVERNMENT TO BE?
RIGHT NOW, YOU'RE SPENDING
ABOUT 42 BILLION DOLLARS A YEAR
ON PROGRAMS FOR THE
PEOPLE OF ONTARIO.
IS THAT NUMBER
STILL TOO HIGH?

Ernie says WELL, I THINK THE IMPORTANT
PART IS TO RESTRUCTURE
AND RETHINK WHAT SERVICES
GOVERNMENT PROVIDES
TO ITS CONSTITUENCY.
AND OBVIOUSLY, AS
CANADIANS AND ONTARIANS,
I THINK WE WOULD ALL SITTING
AROUND THIS TABLE AGREE,
THAT THERE IS SOME
FUNDAMENTAL DIFFERENCES
BETWEEN, SAY, CANADIANS
AND AMERICANS.
WE HAVE ONE OF THE BEST
HEALTHCARE SYSTEMS
IN THE WORLD, AND WE DO
NOT PLAN ON TOUCHING THAT.
IN FACT, THIS
YEAR, AS YOU KNOW,
THE HEALTHCARE BUDGET
IS 17.7 BILLION DOLLARS.
WE HAVE A GREAT PUBLIC
EDUCATION SYSTEM
IN THIS PROVINCE, ONE OF
THE BEST IN THE WORLD.
NOT TO SAY IT
CAN'T BE BETTER.
JOHN SWEENEY, A GOOD FORMER
LIBERAL CABINET MINISTER
PRODUCED AN INDEPENDENT
REPORT FOR THE FORMER NDP
GOVERNMENT SUGGESTING AS
MUCH THAT HAS 47 CENTS
OUT OF EVERY DOLLAR SPENT
IN EDUCATION IS SPENT
OUTSIDE THE CLASSROOM.
NOW, I UNDERSTAND THAT
SOME OF THAT IS NECESSARY,
BUT IS 47 CENTS NECESSARY TO BE
SPENT OUTSIDE THE CLASSROOM?
I ALWAYS THOUGHT EDUCATION WAS
ABOUT EDUCATING YOUNG PEOPLE.
AND THAT'S WHERE I WANT TO
SEE THOSE DOLLARS DIRECTED.

Steve says I'M TOLD YOU'RE
NOT AN IDEOLOGUE.
I'M TOLD YOU REALLY
ARE A COMMON SENSE GUY.

Ernie says ABSOLUTELY NOT.

Steve says SO TELL ME IN SORT OF COMMON
SENSE PARLANCE WHETHER
OR NOT THE GOVERNMENT OF
ONTARIO IS STILL TOO BIG,
OR DOES IT NEED TO
BE DOWNSIZED MORE?

Ernie says WELL, WITH OR WITHOUT
THE REDUCTION EXERCISE,
WE'RE GOING THROUGH, I THINK
THE REDUCTION EXERCISE
WE'RE GOING THROUGH
IS VITAL TO SHAPING -
CHANGING THE SHAPE OF
THE ONTARIO ECONOMY.
I THINK WE HAVE DONE
QUITE A BIT, ACTUALLY.
IN FACT, SOME PEOPLE
SAY WE'VE MOVED
FAR TOO QUICKLY
IN THAT AREA.
HOWEVER, I DON'T BELIEVE
THAT IS THE CASE.
WE STILL HAVE TO DELIVER
ON THE REMAINING PART
OF OUR TARGETS OF IDENTIFIED
5.4 BILLION DOLLARS REDUCTION
ON AN ANNUALIZED BASIS
IN EXPENDITURES
IN THE PROVINCE
OF ONTARIO.
WE ANNOUNCED THOSE ON
NOVEMBER 29TH OF LAST YEAR.
AS DAVE JOHNSON ANNOUNCED
IN THE HOUSE ABOUT TWO OR
THREE WEEKS AGO, WE'RE ABOUT
HALFWAY TOWARDS MEETING
THAT TARGET, BUT WE STILL HAVE
THE REST OF THIS FISCAL YEAR,
AND ALL OF NEXT FISCAL
YEAR TO IDENTIFY THOSE.

Patrick says DON'T YOU THINK - AND THIS
MAY SOUND LIKE A BROKEN RECORD,
BUT DON'T YOU THINK IN THE
END YOU'RE GOING TO WEAR
SOME OF THE, REALLY
WHAT'S TURNING OUT TO BE
RATHER MISERABLE MEAN
STREETS OF TORONTO,
PARTICULARLY, AND SOME OF
OUR OTHER MAJOR CENTRES,
THAT YOU'RE GOING TO
START TO WEAR THAT?
IT'S FUNNY, WE SIT HERE, AND
WE TALK RATHER STERILEY
ABOUT NUMBERS AND SO
ON AND SO FORTH,
WHAT'S CAPTURING THE
ATTENTION OF THE PEOPLE
IN TORONTO, ASIDE
FROM THE BUDGET -
YOU GOT GOOD COVERAGE -
IS THESE KIDS CAMPED OUT
IN NATHAN PHILLIPS SQUARE.
WHAT CAPTURES ME EVERY
DAY I GO TO WORK
IS THE NUMBER OF
STREET PEOPLE.
AND IT MAKES ME FEEL KIND
OF GUILTY ABOUT TAKING
MY MONEY, IS THAT THE STREET
PEOPLE HAVE INCREASED.
THAT IT'S A MEANER CITY.
AND, YOU KNOW, PEOPLE CONNECT
THAT TO YOUR WELFARE CUTS.
AND IF THEY CONNECT THE
WELFARE CUTS TO PATRICK GOSSAGE
AND MAYBE A COUPLE OF US
OTHERS GETTING A TAX BREAK,
I MEAN, IF PEOPLE
PUT ALL THAT TOGETHER,
DON'T YOU THINK THAT'S
SOMETHING THAT'S GOING TO BE
DIFFICULT TO DEAL
WITH IN THE FUTURE,
AND, IN FACT, YOU'RE
GOING TO HAVE TO RESTORE
SOME OF THE WELFARE CUTS?

Ernie says WELL, OBVIOUSLY, OUR
OPPOSITION POLITICALLY
WOULD LIKE PEOPLE
TO BELIEVE THAT.
BUT IT IS A TWO-PART
EXERCISE.

Patrick says WHILE THE ECONOMY
HAS IMPROVED,
AND I'M DOING BETTER,
THE RICH GET RICHER,
AND THE POOR GET POORER,
AND THE WORKING POOR
ARE GETTING POORER.

Ernie says NO, IF THE ECONOMY
IMPROVES, PATRICK,
MORE PEOPLE WILL
HAVE JOBS.

Patrick says THEY DON'T GET PICKED
UP BECAUSE THAT'S WHAT
GOVERNMENT IS FOR,
ERNIE, ISN'T IT?
ISN'T GOVERNMENT
FOR REDISTRIBUTION?

Ernie says IN THE LAST SEVEN MONTHS
ALONE, THERE HAVE BEEN
75,000 NET NEW JOBS CREATED
IN THE PROVINCE OF ONTARIO
WITHOUT THIS STIMULUS.

Steve says ARE THEY GOOD
JOBS, Mr. EVES?
DO WE KNOW IF THOSE
ARE GOOD JOBS?

Ernie continues I MIGHT ADD, IN THE
PRECEDING SIX YEARS,
THERE WASN'T ONE SINGLE
NEW NET JOB CREATED
BY THE PREVIOUS ADMINISTRATION,
OR THE LAST YEAR
OF THE LIBERAL
GOVERNMENT BEFORE THAT.
NOT ONE.
AND 75,000 HAVE BEEN CREATED
IN THE LAST SEVEN MONTHS.

Steve says I NEED TO KNOW MORE ABOUT
ARE THESE MUCK JOBS,
OR ARE THESE GOOD
JOBS, GOOD WAGES,
GOOD BENEFITS,
AND ALL OF THAT?

Ernie says THESE ARE DECENT,
LONG-TERM JOBS.

Steve asks DO WE KNOW THAT?

Jane says THE HONDA EXPANSION.

Patrick says YOU CAN'T TAKE
CREDIT FOR THAT.
NOW, LET'S GET
SENSIBLE.

Ernie says WELL, LET'S TALK
ABOUT MAGNA THEN.
WHERE THE SPOKESPERSON
FOR MAGNA CORPORATION,
PUTTING A TRUCK FRAME PLANT
IN St. THOMAS, ONTARIO,
CAME OUT UNEQUIVOCALLY AND
SAID, DUE TO THE POLICIES
OF THE CURRENT
ONTARIO GOVERNMENT,
AND THE DIRECTION THAT THE
FEDERAL GOVERNMENT OF CANADA
IS GOING IN, WE HAVE
DECIDED TO LOCATE
IN THE PROVINCE
OF ONTARIO.
AND THAT WAS A VERY
IMPORTANT CRITERIA
IN US CHOOSING
WHERE WE LOCATE.

Patrick says I GUESS WHAT I AM TALKING
ABOUT ARE THE WORKING POOR
ARE IN OUR FACE THE WAY THEY
NEVER HAVE BEEN BEFORE.

Ernie says BUT THE BEST WAY TO HELP
THOSE PEOPLE, PATRICK,
IS TO PROVIDE MORE JOB
OPPORTUNITIES FOR THEM
IN THE PRIVATE SECTOR.

Patrick says YEAH, BUT IF YOU'VE
TAKEN AWAY TRAINING,
AND YOU'RE CHARGING
400 DOLLARS MORE FOR -

Jane says AND A LITTLE BIT MORE
MONEY IN THEIR POCKET.
BECAUSE IF THEY
ARE WORKING POOR,
THEY WILL GET THE BENEFIT
OF THAT TAX CUT, AS WELL.

Patrick says OH YEAH, THEY
GET 50 BUCKS.
COME ON.

Ernie says IT'S A MUCH
LARGER PERCENTAGE.
[all arguing]

Steve says LESS THAN A
MINUTE, FOLKS.

Jane says EXCUSE ME, PATRICK, IF THERE
HAD BEEN A REDUCTION
IN THE PROVINCIAL SALES TAX,
THOSE PEOPLE, I DON'T THINK,
THERE WOULD HAVE BEEN THE
OUTCRY FROM THE PEOPLE
TO MY RIGHT TALKING ABOUT THE
UNFAIRNESS OF THAT BECAUSE
THE PEOPLE WHO ARE THE LARGE
CONSUMERS WOULD HAVE GOTTEN
THE BIGGEST BREAK, THAT IS THE
ONES WITH THE HIGHEST INCOME.

Steve says I'VE GOT 20
SECONDS LEFT.
Mr. EVES, HOW LONG IS IT
GOING TO TAKE FOR YOU
TO KNOW WHETHER OR NOT
THIS BUDGET HAS WORKED?

Ernie says I THINK YOU'RE GOING TO
START TO SEE THE EFFECT
OF IT BY THIS
TIME NEXT YEAR.
WE'LL BE SITTING
HERE AND THE PROOF
WILL BE IN
BLACK AND WHITE.

Steve asks YOU COME BACK
NEXT YEAR?

Ernie says ABSOLUTELY.

Steve says TALK TO US ABOUT WHAT A GREAT
SUCCESS THIS BUDGET HAS BEEN?

Ernie says I CERTAINLY HAVE THE
BELIEF THAT THAT'S
WHAT WE'RE GOING
TO BE DOING.
I HAVE NO REASON TO BELIEVE
WE WILL NOT EXCEED
OUR TARGET SET
IN THE BUDGET.

Steve says MINISTER OF FINANCE FOR THE
PROVINCE OF ONTARIO, ERNIE EVES.
GOOD OF YOU TO JOIN US.
THANKS SO MUCH.

Ernie says THANK YOU.

Steve says AND, TO YOU GUYS, SEE
YOU AGAIN NEXT TIME.

Watch: Ernie Eves on the '96 budget