Monday, November 5, 2012

Tim Hudak Proposes to End Overregulation with More Regulation

Ontario PC Leader, and most likely our next Premier Tim Hudak has released his predictable rehash of the Harris "common sense revolution."  Massive tax cuts are of course there, but it seems Mr. Hudak can't quite decide how best to shovel money at rich people, immediately under his top priority (groan) "Balance the Budget," which has absolutely no plan for doing that, we get "Tax Cuts Create Jobs":
Significantly reduce Ontario tax rates to attract investment, create jobs and expand the economy. Acknowledging Ontario’s debt crisis drastically reduces manoeuvring room to reduce taxes as much as we would like, use this Paths to Prosperity discussion paper to solicit the best advice from Ontario’s businesses, individuals, economists, think tanks and associations on which tax cut would have the most impact on job creation: the corporate income tax, the personal income tax or the provincial portion of the harmonized sales tax.
Why choose Mr. Hudak, you can cut all three!  After all, we are always on the right side of the Laffer curve and tax cuts always increase revenue.  I wonder if the orders of both groups to solicit opinions from (businesses first) and which taxes to cut (corporate taxes first) is a coincidence? 

Ok, I should be fair I'm quoting from the summary web page.  Perhaps the actual white paper PDF gets more heft and detail.  Let's see:
It’s time to be realistic. If you own an elephant and you only have enough rations to feed a horse, it’s time to ask, why do you need the elephant?
Well with logic like that, I'm convinced.   That's from the section on Balancing the Budget (p7), which reads like a high school essay written by an Objectivist.  I really like the random charts and stats which fail to account for relative size.  So PEI's $79M budget deficit looks soooo tiny compared to Ontario's $13B.  Ontario does have a larger deficit per capita, would it have been so hard to be at least minimally intellectually honest and present us some kind of per-capita figure?

 There's a few specific promises (like public sector wage cuts via a "freeze" which is a cut, and rigging arbitration to reliably side against unions) but mostly it is without numbers and the logic amounts to "we must cut government programs to avoid the future need to cut government programs."  

The chart on p8 actually states "Balanced budgets lead to economic growth" through some magic mechanism where the Producers can only create jobs and prosperty for us when they know government's balance sheet is black or something.  Why?  Do they fear eventual tax increases?  I guess that must be it, but I also know from conservatives that you can't raise taxes on the rich because they all just leave or hire super special accountants to get them out of it, so if that's true, why are they so stressed about future tax increases? 

Near the end we have the obligatory section on deregulation, and it's where the title comes from, we will solve over-regulation by regulation of regulations:
  • Reduce the regulatory burden in Ontario by a minimum of 33 per cent (128,750 regulations) over three years. Individual ministers’ cabinet pay would be tied to accomplishing these targets. To prevent future regulatory creep, require that for every new regulation, at least one other must be removed.
  • The Deputy Premier will be appointed the minister responsible for reducing Ontario’s over-regulation. All proposed regulations will be subject to the Deputy Premier’s approval. If the Deputy Premier believes a regulation is anti-competitive, he or she will be required to reject it.
  • All regulations – without exception – will be costed by the Ministry of Finance. This costing would be made public. Require all proposed regulations that the Ministry of Finance finds have a net cost to be subject to a vote in the Legislature.
Ok, this is nuts.  In order:
  • Where does this 33% target come from?  In three years?  This is what Republicans did in the Bush years, even staging press events where they cut up pages of regulation with chain saws.  The outcome was the New Depression of 2008-(not finished).  There is no way you can intelligently reduce regulatory burden this much this fast without unintended consequences.  
  • So if someone invents a new chemical that causes birth defects, we can't regulate its use without repealing the regulation on some other chemical that causes birth defects?  Or repealing the 40 hour work week, or maybe we could stop requiring fire exits?  So many Triangle Shirtwaist fires to create, so little time!  After all, if we've repealed 33% of regulations we must really be down to a list of pretty defensible regulations.  All the easy win clearly outdated regulations will already be gone. 
  • The Deputy Premier becomes the Czar of regulation?  And what does "anti-competitive" mean?  Paid vacation is anti-competitive in all sorts of ways, it doesn't mean Ontarians want to see it repealed.  I'm sure meat plants can pack a lot more meat without "anti-competitve" rules requiring hand washing and making sure the meat is stored at cold enough temperatures.  Every regulation is anti-competitive.  If they weren't, businesses wouldn't need laws to make them do these things.  Stopping the production line because someone lost a finger in the ground meat is anti-competitive, but I really want competition to stop at such times.   
  • Costing regulations is actually not a terrible idea, but having the completely political Ministry of Finance do it makes this a joke.  How many regulations is a conservative Ministry of Finance going to find have a "net" cost?  Think they'll consider lives saved from regulating pollution in their math?  Unlikely.  A non-partisan body reporting to the Legislature, not to the Premier should do this. 
Really, the "repeal one rule for each new one you create" is the stupidest thing in there.

Despite my railing about this, I won't be shocked if this party, rehashing Harris' failed ideas and importing some fresh bad ideas from the US Republicans, forms the next Ontario government.  This document is radical, and I think that's the point.   They sense their long awaited chance is coming.  Hopefully they'll overplay their hand on the crazy ideas and we'll get an NDP government instead.  But they've done so twice already, so they might have learned to stop letting the crazy spill all over the place.  Or the public will simply have too much fatigue with the current government and will vote them in anyway. 

I'm far from a big fan of the current Ontario government, but McGuinty doesn't get nearly enough credit for Canada's relatively better economic performance in the wake of the economic crisis.  Ontario didn't implement stupid austerity in the midst of a damn depression, and at roughly 40% of Canada's GDP, Ontario not laying off tens of thousands of civil servants (like teachers) or cutting the safety net has to have been a big part of Canada weathering the storm.  Stephen Harper certainly owes his 2011 victory to Dalton McGuinty's (general) rejection of austerity in 2009 and 2010. 

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