Budgets: Ontario vs. Alberta

Just the numbers: Yesterday's Alberta 2006 Budget plans to make corporate tax rate 10 percent, the lowest in any province. Meanwhile, you will recall Ontaro reversed tax cuts, cancelled tax credits, and raised taxes by charging a $900 health premium per person in 2004. Well, at the end of the 2005 fiscal year, Ontario has a deficit $2.4 billion. Included in the 2005 financials is a reserve of $1 billion, a contingency fund of $557 million and corporate tax revenue of just under $1 billion. In other words, Ontario could have balanced the budget by using up the reserve and contingency fund. I am not the Ontario premier or an economist. Even so, if trends stay the course and there are no tax cuts announced today, provincial corporate tax and health premium will continue to enrich the Ontario government. Bottom line: The Ontario economy has cruised along quite well, able to take hits like the black out, the border shut-down due to Yellow Alerts in the U.S., and increased health spending and reduced business and tourist spending due to SARS. Alberta may get cheaper; it has also gotten more difficult to find skilled workers. Ontario may lose out in manufacturing jobs; it can yet increase jobs in service industries and in trade. Ontario can take advantage of its international air transport hub in Toronto Pearson airport, free health care covered by OHIP, skilled workers educated by top-notch colleges and universities, and the wealth and diversity of immigrants. If only Ontario can stay competitive with Alberta in providing business and economic conditions ideal for investment. We will have to wait for today's Ontario 2006 Budget.