Pessimism Following Throne Speech
A local economist’s outlook on Ontario lowering its $12.5-billion deficit is negative.
In its throne speech, the provincial government promised not to raise taxes, which makes Mark Meldrum think inflation’s going to go through the roof in an attempt to get taxpayer money through HST on more expensive products. He says it all starts with tying minimum wages to inflation each year. “It creates the very inflation that you’re indexing it to, simply because if businesses expect there to be 2% inflation, they’re going to say, ‘well, minimum wage is expected to go up 2% next year — I’m going to raise my prices now to cover off that increase that I have to pay for.”
Meldrum isn’t convinced Ontario’s plan will completely balance its books by 2017-2018, as is the hope of the Liberals.
The economist thinks we could also see cuts to public services over the next three or four years to help the government reach its goal.