Silver bullet that can balance the Ontario budget?

OR

Aside from taxing and cutting, the only one other way to balance the books is grow the economy.

Two decades ago, then PC leader Mike Harris used growth to beat back a huge deficit. His idea was simple: Reduce the size and cost of government while slashing taxes to encourage economic growth.

The economists and editorial writers of the day had a glorious time roasting Harris over the insanity of cutting taxes to balance the budget. But darned if it didn't work.

So is growth the silver bullet that can balance the Ontario budget? Yes and no.

Back in the day, Harris was able to unleash the power of private sector investment and job growth by the simple if courageous act of cutting taxes. In those dark days, Ontario's tax rates were noncompetitive. A competitive tax structure invited investment and job growth.

Today, Ontario's growing tax burden has yet to reach the point that similar cuts would have the same effect. Which leaves those who would govern in a bit of a pickle. Governments are in control of very few things that can change the climate for business investment.

Throwing money at a particular sector rarely produces sustainable growth.

But there is one cost the government has control over that could dramatically grow the economy: The price of energy. A generation ago, cheap energy helped to fuel job growth in Ontario. Today, expensive energy is helping to export jobs and tax revenue out of Ontario.

It seems to me that balancing the Ontario budget is going to require serious cost-cutting and a bold initiative to dramatically lower the cost of energy. Or maybe we should just tax the rich.

john.snobelen@sunmedia.ca