Dear Minister Ernie,

I trust your extended legislative break has been productive. As Budget 2000 approaches, allow me to highlight a few of the pressing concerns of taxpayers which we laid before the Finance Committee this past February.

Tax Relief. The government is on the right track with its plans to further cut income taxes by 20%. This move will fuel our economic growth and the resultant effect will mean more tax revenues flowing into the treasury for key program areas such as health care and education.

But all is not perfect. With Ottawa's move to re-introduce full-indexation (thereby ending bracket creep) into the tax system retroactive to January 1st, you must do more than simply ponder a similar move. You must also re-index the Ontario tax system, thresholds and credits to protect taxpayers from silent tax hikes due to inflationary pressures.

From 1986 to 1999, Ottawa and the provinces stole an extra $90 billion tax dollars from Canadians due to bracket creep. Ontario alone netted an extra $1.25 billion in extra personal income tax revenues in 1999 on account of bracket creep. And Ontarians have paid an extra $11.8 billion in the past 11 years due to this federal/provincial stealth tax.

It's time to mirror Minister Martin's move to end bracket creep. This should be the first measure in your next budget. It represents a three-way intersection of good fiscal policy, good social policy and great politics.

The Debt. With respect Minister, to only put $500 million/year towards Ontario's debt of $121.2 billion is insufficient. At this rate it will take over 200 years to pay down our debt. Asking taxpayers who will not be born for another 175 years to pay for "our" debt is tantamount to intergenerational tax evasion.

Debt interest charges account for 16 cents of every provincial tax dollar. Next to health care and education, debt interest charges are the third largest budget item. And according to the Fraser Institute, our debt burden borders on third world standards. In terms of our ability to pay debt - debt as a percentage of discretionary income - Ontario ranks 90th out of 158 economies, just ahead of Haiti, but slightly behind Pakistan. Ontario is also ranked ninth out of 13 governments in Canada.

At a minimum, $2 billion to $3 billion should be set aside each year as a line item in the budget for debt reduction. Reducing debt today cut's tomorrow's taxes. This approach is rooted in cross-generational equity. There remains much work to be done on the debt.

Gas Taxes. Price volatility at the pumps is fueling road rage. Yet instead of acting, your colleagues wasted taxpayer dollars on a farce of province-wide hearings process looking for price collusion and the like. Numerous studies have debunked this angle and a wide body of research has been published which shows how and why prices fluctuate.

Regulating prices is not the answer as motorists in PEI and Quebec can surely attest (on average they pay the highest pump prices annually). Instead, cutting gas taxes would be a good start. Even at 70 cents a litre, taxes still account for 43% of the pump price. In 1998/99, the government collected almost $3 billion in gas taxes and roadway fees, yet returned only 44% or 1.35 billion to the Ministry of Transportation.

And here's the kicker, in 1994-95 (the last year of the NDP), Ontario collected $2.8 billion in gas tax and licensing fees and dedicated over $2.3 billion to the transportation budget: 83% of what was collected. Minister it's time cut Ontario's 14.7 cents/litre gas tax. Gas taxes are a user fee on motorists, to not put the money back into transportation spending is highway robbery.

We anticipate your response to these concerns in the next budget. Regards,