Hoping to tear a page from the election playbook of fiscal conservatives, Ontario Liberal leader Dalton McGuinty recently unveiled his party's Financial Plan. Backed by a forensic auditor and two economists, it outlines the costs of his spending promises and details how his party would avoid deficits if elected to government. Most impressive was his ironclad commitment to balance the province's budget each year.

Yet according to the experts tasked to review the plan, Mr. McGuinty will do more than simply balance the province's books. Under the Liberals, total government spending will jump by $10.5-billion over four years, and the debt will be reduced by $5-billion. This is a notable "to-do" list, particularly at a time when the Ernie Eves government is struggling to avoid a deficit and spend more on its priority areas.

But there is a catch to the Liberal plan and it is an unpleasant one for taxpayers.

Because Mr. McGuinty will increase spending, the Liberals can only avoid deficits by raising taxes and canceling tax cuts promised by the governing Conservatives. The total Liberal tax hike: An eye-popping $4.6-billion.

Some of the tax relief measures they will repeal have been passed in law and others promised in the budget. A lack of space prevents a full listing, but under a McGuinty government the following tax cuts will be scrapped:

 

• The remaining portion of the 20% personal income tax cut.
   
• The Education Tax Credit.
   
• Raising the surtax threshold.
   
• Property tax relief for seniors.
   
• Tax relief for people caring for family members with disabilities or elderly parents.
   
• The investment-killing capital tax will remain in place.
   
• And Ontario's business taxes will increase.

Mr. McGuinty has dismisses tax cuts as "magic beans." Obviously the Liberal leader does not believe lower taxes help create jobs and economic opportunities. Under his leadership the drive to reduce taxes in Ontario will come to a rapid end. Mr. McGuinty thinks taxes are fine exactly where they are.

The Liberal leader also says he wants to build a super-charged, highly productive economy. Yet his first priority in government will be to adopt policies that will slow the economy and retard productivity and employment levels.

Tax cuts aren't magic beans, but they are a good tonic for the economy. Tax cuts work. Bet-ween '94 and '02 Ontario's middle income tax rate was reduced by 39%. During the same time, total government revenues increased by a healthy 44% and the economy grew by a staggering 52%. Only Alberta, Canada's other low tax province, rivals Ontario's job creation record and its prosperity.

Mr. McGuinty is clever to paint himself as a responsible fiscal steward. He understands that taxpayers want government to do more than tax and spend their money. They expect lawmakers to be prudent with tax dollars, make difficult administrative choices, and return excess dollars to them with sensible tax cuts.

Mr. McGuinty will raise taxes by $4.6-billion and is betting he can sell his plan as being fiscally responsible. Yet doubts over Mr. McGuinty's economic credentials will intensify if voters realize that he opposes tax relief of any kind, and that his Liberals do not believe lower taxes are vital to ensure Ontario's well-being. If that happens before the election, he will be in trouble. The Liberal leader should re-consider his diehard opposition to tax relief.