On Tuesday, Ontario Finance Minister Dwight Duncan issued his province's first budget since Dalton McGuinty's Liberal government was re-elected in October. Instead of a taxpayer-friendly budget that would encourage consumer confidence and needed investment, Mr. McGuinty has once again indulged his preference for heavy taxes and spending.


Ontario government program spending is growing at unsustainable levels. Banks are forecasting Ontario GDP growth close to 0.5% and inflation of only 1.4%, yet spending will go up at least 3.2% next year. Last year, spending increased by 6.3%, more than three times the rate of inflation.


Mr. McGuinty repeatedly argues that he has no fiscal room for tax relief. But last year, Ontario generated $5-billion more in revenue that it had forecast. This happened in large part because of the steady climb in personal tax revenues, which have increased from $18-billion when Mr. McGuinty took office to a projected $28-billion in 2008-09. Instead of using this "found" money to provide relief for tax-weary Ontarians or to help build a strong economic climate with business-tax relief, Mr. McGuinty spent every single penny on programs and pet projects. This spending of excess revenue - which really is structural overtaxation - should not be allowed. Spending and budgeting controls should be put in place to end this practice.


Admittedly, the budget did provide a handful of boutique tax cuts. For instance, the government is offering a $250-a-year rebate for low-income seniors, which will grow to $500 per year in 2010. And Mr. Duncan announced that his government will not tax income coming from the new Tax-Free Savings Accounts created in the recent federal budget.


On the business-tax front, moreover, the government made efforts to reduce burdens on manufacturing and resource businesses by retroactively eliminating the capital tax as of January, 2007. (Sadly, the rest of Ontario businesses will have to wait until July of 2010 to see the same relief.)


Yet, these tax measures will amount to only $142-million next year while spending will climb by $2.7-billion. This means that for every dollar of tax relief, there will be $19 in new spending. This is anything but a balanced approach.


Finally, there is the alarming trend by which the McGuinty government has expanded Ontario's debt. During his tenure, Mr. McGuinty has grown taxpayer-supported debt from $148.7-billion to $167.7-billion. That is an additional $19-billion bill handed to future taxpayers. Because interest rates have declined, debt interest payments have remained stable at around $9-billion a year. Nevertheless, Ontario taxpayers pay $1-million an hour in interest - the equivalent of nearly a dime of every tax dollar sent to Queen's Park. This figure could jump dramatically if interest rates surge.


The idea that a government can spend its way to prosperity has been discredited. Mr. McGuinty and his government cannot give anything to Ontarians that they don't first take from them in taxes today - or tomorrow through debt. Hopefully, it will not take another three budgets like this one before that lesson is learned.


Kevin Gaudet is Ontario director of the Canadian Taxpayers Federation.