Ontario Liberals rescind school tax credit

The Ontario Alliance of Christian Schools (OACS) and other non-Catholic religious groups suffered a setback in early December, when a provincial court ruled against a suit filed against the new Ontario Liberal government for cancelling the Equity in Education Tax Credit (EETC).

The association's lawyer, David Brown, argued that scrapping the tax credit increased parents' overall tax burden, thereby violating the Taxpayer Protection Act, which mandates that tax hikes can only take place after they are voted on in a province-wide referendum. The court chose not to intervene on the basis that such action "would be a most extraordinary intrusion into the legislative function."

Introduced two years ago by the Mike Harris Progressive Conservative government, the tax credit allowed parents who send their children to private or religious schools to direct part of their tax dollars toward the first $7,000 of tuition paid. The Dalton McGuinty Liberals plan to not only rescind the tax credit, but make it retroactive to Jan. 1, 2003, nearly nine months before they were elected into office.

Writing recently in the Financial Post, C.D. Howe Institute economists Jack Mintz and William Robson blasted McGuinty's plan, arguing: "Retroactive taxation is unfair. It means that people discover, after they have already bought and sold, worked and saved, that government has changed the rules. Its arbitrariness undermines the rule of law." If such a law is enacted, "it will set an ominous precedent for Canadians everywhere," they added.

The EETC was available to families of all incomes, but its greatest impact will be felt by lower-income families, they argued. "For the thousands of middle- and low-income Ontarians with kids in non-'elite' independent schools, this additional tax liability will be no small burden," they wrote.

Speaking to The Interim, Canadian Taxpayers Federation Ontario director John Williamson agreed, calling the retroactivity "a terrible decision," as "it upends decisions made by parents as long as a year-and-a-half ago, and punishes parents for decisions already made."

Scrapping the tax credit is "seriously misguided" public policy, said Williamson, as the EETC empowered parents to make their own decisions, and gave the public system some badly needed competition, which "creates a better system for everybody."

Asked why the Liberals seem to be in such a rush to strike down the EETC, Williamson expressed some skepticism toward the view that they are primarily concerned with cutting costs. "I think this is clearly an ideological decision," he said. "Many Liberals believe public education is the only way to go, and won't consider alternatives to it."

It is ironic, he added, that "Liberals and their friends are quick to point out ideological decisions" made by their opponents, yet "they have their own blinkers on" when it comes to public education.

In spite of his own support for the tax credit, Williamson said he does not believe it falls under the Taxpayer Protection Act, and was not surprised with the court's ruling. Premier McGuinty, he said, is "keeping some promises and breaking others." It is most unfortunate, said Williamson, that many of the promises that have been kept by the Ontario premier have been ones that have "hurt economic activity."

Not surprisingly, non-Christian groups were also angered by the scrapping of the tax credit. Mohammad Ashraf, the secretary-general of the Islamic Society of North America - Canada, told Lifesite News that Muslim-Canadian parents "are mostly average middle-income earners who were counting heavily on this tax credit in their household budget." He added: "I am frankly surprised that the government acted with such mean spirit."

Ed Morgan, the chairperson for the Canadian Jewish Congress Ontario Region, said on behalf of the Ontario Association of Jewish Day Schools: "We hoped that the government would have offered another alternative to the tax credit. Now we non-Catholics in Ontario are, once again, the subjects of religious discrimination."

Morgan added that his group "always understood that the premier supported funding to faith-based schools," as McGuinty "voiced this support publicly to our executive only a few years before."