The Common Sense Revolution

Head Table Guests

Maria Roman-Bricknell, Account Supervisor, Fleishman-Hillard Inc. and a Director, The Empire Club of Canada; Lynne Golding, Chairperson, Women in Nomination (WIN) Ontario PC Party and lawyer, Fasken Campbell Godfrey; The Rev. Dr. Douglas Lobb, Senior Minister, Timothy Eaton Memorial Church; Janet Harris; Bill Farlinger, President, William A. Farlinger & Associates; Denise Cole, Public Policy and Political Consultant, McFoy, Cole & Associates and a Director, The Empire Club of Canada; Joseph Sorbara, The Sorbara Group; Linda Leatherdale, Money Editor, The Toronto Sun; and Anthony S. Fell, Chairman and CEO, RBC Dominion Securities.

Introduction by David Edmison

Abraham Lincoln, one of American history's true political heroes, did not in fact win every election with ease during his storied career. He lost a few too. When asked how he felt after one such defeat, he said simply: "I felt like a boy who had stubbed his toe in the dark. He was too old to cry, but it hurt too much to laugh." Perhaps Mike Harris felt much the same way on election night in 1990. With well less than a year under his belt as Conservative leader, he saw his team reduced to third-party status in what became one of the biggest stories in Ontario's political history. After the Liberal era, Ontarians clearly felt it was time for a change and turned to the left, handing the reigns of power to Bob Rae and the NDP in dramatic fashion.

Well, if Mike Harris felt like he'd stubbed his toe--he wasn't limping for long. On the contrary, he's been running hard ever since; running hard to rebuild his party from the ground up. Literally starting from scratch the day after the election, Mike Harris set out to change prevailing public sentiment and began his painstaking process of recovery. In the 1995 campaign, he's put his party back on the map with a pragmatic approach to governing he calls: "The Common Sense Revolution."

Colleagues and critics alike agree that the rebirth of the PC party began with Mr. Harris's election as leader in May of 1990. But his contributions to public life began years earlier. As a teacher and businessman, he served for seven years on the Nipissing Board of Education, four as Chairman, during the 1970s. First elected to the legislature in 1981, he had been appointed Minister of Natural Resources and Minister of Energy by 1985. A northern resident himself, he demonstrated a unique understanding of the sensitive environmental issues facing the province. He made the development of a wetlands policy a priority and created a new community wildlife programme. In Opposition, Mr. Harris has served as Conservative Critic for Housing, Northern Development and Mines as well as Revenue, Labour and Finance.

Born in 1945 in Toronto, he was raised in Callander on the north shore of Lake Nipissing and now resides in nearby North Bay.

In the heat of the current campaign, the PC "Common Sense Revolution" has generated a great deal of support, discussion and debate. In a common sense revolution of our own, we invited Mr. Harris to join us today to tell us more about his plan to cut taxes and spending, create over 700,000 new jobs and balance the budget within the first term.

Ontarians are not often regarded as revolutionaries. Perhaps our most famous was William Lyon Mackenzie, who, in 1837, initiated what he believed would be a revolution in Upper Canada. In an effort to seize political power from the Family Compact, he led his supporters down Yonge Street aiming to overthrow the government. A few shots were fired and the group quickly disintegrated. History has downgraded this "revolution-want-to-be" to "rebellion" status. And "common sense" are words rarely used to describe the event. In the twentieth century, armed insurrection has given way to concrete, published ideas and political leaders who must be accessible and accountable. In these times of increasing voter sophistication, it's just "common sense"! While the issues are different, Mike Harris's dedication to his "revolution" is just as strong in 1995 as Mackenzie's in 1837. But unlike our infamous 19thcentury rebel, if Mr. Harris were to lead his supporters down Yonge Street, the line might stretch all the way to Lyn McLeod's riding in Thunder Bay.

Ladies and gentlemen, it is not often that The Empire Club of Canada welcomes to its podium a "revolutionary." It is indeed my pleasure to introduce the leader of the Ontario Progressive Conservative Party and the "Common Sense Revolution." Please welcome Mr. Mike Harris.

Michael Harris

Head table guests, ladies and gentlemen:

It's indeed a great pleasure to be back at The Empire Club. I was here just three months ago on February 22 and I understand you are hosting a series of luncheons for all three party leaders within this week so, Mr. President, I appreciate the opportunity to address the Club today and I thank you for the kind introduction.

Being invited to address The Empire Club once is an honour, but to be asked to address you twice in less than 100 days must be something of a record. I would like to tell you that not much has really happened since the last time we spoke, but I'm sure you know that wouldn't be entirely true. I do know though that one thing has not changed. The message I delivered to you in February of 1995 was the same message that I had in May of 1994, when I launched the "Common Sense Revolution." It was the same message that I had in 1990 when I campaigned for less taxes, for less government spending and more jobs. And now, in the last 10 days of the 1995 election, I stand before you today to deliver the same message again.

You see I found in my travels across Ontario speaking with people, where they live, and where they work, that they want a leader who is committed to change--not a leader who changes their commitments. And there is a big difference, my friends.

When I spoke to your Club in February, I told you about a man from Wawa who told me about his wife and his family and how they had worked harder and harder each and every year for the last number of years. Yet at the end of those years he found himself further behind than he was at the start of the year. He was frustrated that, while he and his family had made sacrifices and cut back, he didn't see the same commitment from government. He asked me a question after I spoke and it's a question I have been asked in different ways all across Ontario. He said, "Mr. Harris, when is government going to do its share?" And when I checked the facts, my friend from Wawa was right. Because of excessive taxation and runaway government spending, the government was the only one that had been getting richer for the past 10 years and he and his family and the average Ontario taxpayer was poorer today in real after-tax dollars than they were 10 years ago. You know, it's no wonder that we don't have consumer confidence and that consumers are not spending in Ontario and in Canada the way they're going to have to to create jobs.

I also told you when I was here in February, that based upon my conversations with the people who pay the taxes and who obey the laws all across this province, that I had set a number of goals for myself and my party in the coming election campaign. I said I wanted a campaign that helps restore the integrity of the system, gives the people of Ontario the quality of debate and dialogue that they deserve in this democratic process, a campaign that respects the underlying strengths of our province and one that offers a positive future for our citizens. Those were the goals I spoke of in February. They are the goals we have followed throughout this election. They are the goals we will continue to follow over the remaining days of this campaign. You see I believe we have a great opportunity to create a new direction for our province. We can create jobs. We can create growth. We can bring back opportunity and hope for Ontario.

Now the next government of this province will face some very large and some very difficult challenges but I am optimistic about the future for Ontario, and indeed about the future of this country. Ontario used to be known as the engine of economic growth in this country. It should be, and it can be again. Ontario has the resources, the people, the infrastructure to be a truly great place to live and to work, with fairness and compassion and the opportunity for prosperity for all. With a clear agenda for change, Ontario can once again lead Canada out of tough times. With a plan to fully balance our provincial budget and create growth and jobs, we'll be in a position to help the federal government and be part of a national solution to our national fiscal and economic challenges, which are very real and very large too.

So now the election is in full swing. Voters are studying our detailed plan and comparing it with the promises of the other two leaders. And I welcome the opportunity today to spell out in more detail exactly what a Harris government will mean for you and for Ontario.

Before that, let me address one of the very important underlying issues in this campaign. That is the issue of trust--an issue I take very seriously. The people of Ontario have grown sceptical of all politicians. Who can blame them? They've been burned so many times over the last 10 years by leaders of all political stripes. We want to tackle this cynicism directly because, if we cannot get beyond this, our system of government decision making will be unable to address the challenges that our province faces. That's why we published our plan a full year ahead of the election so people could read it for themselves. They could check the numbers. They could do the math and they could weigh the alternatives. I've also said that if I fail to deliver my commitments as premier, I will resign. You see I am not simply in this election to win. I am seeking a mandate to implement the changes in our plan.

We've taken a number of steps as well to bring back the voter to our political process. We will introduce balanced-budget legislation with teeth, including cuts to cabinet salaries if spending exceeds targets. We are committed to legislation which will require binding referenda or a full general election before government can ever again raise taxes in the province of Ontario. And I want the people of Ontario and every single one of you here in this room today to know one thing about Mike Harris. I am deeply committed to this plan. I'm so committed to this plan that I am willing to do what no other politician in this province has ever been willing to do--to put my salary and put my career on the line.

Now over the course of the last several weeks my opponents have started to attack me. They have distorted my plan. They have exaggerated. In February I told you we needed a vigorous debate of the issues and I welcome a vigorous debate. In that speech I said that if Bob Rae and Lyn McLeod were prepared to address issues squarely it would be a campaign that respects the intelligence of the voter. Lyn McLeod calls me wacky and considers that a vigorous debate. I think the voters deserve much better than that and today I would like to correct some of the distortions from my opponents and once again invite the voters to compare the plans and see the difference.

I believe I can summarise our plan in the form of a simple equation. That equation is two plus four equals six. Two billion dollars is for deficit elimination. Four billion dollars is for job-creating tax cuts and it requires $6 billion in government-spending cuts. First let me talk about the two. That's the amount of savings in our plan each and every year that we will use to kick-start the deficit reduction plan. We are the only party to put $2 billion of spending cuts directly towards deficit reduction. The others rely entirely on growth in revenues. Cutting government spending and encouraging economic growth along with $2 billion every year going to deficit reduction will result in a balanced budget within the first term of a Harris government.

Now since I launched my plan over a year ago, seven provinces have gone on to fully balance their budgets. Ralph Klein in Alberta led the way. Premier McKenna in New Brunswick, then Saskatchewan, British Columbia, and Premier Filmon in Manitoba. Even Newfoundland has a fully-balanced budget today. And I say to you: "Newfoundland's budget--fully balanced; Ontario--mired in debt." Can you imagine the Ontario jokes they're telling in Newfoundland today as I speak? You know Ontario's premier, as the head of the largest economy, the most populace province in the country, must be able to go to the First Ministers' table with a solid plan to balance our budget and to create the growth and the opportunity required so that Ontario cannot only solve its own problems but can contribute to the national prosperity. Ontario should be helping to lead Canada out of recessions, not drag her down.

Now let me get back to my equation. Two plus four equals six. We're the only party to take $2 billion and apply it each and every year to the deficit. Now let me talk about the four. That's the approximate size of the income-tax cut that we propose, spread over three years--half in the first year, another quarter in the second year, another quarter in the third year. This income-tax cut, when fully implemented, will leave almost $2,000 a year in the hands of the average family. That's about $170 a month to save, to invest or to spend as you see fit. If it's a new house or renovations to a house, that's jobs in the construction industry, jobs in the planning industry, jobs in the lumber industry up in Northern Ontario. If it's a new car, that's jobs in the retail industry and the auto industry and the auto parts industry, jobs in the steel industry, jobs in Inco in Sudbury. If that money is saved, the savings will be available then to our entrepreneurs and our small businesses to borrow, invest and create more jobs. It will be a job-creating tax cut. You see I believe how Ontarians save, spend and invest their money will create far more jobs than can any bureaucrat or any politician at Queen's Park. Now where does the number four come from? Well it comes from Bob Rae, because that's exactly how much Bob Rae raised tax rates during his time as premier. In his first budget he raised taxes the equivalent of $2 billion. In his second budget he raised taxes $1 billion. In his third budget he raised taxes another $1 billion. Friends, our plan will undo the damage of Bob Rae's relentless tax increases. We will cut taxes $2 billion in our first budget. We'll cut taxes $1 billion in our second budget and we will cut $1 billion more in our third budget. That will put our tax rates back at the 1990 level--when we had more people working, when we had more jobs, when revenue to the province of Ontario was actually higher than it was after Bob Rae's tax hikes. This tax-cut plan will kick-start the economy. It will create consumer demand. This consumer confidence will bring back hope and opportunity to a province that has been starved for jobs for far too long.

Now over the weekend, Bob Rae tried to suggest this cut in the provincial income-tax rate would only benefit one small group in society. He is wrong. That is part of the fear-mongering campaign. Of the $4 billion our tax cut gives back to the hard-working taxpayers, 65 per cent goes to families at or below the average Ontario income. Fully 77 per cent of the tax cut goes to those income earners at $75,000 or less.

I've talked about the $2 billion in annual deficit reduction and my party is the only party to dedicate dollars straight to the reduction of the deficit. I've talked about the $4 billion in income tax cuts. Now how do we pay for this? Well, keeping with our equation, that two plus four equals six, we must find $6 billion of spending savings. And that number is precisely how much government spending that we propose to cut in our plan. It is about 11 cents on every dollar that the government spends today. I know that we can find and we can cut 11 cents of waste, of mismanagement, of unnecessary spending in every dollar of the current $56-billion Ontario budget. Spending has mushroomed over the past 10 years, far in excess of the rate of inflation from just over $25 billion, just 10 years ago, to $56 billion today. So Ontarians know that we can find 11 cents of waste in every dollar that the government spends. And in our plan put out over a year ago we spell out what we will cut and what we will not cut.

We explicitly protect Ontario's funding priorities. These are the things that, as I travelled this province, people told me were their number-one priorities--health care, education in the classroom, law and order and law enforcement. They said to us: "Do those three things well as a government before you try to be all things to all people." Now again Bob Rae in this election campaign is trying to scare people. He knows our plan does not cut one penny from the health-care budget, but he is trying to scare people into thinking that it will. It's not true. We are committed to reinvesting any savings found in the healthcare system right back into the health-care system. And we're the only party to make that commitment--savings such as the elimination of health-card fraud and finding operating efficiencies in our medical system. Every penny reinvested back into the health-care system.

Now to fully fund the areas that Ontarians have identified as their priorities, we do make large cuts in other non-priority areas. This is where we go on the record unlike other parties. And we did so a year ago. Our welfare reform plan, which includes mandatory work for welfare, will generate a net saving to taxpayers of about $2 billion by reducing caseloads, getting people back to work, setting benefits at more reasonable levels, toughening eligibility criteria, and cracking down on fraud, on abuse and mismanagement. Our 15-per-cent reduction in the direct civil service, a cut of 13,000 positions, combined with our plans to restructure the way government works will save $1.4 billion over three years. Our education reforms will include a tough core curriculum, standardised testing, a four-year secondary school programme as every other province and most countries in the world have, and a reduction in funding for the educrats who have been taking money out of the classroom and spending it on themselves. These reforms will save more than $1.1 billion out of the $17 billion currently spent on elementary, secondary, college and university education in Ontario.

There is much more in our plan. An end to corporate welfare will save us $200 million in grants, subsidies and handouts to business. An end to the government housing boondoggle will save us $250 million. Our restructured capital budget will save $300 million. Our overall programme review, similar to that being conducted by Paul Martin in Ottawa, will save an additional $500 million.

The total savings add up to $6 billion. It's all in the plan and I encourage you to read it for yourself. I know it sounds like a lot of detail. The best way to explain our plan is to go back to the simple formula--$2 billion plus $4 billion equals $6 billion--and that's how we can cut taxes and balance Ontario's budget, two top priorities of Ontarians today.

Now my opponents say that what we propose can't be done. My opponents say our plan doesn't add up and I know economics can be difficult but this is arithmetic--two plus four equals six. I can understand why Mrs. McLeod might try and confuse the issue, but the details are all in our plan. Now I said I welcomed a vigorous debate on the issues. In her own little red book Mrs. McLeod makes 143 promises. The net result is that her plan using her numbers commits to spending more than even Bob Rae promises to spend in each of the next three years. We used the same Dominion Bond-Rating Service (This is the agency that rates Ontario's finances.) assumptions that we put our plan to and subjected Mrs. McLeod's plan to those assumptions. The McLeod plan does not balance the budget in seven years if ever. In fact, the McLeod plan, spending more even than Bob Rae, would see deficits in excess of $10 billion for each of the next three years. Our plan offers real change--on taxes to create jobs, on mandatory workfare, on an end to unfair job-hiring quotas and on real spending cuts that will fully balance Ontario's budget.

On June 8, Ontarians will have an opportunity to select the premier that they trust to bring about the kinds of changes that Ontario needs to get back on top. It will be the most important choice I believe that we will make in a generation. We can fully balance Ontario's budget within our first mandate by generating new growth and economic activity and by taking $2 billion a year and applying it every year to the deficit. We can cut taxes and create jobs by cutting income taxes by $4 billion, undoing Bob Rae's tax damage. And we can achieve both these goals if we have the political courage to cut $6 billion--11 cents on the dollar in wasteful government spending. To save $6 billion Ontario needs a leader who will tell them in advance what will be cut. I've done that. To save $6 billion, Ontario needs a premier willing to say "no" to the demands of the bureaucrats and of the special interests. I will do that. To save $6 billion Ontario needs a premier who knows what the priorities are for the people of this province. I know what those are because you have told me over the last four years. Balance the budget, cut taxes, cut waste in government spending, protect health care, put funding back into the classroom and bring back law and order to our province and our neighbourhoods. Most importantly, give us a climate where the private sector can create jobs in our province again.

The simple arithmetic of two plus four equals six means that we can do all that if we work together. To implement this plan we need leadership that takes ownership of our own problems here and is honest about the solutions. If we get our budget in order, and if we get our economy moving again Ontario will be able to be part of the national solution and we can do this if we roll up our sleeves and get started now. Together we can ensure that for you and for me, for those who are unemployed, for those who are currently on welfare, for our children and indeed for our grandchildren, we can ensure that Ontario's best days are still ahead of us.

Thank you very much.

The appreciation of the meeting was expressed by Denise Cole, Public Policy and Political Consultant, McFoy, Cole & Associates and a Director, The Empire Club of Canada.