The cornerstone of the Green Party of Ontario’s economic plan is a balance of market-based solutions, regulations, environmental taxes and a tax-shift away from personal and business income onto environmentally harmful goods, services and activities.

Ecological fiscal reform addresses lifecycle costs of production, distribution and disposal. Independent from special interests, GPO policies protect the planet while developing meaningful employment, ensuring social justice and preserving the health of communities. This is the only logical way to measure development.

Tax Shifting: Pay for what you burn, not for what you earn
The Green Party of Ontario’s economic plan proposes to shift the income tax burden gradually from labour, business activities and farming to resource use related to water, energy and aggregates. We will do so gradually without impeding economic development or employment.

The Green tax plan rewards businesses and individuals for making good environmental decisions and discourages harmful decisions by making people pay for what they use. By imposing taxes early in the production process, the GPO will encourage innovation, efficiency and alternatives. Taxes on resources influence the sourcing of raw materials, the energy used to extract them, the manufacturing and distribution chain, and the amount of energy used by the final product. This will allow green and responsible companies to profit over irresponsible companies.

By the end of the next four-year term, the GPO’s tax plan will have shifted approximately $7.9 billion dollars from productive activity onto environmentally detrimental activities and resource use. Our four-year green tax shift plan is a bold and important first step in the fight against climate change and protecting our environment, while supporting a vibrant economy.

To achieve these goals, the Green Party of Ontario will:

■ Reduce personal taxes by $3.5 billion over the next four years by phasing out the Ontario Health Premium Tax in a fiscally responsible manner through a revenue-neutral green tax shift. The phase out of the $2.6 billion Ontario Health Premium Tax, which is a tax on jobs, will be achieved by raising exemption levels. In four years, everyone with income under $100,000 will be exempt. The tax will be fully phased out as revenue from carbon and resource taxes increase.

■ Reduce personal income taxes by $2.3 billion over four years by gradually raising the personal tax exemption to $11,000. Raising the personal tax exemption will benefit all wage earners, particularly low-income earners, and will be increased on a revenue-neutral basis with the establishment of carbon and resource taxes. When fully phased in, this tax reduction will save Ontarians about $1 billion per year.

■ Reduce corporate income taxes by $1 billion over four years through a revenue-neutral green tax shift. By shifting taxes from profits onto resource use, the green tax shift will reward successful companies that produce clean, green products and services.

■ Apply an immediate 2% carbon tax on oil, natural gas and coal imported or extracted for use in the province, to be increased 2% annually every year for the next three years to 8% total tax in four years. These taxes will generate approximately $483 million in the first year based on current use. By year four, it is estimated that these taxes will generate a total of $4.5 billion, which can be used to reduce taxes on jobs
and profits.

■ Increase the annual aggregate (sand and gravel) licence and wayside permit tonnage rate from $0.115 to $1 per tonne in 2008, with a $1 per tonne per year increase for three years ($4 per tonne by 2011), capped until 2015 then indexed to inflation, and increase the royalty fees (for aggregate extraction on Crown land) from $0.50 to $1 per tonne. Under the GPO plan, fees paid to municipalities and other programs will remain unchanged. The estimated year one revenue increase is $154 million. The total four-year revenue is estimated at $1.66 billion, which can be used to reduce taxes on jobs and profits and encourage conservation and recycling of aggregates.

■ Implement an immediate tax on permits for water taking of $100 per million litres, with an annual increase of $100 per million litres over four years ($400 per million litres by 2011). This tax will value and encourage conservation of one of Ontario’s most precious resources, while generating approximately $1.8 billion over four years to be used to reduce taxes on jobs, profits and to encourage the diversification of Ontario’s economy. Usage for agriculture will be exempted.

■ Establish a sustainable business development program for northern and rural communities by investing $1 billion over four years to encourage green business investment and job creation. As the tax system shifts towards one that supports a green economy, northern and rural areas will likely face disproportionate challenges that can be turned into opportunities to benefit all Ontarians.

■ Place a moratorium on any increases in the assessed market value of all residential properties and introduce a revenue neutral Location Value Tax to replace the existing property tax system. Under the GPO’s LVT plan, municipalities will capture the increased value of land that results from infrastructure and development financed by the surrounding community. LVT will separate property assessment into the value of the building and the value of the land. The municipality will tax the land at a higher rate than the buildings, which will increase taxes on underused and vacant land. LVT will encourage intensification, deter sprawl and protect precious farmland. Rate differentials for zoning, such as for agriculture land, will remain with the LVT system.