Flaherty vs. McGuinty: Top Five Theories

Why is Jim Flaherty going out of his way to pick a political fight with Dalton McGuinty over Ontario’s business tax rate? It’s anybody’s guess, and the guessing is getting good. Let’s run down the top five.

1.There is genuine philosophical disagreement between the Harper-Flaherty Conservatives and the McGuinty-Duncan Liberals over how best to deal with a floundering economy: cut taxes or target spending.      • Likelihood that this guess reflects the truth: very high.      • Likelihood that this guess is the motivating factor for the fight: very low. This is no longer a parlour-room spat. Something more than philosophy must be at stake (which is what makes the guessing so intriguing).

2.Jim Flaherty is undermining John Tory, encouraging a continued rank-and-file revolt against the Ontario PC Leader, setting himself up as the party’s white-knight saviour.      • Truth likelihood: fair to middling.      • Motivating-factor likelihood: low.If this is the reason Flaherty’s kicking up such a fuss, his timing is way off. The party missed its chance to dump Tory at its convention one month ago. Besides, it’s poor political form to appear to be actively seeking the throne.

3.Jim Flaherty is helping out Ontario PC Leader John Tory, who does not have a seat at Queen’s Park, by leading the charge against McGuinty for a little while.      • Truth likelihood: extremely low.      • Motivating-factor likelihood: even lower. But it’s kinda fun to pretend, for just a minute, that Flaherty’s a real nice guy.

4.Dalton McGuinty is helping out Stéphane Dion by making the Conservatives look bad in Ontario, the better to preserve Liberal support in the province for the next federal election.      • Truth likelihood: moderate to high.      • Motivating-factor likelihood: moderate.Everyone appears to have forgotten that it’s McGuinty who started this fight by poking at Flaherty in advance of the federal budget last month; Flaherty’s merely returning the courtesy. Election positioning is definitely part of the game here, but it feels like there’s still more to it than that.

5.Both McGuinty and Flaherty, having looked over the economic projections, know that the bottom is about to fall out of the economy, which means voters are about to get really, really angry, and they are ducking for cover while blaming each other for a problem that hasn’t quite materialized yet.      • Truth likelihood: moderate to high, depending on whether you are an optimist or a pessimist.      • Motivating-factor likelihood: pretty high no matter what. These days, nothing is more unsettling than reading the economic forecasts of financial institutions, whose world is shrinking fast. A story in this morning’s Star quotes a TD Bank forecast that indicates that the bank has lowered its economic growth estimates for the province to a measly 0.5 per cent and claims that “There’s a significant risk that Ontario will experience a mild recession.” Sounds to me like a nice way of saying that a recession is a sure bet. I want answers to these follow-up questions: What exactly is a “mild” recession? And what’s the risk of a recession that isn’t mild? To judge by politicians’ behaviour, it’s getting higher all the time.