TORONTO - Federal Finance Minister Jim Flaherty undermined confidence in the Canadian economy with his "inappropriate and potentially harmful'' comments aimed at singling out Ontario as the last place in Canada to start a business, Premier Dalton McGuinty said Sunday in a letter to Prime Minister Stephen Harper.
Calling Flaherty's remarks to a Halifax audience Friday an "extraordinary attack on Ontario'' and the "latest in a series of attacks on Ontario by your finance minister,'' McGuinty said the federal government is betraying its responsibility to champion the Canadian economy.
"The very last thing Ontario families and businesses need is for your minister of finance to actively seek to undermine confidence in the Ontario economy,'' McGuinty wrote.
"And this is particularly true at this point in time, when Ontario is being challenged by a slowdown in the U.S. economy, a high dollar and high oil prices.
"I respect Minister Flaherty's right to offer his opinion, but I strongly disagree with both the advice and the way in which it was offered,'' he added.
The letter is just the latest salvo in the province's battle with the federal Tories over Ontario's struggling economy -- a fight that's degenerated into name-calling and personal insults in recent weeks.
In a speech to the Halifax Chamber of Commerce Friday, Flaherty called on all provinces to aggressively cut the business tax rate to 10 per cent by 2012 and help him create a Canadian "brand.'' The governing Ontario Liberals don't understand that "you must reduce your business taxes over time,'' Flaherty said.
"Their business taxes are the highest in Canada. If Mr. McGuinty thinks that's good for the manufacturing sector in Ontario, he's wrong,'' Flaherty said.
"It discourages investment in the province of Ontario. If you're going to make a new business investment in Canada, and you're concerned about taxes, the last place you will go is the province of Ontario.''
McGuinty has argued the province is cutting business taxes but it's not willing to cut them at the expense of health care and education funding.
The province recently announced $1.1 billion in business tax cuts in its fall economic statement, McGuinty said, noting Ontario's corporate income tax rate is lower than the federal government's projected rate for 2012.
But it takes more than just tax cuts to grow the economy, McGuinty added. Governments have an obligation to help out families "being hit hard by powerful, global economic forces,'' McGuinty said.
"While it is understandable that our two governments may differ from time to time on matters of economic policy, it is completely unacceptable for Canada's minister of finance to publicly and deliberately attack the choices made by Ontarians,'' McGuinty wrote.
"An attack on Ontario's choices and priorities undermines confidence in the Ontario and Canadian economy.''
Before tabling his budget last week, Flaherty lashed out at McGuinty saying his tax policies were fuelling the downturn and massive job losses in the manufacturing sector. Ontario's lagging economy is partly due to "lack of innovation, lack of foresight and a lack of leadership,'' Flaherty had said.
Economic Development Minister Sandra Pupatello responded by calling Flaherty a "cartoon character'' and accused him of "bald-faced lies.'' If the federal Tories want a war of words, they will get one, Pupatello warned.
The two sides had a brief detente leading up to the federal budget last Wednesday, but Ontario Liberals were quick to call the budget a "missed opportunity'' an hour after it was tabled because it didn't spend enough of the surplus on helping Ontario's hard-hit manufacturing sector.
A recent poll suggests the feud is winning public support for McGuinty. The Canadian Press Harris-Decima survey, which looked at the war of words between the two politicians, suggested 47 per cent of respondents sided with McGuinty while just 27 per cent backed Flaherty.
In Ontario, the poll found 56 per cent support for the premier and 25 per cent support for the minister.
