If only there were a way to compare the Ontario Liberals’ financial record. Wait, there is. ~ Patrick Flanagan

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A recent Doppler commentary criticizing the Ontario Conservatives’ cuts in library funding, Ford’s cut to library service budget smacks of anti-intellectualism, attracted contrary comments informing us that such cuts were essential because “Liberal criminals” “had gone hog-wild for fourteen years“, “spending our money into oblivion” so there is “no more gold in the vaults, folks”.

Really? Was the previous government that bad? If only there were a way to compare the spendthrift Liberals’ record with that of other provincial governments, of various stripes, operating in the same time period. Alas, in fact, there is.

In February this year, the Financial Accountability Office of Ontario (FAO) released a brief report comparing various aspects of Ontario’s finances with those of other provinces. It is available at here. The comparisons were done on a per capita basis, and are based on 2017, when those “champagne socialists” were in power.

The report includes these findings:

Ontario provincial government received $10,415 in total revenue per person, the lowest in the country.

Ontario spent $9,829 per person on programs, also the lowest among the provinces, and more than $2,000 below the rest-of-Canadian average.

Looking only at health care, Ontario’s spending of $3,903 per person was the lowest in the country, and $487 below the rest-of-Canadian average.

Over the period from 2010 to 2017, program spending per person grew at an average rate of 0.7 per cent per year in Ontario, well below the rest-of-Canada average of 1.9 per cent.

Ontario’s net operating deficit was $271 per person, which was below the average of other provinces. However, the FAO expected it to rise to $868 in 2018 due to projected higher expenses and lower revenue.

Ontario has the second highest debt load per person, behind only Newfoundland and Labrador. The debt load was expected to increase, relative to other provinces, as a result of the higher expected deficit in 2018. Nevertheless, the interest on the debt ($858 per person) was $180 below the average for the rest of Canada.

Ontario receives relatively low amounts of revenue from resources and federal transfers, so it must depend more heavily on taxes. Yet, because of the strength of Ontario’s economic base, the tax burden is lighter than the average for the rest of the country. Personal income tax takes 9.9 per cent of labour income in Ontario, compared to an average of 11.7 per cent in the rest of Canada. Corporate income tax takes 11.8 per cent of corporate profits in Ontario, compared with 12.2 per cent in the rest of Canada. On the other hand, sales tax takes 5.9 per cent of household spending in Ontario, but only 5.7 per cent in the rest of Canada.

There is always room for improvement in any endeavor. However, these findings suggest to me that the province’s finances were not out of control during the Liberals’ tenure. I hope that a similar analysis in four years’ time will yield a similar conclusion.

Patrick Flanagan is a retired actuary, currently enjoying life in the Huntsville area.

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18 Comments

  1. Bill Wright on

    A good read!

    Now to deal with the problem of people voting for the immediate “Remove from Office” rather than thinking about what the next four years might bring. Sometimes the devil we know is better than supporting the one we don’t know, or the one who campaigned on attack only with no visible concrete future plans.

    Oh, yes, the long weekend is upon us…I’m really looking forward to going to my neighbourhood corner store to buy some $1 beer so I can party it up with the rest of the citizens- you know, the ones awaiting delivery of their Cannabis by Canada Post, whose deliveries won’t happen on Monday.

  2. Michael Petropulos on

    Patrick Flanagan, as you are aware some of those comments on the library story were mine, and “yes” the previous government really was “that bad”. You should be able to recognize and admit that.

    • Karen Wehrstein on

      Right-wing debate these days is all about ignoring substance, laying on _ad hominems_ then doubling down on when called on them.

  3. sylvia purdon on

    A great analysis specially for those who think that the Wynne government got bad treatment from the Press and Doug Ford.

  4. Karen Wehrstein on

    Thanks for casting some factual light on this issue, Patrick. And thank you Doppler for running with it. It’s very telling.

  5. Murray Christenson on

    We can debate the pros and cons of using per capita numbers in Canada’s most populous province another time. The bottom line is, the Liberals accumulated massive debt through strong economic times to the point where Ontario became the most indebted sub sovereign jurisdiction in North America. The outrage over minor tweaks and cuts in this recent Ford budget is laughable. Imagine if he brought a Conservative budget in with a hard path to balance within their tenure…this was in fact, a Liberal budget.

  6. Seguin Sailors on

    There are some great facts in here. Unfortunately, they require reading past the headline, so they will be lost on most.

  7. Hugh Holland on

    Well said Pat. We lived in Quebec when the populist mood developed that things could not get worse and they had to get rid of Robert Bourassa’s government. Well it did get worse. They elected Rene Levesque’s PQ and Montreal will never again be the financial capital of Canada. Ironically it was Bourassa’s massive James Bay hydro-electric project (Second only to the Three Gorges project in China) that has kept Quebec afloat ever since.

  8. This is a very well-written commentary by my friend Patrick. His conclusions understandably have been derived from the actuarial viewpoint that provincial finances can be scientifically analysed. In reality this is not science ; this is the art of public perception. The last election proved that one political understood this art and continues in the early stages of it’s mandate to make tough changes in the name of efficiency. Don’t confuse me with the facts while I enjoy beating the previous Liberal. “dead horse” .

  9. George Gilley on

    According to the revenue and expenditure dollars per person it would appear that the surplus per person is $586.
    We all know that the province is operating with a deficit so your numbers don’t compute

    • I find these number incomprehensible. They contradict themselves, total jiberish. WTH am I actually looking at?

  10. Brian Tapley on

    Going on my memory of a newspaper article last week concerning the savings created by cuts to library spending I would comment that (and I have to admit I cannot find the exact article again so this is just from my memory) the expected savings were listed at 1.6 million dollars for 2019.
    Now I’m not a library “nut” actually using the place only occasionally, but it seems that all the libraries I have visited have been relatively well run and busy and in call cases, helpful to my thought is that is a 1.6 million dollar saving even going to show, maybe in the 4th or 5th decimal position, in the Ontario budget???
    With this in mind is it a “good” cut to make?

  11. Patrick Flanagan on

    It was refreshing to see the number of comments that this article attracted, particularly the favourable ones. Any credit should go to the Financial Accountability Office of Ontario (FAO), who assembled the results based on its own data and that provided by Statistics Canada. I simply summarized the FAO report.

    There were two issues raised in the commentary that I would like to address.

    Murray Christenson questioned whether per capita numbers should be used to compare provinces, although he did not suggest an alternative yardstick. I used per capita numbers because the FAO focused on them. However, an appendix to the FAO report showed the various revenue and expenditure numbers as a percentage of provincial gross domestic product (GDP), and the results were substantially the same.

    George Gilley’s comment showed that the results could have been presented in a better way. The first two findings were revenue of $10,415 per person and expenditures on programs (i.e. healthcare, education, etc.) of $9,829 per person. From that, Mr. Gilley inferred a surplus of $586 per person, which he thought was wrong. But he did not take account of the interest on the provincial debt of $858 per person, mentioned a few paragraphs later. When that is included in the province’s expenditures, the surplus of $586 becomes a deficit of $271 per person, the number referenced in my article.

    • Regarding your response to George’s comments:

      No one on the planet would have filled in those blanks reading the article as presented (10,415 – 9,829 – 858 = 272 not 271).

      Also, if the FAO expects Ontario’s net operating deficit to rise to $868 from $271 per person in 2018, these 2017 comparisons are meaningless.

      The debt load per person increased by 220% between 2017 and 2018? That is truly terrifying and the only relevant number in the article.

  12. Don McCormick on

    Patrick
    Thank you for your very knowledgeable analysis of the provincial finances for the year 2017. I am often frustrated when I hear knee-jerk comments that are presented without any rationale for the position taken. I would love to be able to respond to such comments but find I don’t have either the knowledge or expertise to respond in a rational and knowledge-based way. And, I refuse to sink to the same level as those presenting such knee-jerk comments. As a result, I don’t respond at all and I fear this leaves the impression that I agree with their position. We seem to living in a time when some of our political leaders are giving license to those people who throw out comments without due consideration of the facts and I consider them very dangerous people. Please let knowledge and rational thought return to our political discourse.

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