What is the plan, Premier Ford?
Last week, I wrote about the huge federal debt we are facing going in to an election year; a deficit nearly three times the size Justin Trudeau promised when he became Prime Minister and a balanced budget delayed to 2040, not 2020, as he had committed to. The debt itself now sits at $665 billion. These are not Conservative facts; these are Government facts. I stand by what I said in that column. Federal finances are in a serious mess, endangering our economic future and Justin Trudeau should be held to account for this when the election is held in October.
However, former Huntsville Mayor, Claude Doughty, in a comment to last week’s column made an extremely valid argument when he pointed to the financial mess that Ontario is in. It is at least as big a problem as our Federal debt. As Doughty says, and as I have said on numerous occasions, Ontario has the largest sub-national debt of any jurisdiction in the entire World. There is simply no excuse for that and future generations will pay dearly for it.
What is staggering is that Ontario has been a Province since 1867 and yet 87 per cent of its public debt, that was projected to be more than $348 billion by the end of last year, has been accumulated only since 1990! All political parties must take a degree of responsibility for this. During that period, the N.D.P. were in power for five years, the Conservatives for eight years and the Liberals for 15 years. The Liberals, under David Peterson were also in power between 1985 and 1990 during which time he increased the provincial debt by $10 Billion. To my recollection, the only time a budget was balanced was when Mike Harris was Premier. Kathleen Wynne claimed to balance the budget in 2017 but in fact, $6.276 billion was added to the Provincial debt in that year.
There is one significant difference between the financial challenges faced by the Federal Government and those faced by the Ontario Government. In Ottawa, Justin Trudeau and his government are nearing the end of their mandate, during which he has added significantly to the National debt. He is running out of time to do anything significant about it and indeed has shown little interest in doing so. Doug Ford in Ontario, on the other hand, is just six months into his majority mandate. He did not create the debt or the financial crisis that Ontario faces but he did run on a platform to fix it. He has three and a half years left to do that.
And so Premier Ford, it is a fair question to ask. What is your plan? We know that “Help is on the Way” and that “Ontario is open for Business” but what is your actual plan to eliminate the deficit and significantly reduce our debt? What do you plan to do to get our credit rating back and to make people feel better about our economic future?
The hard truth is that there are no easy answers and there is no alternative to harsh measures if Ontario is to return to the economic engine of Canada that it once was. We have a very deep hole to dig out of. Sunny ways have not cut it in Ottawa and they will not cut it here. We need reality. If Doug Ford’s goal is to be a popular and well- liked Premier over the remainder of his term, he is either going to be disappointed or he will not be doing his job. It is as simple as that. There are too many people who will not like what has to be done, especially when it affects them. “Not in my back yard, they will say”. It’s a populist thing.
During the last six months we have seen some glimpses of what we can expect from a Ford Government. They appear to be on an austerity agenda with some cuts and reduction costs here and there and little new spending. But these are small, ad hoc, measures, that do little if anything to fix the real problem and do not set a pattern for genuine and effective financial reform. What we need, what we desperately need to see, is a Grand Plan.
That plan may come in a Provincial Budget, but it needs to come this year and it needs to spell out long term initiatives that will balance budgets, reduce debt and ensure Ontario’s economic future. There is no more time to waste. Here are just a few things that need to be considered.
- Zero-based budgeting. Every ministry that wants to add a program must cut something equal in value. There is lots of waste in government. Go find it.
- Irrevocable legislation that prohibits Provincial deficits except in a period of official recession. Municipalities are not allowed to run deficits. Why should the Province?
- A special “debt tax”, time limited to say 10 years, on the top two per ent of income earners and used only and solely to reduce Ontario’s debt.
- A one per cent increase in the Ontario Sales tax to meet necessary government expenses in the area of health, education, the environment and infrastructure, without having to go in to deficit to do so.
- A moratorium on public sector hiring, with the exception of some essential services.
- A review of all Government Boards, Agencies, Tribunals and programs, to ensure relevance, need and effectiveness.
- The sale of all unneeded Government real estate. There is a lot of it.
- Consider the sale of the LCBO. It would provide a huge capital benefit and still be subject to tax on alcohol.
- A Manufacturing and Economic Development plan that really does show that Ontario is open for business.
These are indeed harsh measures and to some, they will actually be hurtful. They may even defeat a government, if their principles are more important than the retention of power. But these or other initiatives like them, are what will be needed if Ontario has any chance at all of putting its financial house in order.
It is worth repeating what Claude Doughty wrote, “The legacy we leave the next generation is absolutely unconscionable.” Unless stringent measures are taken now, he will be dead right. That is why, Premier Ford, we need a plan.
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