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Global Affairs, Ontario Politics

Ontario should brace for cuts ahead of March 2012 budget

Ontario Premier Dalton McGuinty and Finance Minister Dwight Duncan.

Matt Gurney in the National Post lays it on a little thick when he calls the Ontario Liberals – and Premier Dalton McGuinty and Finance Minister Dwight Duncan in particular – “financially illiterate” for their recent announcement that the province will bring in roughly $1B less than anticipated.

Projected growth is just that – projected: something that is contemplated, devised, or planned – and never firmly stated. I doubt the Minister or the Premier would have staked their political future in the midst of a global recession on the bold notion that growth in Ontario would have continued at the anticipated (and, to be fare, sincerely hoped for) rate of 2.7 or 2.5 per cent. Rather, it has dropped to a 1.8 per cent forecast for 2011-2012 according to the Ottawa Citizen, which translates into roughly $1.3B less coming into provincial coffers than originally anticipated.

To protect vital ministries, Duncan himself has admitted that if projected growth drops to 1 per cent there could be 33 per cent cuts to Ministries across the board, but health care and education will not be touched.

Gurney is quick to indicate that the Liberals have pulled this “trick” previously in claiming before an election to have found $1B to offer on election promises of tax credits and services. Inevitably, this is followed by a post-election announcement that their calculation was wrong, and the money does not exist. Is this political trickery? Or is this just politics?

Even Gurney points out in the Post that the Liberals “campaigned for re-election more on their record (such as it was) than any big plans for the future. Probably wouldn’t have worked if the Progressive Conservatives hadn’t run a hilariously bad campaign … but they did, so it did.”

And he insinuates that the addition of $1B for use in the October general election would have helped to “shake loose” a few votes across the province. Not enough for a majority, but enough to stop the bleeding, perhaps.

He claims that McGuinty and Duncan have

take[n] an accounting twitch that suggests the province is bleeding to death somewhat slower than thought, and then ramp[ed] up spending to maintain the level of gushing blood.

And against my better judgement I will agree with Gurney on this: the Liberals lack of strength to tell the people of Ontario just how dire the current financial situation may be while continuing promises of increased spending and growth will surely hurt the ability of the average Ontarian in the long run to cope with the service cuts and austerity measures we all know are coming.

Stephen Harper did just that to great (often repetitive) effect in the last federal election, telling reporters and the Canadian public that economic danger lapped at our shores, and we must realize the hazards and instability of our current economic situation. It is precarious, Harper told us, and many believed him.

Mr. McGuinty has not been so honest with the people of Ontario, if you want to call Mr. Harper honest. Tough love is still love, and while no one enjoys hearing the matter-of-fact state of the economy when times are tough, knowledge is power, and ignorance no bliss in the long run. Too bad that reality in recessions tends not to win elections.

Gurney is right to point out that the experience in the United States and Europe in the past year with untamed deficits should have given both McGuinty and Duncan pause in their efforts to assure Ontarians that growth will continue to rise, tax credits can continue unabated, and cuts will be painless. None of which, as we all know, can possibly be true.

When Duncan told reporters at Queen’s Park that the government “will not pursue austerity measures that harm our economy,” New Democratic leader Andrea Horwath was right to have doubts.

“We’re skeptical about promises that – the deep cuts are somehow going to be painless,” she said. “We’ve seen that kind of language before and seen the results. Everyone from Mike Harris to Paul Martin talked about cuts that were going to be painless and of course we watched as those cuts were actually very painful.”

The current deficit in Ontario rests at just over $16B, one billion more than the government predicted before the election. And with Duncan claiming to be able to eliminate the deficit by 2018, just over six years away, it is silly to talk about tax credits and “painless cuts” when everyone knows the emperor has no clothes.

There will be cuts – they will happen. And to believe they will be painless is naive; rather, the province deserves a Premier and Finance Minister who can be honest and forthright with Ontarians about what the cuts will entail, and how they are working to lessen or soften the negative effects. Both McGuinty and Duncan are capable of this – but whether they will or not is another story.

“I think it’s fair to say the next budget will probably be one of the more significant budgets that our government has delivered,” Duncan claimed in the Citizen.

And how.

About awreeves

Editor-in-chief at Alternatives Journal. Author of 'Overrun: Dispatches from the Asian carp Crisis'.


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