Sudbury - Draconian cutbacks delivered by the Mike Harris Conservative government are back, or should be, according to economist Don Drummond.
The former TD Bank analyst released his prognosis of the Ontario economy along with hundreds of cost cutting measures for public services the day after Valentines Day. The report is available on the website of the Ontario Ministry of Finance.
“To meet its own goal of a balanced budget in seven years, the (Ontario) government will have to cut program spending more deeply on a real capita basis, and over a much longer period of time, than the Harris government did in the 1990s,” Drummond wrote on page 10 of his executive summary.
That is because Ontario’s $14 billion deficit in 2010-2011 was, “equivalent to 2.3 percent of gross domestic product (GDP), the largest deficit relative to GDP of any province,” he stated on page one. Furthermore, “net debt came to $214.5 billion, 35 percent of GDP,” he added. Drummond noted that if Ontario pursues a status quo scenario then, “the deficit would reach $414.4 billion, equivalent to just under 51 percent of the province’s GDP.”
During the Harris years social assistance rates were cut by 22 percent and were hotly contested by community activists including those in Sudbury, especially after the death of a woman who was denied welfare services.
Drummond proposes more severe cutbacks including:
-decrease program spending in most government ministries by 2.4 percent each year to 2017-18 resulting then in a total shortfall of 17 percent lower than the status quo projection, “a wrenching reduction from the path that spending is now on” Drummond notes on page two of his executive summary
-implementing higher water bills to recover the full cost of water and wastewater services
-cap growth in health care spending at 2.5 percent each year to 2017-18
-cap growth in primary and secondary education spending at one percent each year to 2017-18
-cap growth in post-secondary education spending excluding training at 1.5 percent each year to 2017-18
-cancel full day kindergarten program or delay its implementation from 2014 to 2018
The cuts will mean the elimination of thousands of jobs in the public service and education systems including 70 percent of the 13,800 non-teaching positions added to the education system since 2002.
Drummond admits, “our message will strike many as profoundly gloomy” and will surprise Ontario residents who are not aware of the “depth of the problem and its causes.”
During a media scrum in Toronto, Ontario NDP leader Andrea Horwath said one reason for the ballooning budget deficit is the extent of corporate tax cuts she estimated costing taxpayers and the provincial treasury $2 billion per year.
“Can we afford to continue spending on corporate tax cuts,” she told reporters after the release of the report. She said the report was too one sided, highlighting spending cuts while neglecting seeking new sources of revenues.
Conservative leader Tim Hudak doubted the Ontario Liberals had the fortitude to follow Drummond’s recommendations saying to reporters, “this report will disappear on the shelves.” Furthermore, “if the Liberals reject the Drummond recommendations what is their alternative?” he asked the press.
Locally, Sudbury MPP Rick Bartolucci thanked Drummond for the advice on on his Facebook site. “Our government will continue to move forward with a responsible plan to eliminate the deficit and create jobs for Sudbury families,” he posted.
Nickel Belt MPP France Gelinas was quoted by local media sources as saying she supported some of the recommendations such as increased funding to community health programs and chronic care but disagreed with others. “It is how it is to be done that is important,” she said on CBC Radio One. She also said last week that the report would be flawed because it did not consult with health care workers.
Sault Ste. Marie Liberal member David Orizetti, assistant to the premier, said on CBC Radio One Thursday morning that not all the Drummond recommendations will be implemented and that others will be implemented over time and not suddenly while noting spending on the education systems had increased under the reign of the Liberals in Ontario. He said spending on primary health care spending rose by 63 percent in the past decade and that efficiencies could be found to slow costs.
As for raising taxes, “that is the last place we want to go,” he affirmed. He also said the 500 OLG jobs at a headquarters operation in his city would not be eliminated if he had any say in the matter though one OLG headquarters operation was signaled out for closure by the Drummond report.
Bill Bradley is a Sudbury writer and freelance journalist.