Our province is in the throes of a jobs, debt and spending crisis. Presumably the McGuinty government will declare its intentions on how to begin turning things around in its March 27 budget. It has been a long time coming — and this is a government with a lot to prove.
Ontarians are staring at a $30-billion deficit and a $411-billion accumulated debt. These numbers are so staggering that they lose meaning unless we step back to gain perspective. I did that recently in New York, where I met with leaders in the global financial community. These individuals are utterly impartial, and see things only through the unforgiving realities of global economics and market conditions.
A singular theme emerged repeatedly — the link between unsustainable debt and economic growth. Businesses know that governments with high debt loads cannot afford lower taxes or the best infrastructure — two basic attractions for investment and job creation in any jurisdiction. So, by demonstrating it has a credible, measurable plan to bring down debt, government can inspire business confidence. And when businesses have that confidence, they will invest, expand and hire.
Ontario’s debt is the symptom of an underlying illness: over-spending. On that point, if there’s one good thing to have emerged from the debacle in Greece, it’s that people now understand how neglect of debt issues can quickly become a crisis, especially if an economy sustains an unexpected shock, or there is a sharp rise in the cost of borrowing. At such times, heavily indebted governments lose all fiscal room to manoeuvre — and can lose control of their own destinies as a result.
Owing to this heightened awareness, a measurable debt management plan will be the central test of the budget: It will be essential to show taxpayers, businesses, credit rating agencies and international investors that we have an integrated, pro-growth plan for recovery. Yet it’s not just the fallout from the eurozone crisis driving this scrutiny: When Don Drummond took a closer look at Ontario’s books, he found that instead of balancing the budget, the government’s plan would in fact double the deficit and nearly triple the debt from 2003 levels. When the credit rating agency Moody’s looked late last year, they put us on a negative credit watch. When Ontario’s Auditor General looked before the Oct. 6 election, he concluded there was “no clear strategy or forecast” for reducing Ontario’s crippling debt.
I have argued consistently that the government does not recognize the gravity of the situation and the need for bold, integrated action to reduce the size and cost of government as I have proposed. Otherwise they would have: put an end to corporate welfare; enacted a mandatory public sector wage freeze; docked Ministers’ pay if they missed the required fiscal targets; cut the size of Cabinet to reorient its focus to private-sector job creation and the debt crisis; launched a rigorous program review using the best thinking of elected officials, public servants and Drummond commissioners to deliver a substantive fall economic update that would have cut spending — not increased it. And moved up the date of the budget.
In tandem with shrinking our bloated public sector, bold action should have included kick-starting our private sector economy by lowering business taxes; enacting a plan for affordable energy by putting an end to costly wind and solar subsidies; reducing the regulatory burden by one-third and modernizing Ontario’s apprenticeship system to create 200,000 new skilled trades jobs.
Needless to say I did not become premier last October. So I took my ideas to the gentleman who did, in a meeting last November 18. Dalton McGuinty rejected every one of them. And here we are today, with a business-as-usual Premier who simply stalls for time, blames everyone but his own government for Ontario’s difficulties, shelters pet projects with no way to pay for them and rejects meaningful savings measures.
The March 27 budget is a turning point. It falls at last to Dalton McGuinty to confront the scope of our debt, jobs and spending crisis. No papering over the cracks. No phony war with Ottawa. No accounting tricks. No diversions. No claims that spending increases are slowing — they’re still spending increases. We need a real plan that gets the fundamentals of our economy back on track.
As Leader of the Official Opposition in a minority Legislature, I take seriously our obligation to compel the government to do the right things in the right way. Accordingly, I will judge the budget against the benchmarks I have described.
I call on all concerned Ontarians to do the same.
Leader, Progressive Conservative Party