Ontario Budget Week

[CodeMonkey]

The deficit is now lower than economic growth anyway, which means our debt to GDP ratio has flatlined.. which is really the key metric as GDP is the measure on the governments ability to pay back. Believe it or not having a balanced budget actually improves finances as economic growth means your debt shrinks when compared to your revenues.

Oh I understand the Debt-to-GDP ratio, I've just gotten tired of explaining it to other people, even thought I keep seeing it still misunderstood in news headlines and comment sections.

 

[Northern Light]

Don't reduce one regressive tax.. Does tuition count?

In a word, 'No'.

That's not to say I disagree w/the shift. But it doesn't represent 'new money', its been entirely offset by taking away various credits. I'd still agree its an improvement; though not the best way to handle the issues. Regardless. A different issue from the one I mentioned.

No new investments in infrastructure.. New widenings of the 417 and 400 are the only formally "new" projects, but the province dropped 36 billion last year and is working out the details for more next year.. you expect just a rain of infrastructure spending every year into infinity?

I'm a pragmatist, not an idealist. I don't expect endless 'new money'. I do expect material progress. I would have no issue if that progress came in some other section of the budget; but as this has been a focus for this government, at least rhetorically, it was one area one might have expected further advances. Needless to say there are many worthy and needed investments. Its not just subways to the sky.

Prescription drugs.. not really on the agenda anywhere.

Incorrect. Kathleen Wynee ran for the Liberal leadership on a platform of incrementally moving to universal prescription drug care. It needn't be done all at once.

She noted the idea of paying for drugs that most likely would reduce health care costs by more than the drug expenditure, such as those than reduce blood pressure, reduce the liklihood of heart attack or stroke etc.

I would note that in Ontario, we have the ridiculous situation that many forms of 'chemo' can now be delivered outside the hospital; by pill, but if it is, you, the patient have to pay for it.

That can be up to $6,000 per round of treatment. While the Trillium drug benefit may reimburse some portion of your cost (much less than you might think), you still have to front the money.

There are definitely people going w/o cancer care as a result. Most doctors are incredibly decent people, who if aware of someone's circumstance will find a way to book the treatment in hospital.

However that costs the gov't over $1,000 per day; massively more than the cost of the drug.

Every province west of Ontario includes this type of coverage in their health care plan. Its highly affordable. Not Billions.

Go transit parking fees - politically unpopular and something that wouldn't be announced this year anyway, timing is everything and everything is timing, and GO is currently reviewing their parking strategies anyway. may as well wait until that study is done.
Tolls - don't HOT lanes count? Again, full on road tolls would be hugely unpopular and largely a global first, no major city globally tolls its entire freeway system as far as I know, especially not decades after construction. Want to commit political suicide? increase the cost of living dramatically for 90% of voters in your swing ridings.
Sales taxes etc.. again, complaints about budget deficits, then complaints about lack of tax cuts

I did not advocate either $10 per day parking at every GO station or massive tolls on every freeway. Merely progress.

Let's be clear, the next budget is pre-election, so unpopular moves won't be in that budget either.

If you want improvements in public services they have to be paid for either by cutting somewhere, and/or 'new money' or mostly likely some combination of the two.

Endlessly deferring tough decisions is a lack of courage, and one which makes voters all the more cynical.

I have no difficultly listing cuts where the money can be found either, but if think modest changes in GO parking fees or selective tolling are tough, wait for the reaction to merging the separate and public school systems for savings of $1.5 billion (conservatively).

***

You could toll express lanes only. Simple, easy, free alternative right along side.

You could charge only for 'sheltered' parking; or only in areas where public transit to the station is frequent.

Lots of options.

Saving the debt for last. Its not like the province just tosses all their deficit money in a hole every year, that is a structural deficit. You can't just fix it in a year short of mega cuts or tax hikes that would destroy an economy. You make small progress towards it, which they have been. Debt is slated to stop going up starting next year, as promised.

Hyperbole.

Ontario is now the largest sub-national debtor on earth.

That's not something we should be happy about.

Up to 1/3 of that debt comes up for renewal in the next five years, even a modest hike in interest rates could devastate public finance.

We (Ontario) will spend $11.8 Billon on interest expense next year, the third or fourth largest line item expense.

Enough money to pay for universal pharmacare and dentalcare and have enough leftover to balance the budget and modestly cut taxes.

***

I said I'm not partisan and not ideological and I meant both. I'd be happy to give another party a rough ride. But I'll judge each by its rhetoric and the potential it has to make change.

I'll happily consider incremental progress; but not none.

I found the budget deeply disappointing for its failure to take almost any issue seriously.

And for its squandering of money (see homeowner renovation credits again)........when there are much better ways to use those dollars.

 

[innsertnamehere]

Ontario has the largest budget of any subnational government globally. Its debt to GDP ratio is high, but manageable.

"transitional progress" on toll lanes.. again, HOT lanes. How do they not count? You say no progress is being made but willingly ignore the progress being made. The budget even states that the first HOTs open this year in Oakville.

again, complaining about lack of new money involved in OSAP payments then jumping right to saying you don't expect large amounts of new money.

 

[Northern Light]

This year's deficit drops from $7.5 billion in the previous budget to $5.7 billion. Next year's deficit drops from that forecast in the previous budget to $4.3 billion. And after that it's balanced.

Surely that shrinks the total debt from the total in the previous budget - rather than growing it. Given the dire economic times, I'd say that is better than one would have anticipated.

No, net debt is increasing.

The deficit, the rate at which the debt is being added to is slowing.

Total net debt will grow to over $300 Billion this year.

That means $11.8 Billion in interest cost, which could go to other priorities, were the debt tackled.

***

What dire economic times? Unemployment in Ontario is under 7% which in US terms (we calculate it differently than they do) would be under 6%.

We led the nation with economic growth exceeding 2.5% A number we haven't done better than in a decade.

These are GOOD economic times. (in Ontario)

 

[Northern Light]

Ontario has the largest budget of any subnational government globally. Its debt to GDP ratio is high, but manageable.

"transitional progress" on toll lanes.. again, HOT lanes. How do they not count? You say no progress is being made but willingly ignore the progress being made. The budget even states that the first HOTs open this year in Oakville.

again, complaining about lack of new money involved in OSAP payments then jumping right to saying you don't expect large amounts of new money.

Debt to GDP, even so far as we take that number as the appropriate measuring stick, needs to be the combined provincial and federal number, since there's only one economy.

The combined number is approaching 80%, which I, for one think is too high. Its very near the level that triggered the massive cuts during the Chretien-Martin era federally.

Then the Federal number was approaching 70% but the provincial numbers were much lower than they are today, particularly in Ontario.

****

As for HOT lanes, I consider them difficult to enforce, and therefore highly problematic. Its an expensive way to impose tolls. Straight up/down, pay to use this lane is much more efficient.

Moreover, for scale the amount of HOT lanes being implemented remains minuscule.

I'm not stuck on that choice, as I noted many other choices could have been made. Right-wing think tanks are just as likely as left-wing ones to point out how absurd the 'small business' corporate tax rate is and that it should be raised. The only difference of opinion would be what to do w/the additional revenue (ie. lower the general corporate rate and/or other taxes, vs public spending)

 

[CodeMonkey]

Hyperbole.

Ontario is now the largest sub-national debtor on earth.

That's not something we should be happy about.

Up to 1/3 of that debt comes up for renewal in the next five years, even a modest hike in interest rates could devastate public finance.

We (Ontario) will spend $11.8 Billon on interest expense next year, the third or fourth largest line item expense.

Enough money to pay for universal pharmacare and dentalcare and have enough leftover to balance the budget and modestly cut taxes.

Saying we have the largest sub-national on the planet sounds menacing, but when you understand the wide scope definition of what is sub-national government is, then you can see why we top the list. For example the City of London, England is a sub-national government, but unlike Ontario, they don't manage a health care system or education, that's the national government responsibility. Our debt would have been lower if the federal government was in charge of OHIP and the educational system and Ontario wouldn't have to take out loans to pay for them.

 

[Komiksulo]

Sub-national governments... Ontario is larger than California?

 

[LNahid2000]

Sub-national governments... Ontario is larger than California?

California doesn't have to pay for healthcare for their citizens.

I must also say, I hate when people say "omg the debt is so high" while looking at an absolute number rather than comparing it to GDP.

 

[rbt]

Ontario is now the largest sub-national debtor on earth.

That's not something we should be happy about.

Up to 1/3 of that debt comes up for renewal in the next five years, even a modest hike in interest rates could devastate public finance.

We (Ontario) will spend $11.8 Billon on interest expense next year, the third or fourth largest line item expense.

This also isn't a recent creation. In fact, the %age of budget reserved for interest payments has decreased by about 50% since 2000 (from 15% to about 9%). Of course, the provincial government had nothing to do with those good fortunes that caused a drop in interest rates; but it's the case none-the-less.

So, we've been spending 8% or more of the Ontario budget on interest for ~25 years; and the last few years have been the low point.

Not that that information makes it any better, but Wynne isn't any more to blame for it than Harris, Eaves, or McGuinty.

 

[CodeMonkey]

Sub-national governments... Ontario is larger than California?

Spending on government programs like Healthcare, Education, Highways, and Public Transit, then Yes, we're bigger than California.

 

[nfitz]

No, net debt is increasing.

The forecast debt at the end of the 2015/16 and 2016/17 years is lower than was forecast in the budget last year.

We led the nation with economic growth exceeding 2.5% A number we haven't done better than in a decade.

These are GOOD economic times. (in Ontario)

So it would seem!

 

[rbt]

Sub-national governments... Ontario is larger than California?

Actually, yes Ontario is larger than California (dollar conversion rate ignored); not in population but in terms of revenue and spending. If you go through dollar exchange then California is larget today but Ontario was larger from about 2007 through 2013; it's messy and labour/debt costs don't really change with exchange rates anyway.

California 2016/2017 revenue (direct and transfers from federal) is $120B USD; Ontario's 2016/2017 revenue estimate is $130B CAD.

http://www.ebudget.ca.gov/2016-17/pdf/BudgetSummary/SummaryCharts.pdf
http://www.fin.gov.on.ca/en/budget/ontariobudgets/2016/ch3b.html#t3-21

Given the substantial difference in population sizes, this clearly demonstrates the huge difference in responsibility.

 

[1overcosc]

Canadian provinces have much more responsibilities than other subnational jursidictions. Most public spending in Canada is at the subnational level, possibly the only country in the world where this is the case. So comparing Ontario to subnational jurisdictions in other countries isn't valid.

 

[Palma]

No tution for families making less that makes less than 50,000 - families do not burden tution costs, as there are grants so its students once they graduate

 

[TOareaFan]

Saying we have the largest sub-national on the planet sounds menacing, but when you understand the wide scope definition of what is sub-national government is, then you can see why we top the list. For example the City of London, England is a sub-national government, but unlike Ontario, they don't manage a health care system or education, that's the national government responsibility. Our debt would have been lower if the federal government was in charge of OHIP and the educational system and Ontario wouldn't have to take out loans to pay for them.

Only if you shift the cost of those programs to the Federal level but not the income to support them? Yes, if Ontario could maintain the level of income (taxes, etc) they have now but not have to pay for things that they pay for now they would be in the black. I think, though, if the split in jurisdictional responsibility was different....so would the split in where the tax dollars come from and go to.