Ford has at least realized that Ontario has a serious problem with its finances, unlike the Liberals and NDP. He’s also given us truth in accounting, something the Liberals conveniently threw overboard. I’d suggest that’s excellent.
At least we finally have the basis for an honest, data-driven public discussion about where the province goes with taxation, spending and debt. Whether Ford has the guts to follow through on this is an open question, because our fiscal situation is bleak. But it’s pretty clear that neither the Liberals nor the NDP have any interest in the subject, so by comparison Ford looks good.
In point of fact, I don't think he's done any such thing, let alone done it in an 'excellent' manner.
Before going further, let me add I consider myself a deficit hawk, I not only prefer balanced budgets, especially in good economic times; but I would support reduction of the absolute net debt as well.
But let's be perfectly clear, the deficit numbers as stated are not accurate.
They went from understated, largely because hydro pricing related debt appeared on agency/corporate books rather than government books; to overstated.
There is really no dispute in the accounting world that pension surpluses should be counted against deficits, because pension shortfalls count in deficits. That's just even-handed accounting.
The AG's change of heart on this file was almost certainly politically motivated and rather disheartening to see, as this way of accounting for pensions pre-dates the Liberals being in power.
Even the Conservatives own report from former BC Premier Campbell agrees they should count, though was willing to suggest some discount due to lesser liquidity.
A deal on how to account for that surplus will doubtless be announced in the not too distant future and at least 2B of the deficit and perhaps as much as 4B will be erased overnight.
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Now, we can agree there is no need for a deficit, nor should there be one in times of 2% plus economic growth.
But Ontario's per capita program spending is already lowest or second lowest in Canada in any given year.
The only major reduction that should be on the table is merging the Catholic and Public schools systems and shelving school boards altogether. That would ring in savings of at least
1.5B per year, conservatively. Up to 2.5B is realistic.
I haven't seen that raised by the current government at all.
What they are proposing (and have partially implemented) is tax cuts. Even though Ontario's tax burden is among the lowest in Canada and we have a deficit of between 8.5B-13.5B in the current fiscal year.
The cost of adding that burden is enlarging the deficit rather than reducing it.
Its also doing so to very little benefit.
Cancelling this year's minimum wage increase that had been scheduled for January 1st also had the effect of growing the deficit.
The numbers are in from the last increase and showed net job growth and net revenue growth correlated to the previous minimum wage hike.
Based on those numbers, the government chose to enlarge the deficit between 300M-900M by cancelling the increase.
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The single most important move to balance the books would be an honest discussion about a tax hike.
Not on income tax where Ontario is near a reasonable number now.
But most likely on sales tax. A 2 point increase (which would only put us back to where we were pre-Harper, would bring our HST in line w/Quebec, and all of the Maritime provinces).
It would raise at least 6B per year and maybe as much as 8B.
But taking the lower number, and combining it with the the above savings I identified, the budget would fall between balance and surplus.
The government has given no indication it intends to pursue this line of thinking either.
There are a couple of very defensible, if small, public policy changes this government has made........an honest discussion or action on the states of the province's finances is not one of them.