While the recent throne speech predictably focused on COVID-19, the only significant non-pandemic promise was a pledge to balance the budget relying solely on economic growth, with no spending cuts or tax increases.
In other words: the Ontario government has no plan to save money and it’s counting on rosy economic projections to deal with massive deficits at some undetermined point in the future.
Ruling out a tax hike is certainly a good thing because Ontarians can’t afford to pay even more, but the government’s approach to the looming debt crisis is dead wrong.
To rule out cutting spending anywhere is a major disservice to Ontario taxpayers. There are far too many examples of the government wasting money.
The Ford government could make a major dent in the province’s spending problem by ending corporate welfare.
Last year, the Ford government gave away nearly $300 million to the Ford Motor Company to help with assembly plant renovations in Oakville.
With the province’s finances in such dire shape, handing over hundreds of millions of dollars to a Fortune 500 company was a huge mistake. Unlike Ontario, the Ford Motor Company doesn’t find itself short on cash.
Another important move would be ending Ontario’s political welfare regime.
Despite Ford’s promise to end political welfare in the province, Ontario taxpayers still hand over millions of dollars a year to political parties. The parties can blow that money on whatever they want, including lawn signs and attack ads.
To make matters worse, the Ford government quietly changed the party financing rules earlier this year to give Ontario’s political parties a $10-million advance just in time for next year’s election.
Does anyone seriously believe that the province should be racking up additional debt, to be paid for by future generations, just so political parties can get rich?
It is also time to ask government employees to share in the burden of the recent downturn.
The pandemic left hundreds of thousands of Ontarians unemployed. Many who kept their jobs saw their hours reduced or their salary cut back. Meanwhile, government bureaucrats have been enjoying pay raises.
Ontarians have been experiencing a tale of two pandemics, with hardship and sacrifice amongst hardworking taxpayers while government bureaucrats have barely felt the impact of the economic downturn.
With a run-away $33 billion deficit and no clear plan to balance the budget, it is only fair to ask government employees to take a wage freeze to ensure the government can get itself back on sound fiscal footing.
According to the Parliamentary Budget Officer, without spending cuts, Ontario will fail to balance the budget until at least 2095.
That’s simply unacceptable.
The province already spends over $1 billion per month on debt interest. If Ontario doesn’t correct course, huge portions of the budget will have to be allocated to interest payments, crowding out government spending elsewhere.
The Ford government needs to tell taxpayers the hard truth. The budget will never balance itself without some spending restraint. And, if the province fails to act now, dealing with Ontario’s debt crisis will only get more difficult.
Saskatchewan allowed its debt to get out of control just a few decades ago. An NDP government was forced to close 52 hospitals just to keep the lights on.
Ontario is the most indebted sub-national unit in the entire world. If we don’t want to see what happened in Saskatchewan happen in Ontario, the government needs to act.
To avoid more pain tomorrow, the Ford government needs to make difficult choices today.
Jay Goldberg is the Interim Ontario Director for the Canadian Taxpayers Federation.
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