Ontario Tories vow to tackle fiscal issues after report reveals dramatic rise in spending
One expert said the review buries the fact that Ontario's debt-to-gross domestic product ratio has remained relatively stable in recent years
TORONTO—Ontario’s Progressive Conservatives vowed to address the province’s ballooning debt and deficit without slashing jobs after a review of government finances revealed spending had grown dramatically under the previous Liberal regime.
The government insisted the findings were not a precursor to cuts but critics said the review released Tuesday presented spending figures out of context and marked the third announcement on the province’s finances in less than a week.
Treasury Board President Peter Bethlenfalvy said the review, combined with an independent commission that recently found the province was facing a $15-billion deficit, will help the government chart a course back to balanced budgets.
“Faced with this challenge it would be irresponsible not to act,” he said. “With each passing day the shadow of these Liberal deficits will only grow.”
The review looking at 15 years of Liberal spending was commissioned this summer and conducted by accounting firm EY Canada. It had previously been called a line-by-line “audit” but Bethlenfalvy said that type of exercise would have taken far longer.
It found Ontario’s operating expenses grew by 55 per cent over 15 years and highlighted that the province’s debt stands at $331 billion—a jump from the $158 billion in 2003. The province now spends $12.6 billion a year on interest payments.
The report suggested finding savings through moves that included monetizing some assets and creating a “digital first” approach to government.
“In light of the evidence around expenditures and their disconnect from results and outcomes, it is clear that taking decisive action is the only way forward to put Ontario on a sustainable fiscal footing,” it said.
Bethlenfalvy said the government will find savings by modernizing services and re-training some civil servants to avoid job loss.
“This is not a blueprint for cuts,” he said of the review. “We will return Ontario to balance on a timetable that is modest, reasonable, responsible and pragmatic.”
Sheila Block, senior economist for the Canadian Centre for Policy Alternatives, said the review presents spending and debt figures out of context and doesn’t take into account events like the global recession that occurred during the Liberals’ time in office.
“This was an ideological document and it set the stage for reducing the role and scope of government,” she said. “It left a big option to deal with Ontario government debt and deficits off the table, which is to increase tax revenues.”
Block said the review buries the fact that Ontario’s debt-to-gross domestic product ratio has remained relatively stable in recent years, a key measure when it comes to the province’s ability to carry and potentially repay the balance.
“A debt number on its own doesn’t mean anything,” she said. “If it was PEI that had Ontario’s debt level, that would be a lot more serious than if it’s Ontario.”
Block said she will be watching the government’s upcoming Fall Economic Statement to see what it does with the report recommendations.
“To claim you can cut taxes, that you can maintain services and maintain employment while at the same time cutting government expenditures, that arithmetic doesn’t work,” she said.
NDP deputy leader Sara Singh said the review suggests the government is preparing to cut and privatize public assets.
“What the report is telling us … is this government is committed to making deep cuts,” she said. “We’re not sure where those cuts are going to be, whether they’re going to be to health care or education but I think they’re really setting the stage to make those cuts.”
The Liberal caucus said in a statement Tuesday that the report confirms their government kept public sector costs down while increasing transfer payments to hospitals, schools and municipalities.
“Doug Ford should be focused on governing, not campaigning,” it said. “Doug Ford inherited a government that kept internal spending to effectively zero.”
Ontario Public Service Employee Union President Warren “Smokey” Thomas said the review is a sign of a “political tsunami” ahead for the 155,000 workers his group represents.
“At OPSEU we don’t pick fights, but when it comes to protecting our vital public services, the communities that rely on them, and those on the frontlines, we’ll never back down from one either,” he said.
The results of the review were announced a day after Ford revealed plans for a special committee to dig further into the province’s fiscal situation, while slamming his predecessor’s handling of Ontario’s books.