Debt-ridden Ontario won't sell assets

It’s time for Wynne to face the facts about her government’s spending addiction.

(This column originally appeared in the Toronto Sun)

By: Candice Malcolm

Earlier this year, Ontario Premier Kathleen Wynne created a panel to make recommendations on how to sell or convert government-owned assets into cash for the province. After all, the province is buried deep in debt thanks to a decade-long spending spree. And there is no end in sight. Ontario is still piling on debt, running another $12.5 billion deficit in 2014-15.

But these high levels of borrowing can’t go on much longer, and the Wynne government is desperate for cash. So it makes sense it might turn its eyes to selling government-owned crown corporations such as the LCBO, OPG, and Hydro One. However, the panel, led by TD Bank CEO Ed Clark, recommended that Ontario hold on to its monopolies and not sell its assets.

Apparently, Ontarians are “well-served” by their government monopolies.

Clearly, the panel wasn’t created to consider how to best serve Ontario residents. It was asked to look for assets that could be sold to help balance Ontario’s lopsided budget. The premier is focused on how to best nickel-and-dime Ontario residents for more revenues. That is a very different task than ensuring Ontarians get the best services, which surely would come from more choice and competition and not from a permanent government monopoly.

While Premier Wynne is no doubt pleased she hasn’t been told to sell her beloved government assets, she is between a rock and a hard place. Her government’s books are in rough shape. Tweaking the LCBO’s buying system or allowing the sale of 12-packs in its stores, as the panel recommended, isn’t going to fix the problem. (That said, surely we can all agree that granting a monopoly on the sale of 12-packs to a beer cartel is the epitome of a government that doesn’t care about best serving the public.)

Unfortunately, the problem runs even deeper. Thanks to an accounting trick in the 2014 budget, Finance Minister Charles Sousa has already accounted for $1.9 billion in new revenues over the next two years from selling government assets. The government wrote the budget to include revenue from “asset optimization” of an extra billion dollars each year. But to achieve this, the government will actually have to sell off some assets, which would run counter to the panel’s advice. If the government follows the panel’s recommendation, the budget deficit would soar even higher. (The panel did claim its modest recommendations would result in a $2 billion to $3 billion net gain for the government.)

In fact, the premier appears to use these “expert panels” to avoid having to make tough and sometimes unpopular decisions. But in this case, the decision falls right back on her shoulders. Kathleen Wynne is back at square one. Instead of looking to find ways to squeeze Ontario families with more taxes and “revenue tools,” she’d be wise to look at the other side of the equation: The spending side.

The reason for the budget deficit is that government spending has outpaced government income year after year. The Liberals keep spending more than they bring in, and the difference gets tossed on the public’s credit card. That card has reached its limit. It’s time for Wynne to face the facts about her government’s spending addiction. She needs to cut up those high-interest credit cards, start scaling back government spending and get Ontario’s fiscal books back in order.