Is this really what Ontario needs?
(This column originally appeared in HuffPo)
By: Candice Malcolm
After weeks of budget previews and new spending announcements, Budget Day 2014 is finally upon us. And despite Finance Minister Charles Sousa’s assurances that his government is edging closer to a balanced budget, we should expect another year of big borrowing and tax hikes to cover this government’s big spending addictions.
Despite warnings from across the political spectrum and across the country, this government refuses to budge. They cannot bring themselves to acknowledge the severity of the situation at hand. Instead, they continue to make more promises and ignore the long-term interests of all Ontarians.
Three years after the Liberals appointed economist Don Drummond to provide a roadmap to fix the province’s finances, Ontario is no closer to a balanced budget. Our province’s finances continue to spiral as we head full-steam towards our own fiscal cliff — that is, the day interest rates increase, our credit rating is once again down-graded once, or our international bond lenders refuse to extend our line of credit for another year. And judging by all the spending announcements over the past few weeks, this government is merely pushing its foot down on the accelerator.
Mr. Drummond warned that if the status quo is maintained, the government’s annual deficit would inflate to billion by 2017-18. Not only is the Wynne government clinging to that status-quo, they are still driving us in the wrong direction. Government spending grew more than twice the rate of GDP growth in 2013.
It all boils down to politics. Wynne and her team recognize that an election is inevitable, and believe they can only hold on to power by making big promises. They know they are in deep trouble if an election focuses on their track record of scandal and mismanagement. So they instead opt to woo the fence sitters with taxpayer-funded goodies and shiny objects to distract from their record.
Corporate welfare. Energy subsidies. Youth employment slush funds. Diverting gas taxes. New harebrained government schemes and solutions in search of a problem.
As the Wynne government scrambles to get its election machine into action, bureaucrats in the finance department have been leaking like a sieve to the Progressive Conservatives. Just how bad must it be inside that department for employees to risk their jobs in order to ring the alarm bells on this government? It’s surely frustrating to work for a finance minister who is willfully ignorant of the looming debt crisis, and whose only solution to a stagnant economy is to throw more borrowed money at it.
Ontario holds the world’s seventh-largest non-sovereign debt (behind only the Euro-debt crisis countries like Greece, Spain and Ireland) and is the largest borrower of any sub-level government in the world. Scary stuff. Especially when the government-of-the-day is more interested in winning short-term battles and holding onto power, and are willing to sacrifice future taxpayers for their own personal gain.
The grim fiscal outlook in Ontario is cause for concern. Ontario’s sluggish economy and anemic recovery are dragging down the whole country. Even Quebec has awoken to its fiscal responsibilities, recently electing a government committed to balancing the budget within two years and dedicating revenue to debt-repayment and tax cuts.
Ontario under the Wynne government has shown no such signs of progress. Instead, we are told the government is being lead with “safe hands.”
Those safe hands have given us seven consecutive deficits, buried us under a mountain of debt approaching 0 billion, and have allowed interest on the debt to become the third-largest and fastest growing line item expense in the budget.
Safe hands? Feels more like the cold hands of an undertaker.