FOR IMMEDIATE RELEASE: April 30, 2019
QUEEN’S PARK – During debate on the budget bill, Haldimand-Norfolk MPP Toby Barrett recalled some advice from his grandmother while speaking to Bill 100, the Budget Measures Act.
Barrett recalled his grandmother advising “Neither a borrower nor a lender be”, emphasizing government eventually has to pay back its debt, and that is something being addressed through the budget process.
“It’s very important to realize that looming over this process is not only a large structural deficit in the last fiscal year of the previous government, leaving behind a $15-billion deficit after 15 years of overspending, but they’re also leaving behind a massive public debt of more than a third of a trillion dollars,” Barrett said in the Legislature. “Speaker, that’s 3-4-7 with nine zeros behind it. So at $347 billion, Ontario—and we just heard this mentioned—is the most indebted subnational government anywhere in the world.”
He pointed out interest payments are the fourth-largest item in the 2019 budget, only behind health care, education and social services. High interest payments reduce the amount of money the government is able to spend on priority issues like health care, education and infrastructure.
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For
more information, contact MPP Toby Barrett at 519-428-0446 or toby.barrett
@pc.ola.org
ONTARIO LEGISATIVE
ASSEMBLY
Official Hansard
Monday, April 29, 2019
Mr. Toby Barrett: I appreciate the opportunity to address Bill 100, Budget Measures, and I’ll mention I’m yielding part of my time to the member from Markham–Unionville.
As we know in this House, this past April 11 marked the Doug Ford government’s first budget. It’s very important to realize that looming over this process is not only a large structural deficit in the last fiscal year of the previous government, leaving behind a $15-billion deficit after 15 years of overspending, but they’re also leaving behind a massive public debt of more than a third of a trillion dollars. Speaker, that’s 3-4-7 with nine zeros behind it. So at $347 billion, Ontario—and we just heard this mentioned—is the most indebted subnational government anywhere in the world.
The member from Guelph, who just spoke, relayed several homilies. I always recall my grandmother indicating to me when I was at a very young age, “Neither a borrower nor a lender be.” In modern business and modern governments that could be unrealistic, but I just dread the thought if my grandmother’s advice was to come to fruition.
This $347 billion has to be paid back. It is owed. You have to pay back your debts. Nobody here has any idea how to pay back $347 billion. Interest payments alone—$13.3 billion last year. As we know, it’s the fourth-largest item in this 2019 budget, only after health care, education and social services. Again, that’s money not going to our hospitals, our schools, our vital infrastructure.
Now, Speaker, interest rates began to rise in 2017-18 and there is an increasing risk the government will have considerably less flexibility in coming years to foot the bill for some of these key services.
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Some will know—I think it was last Wednesday, April 24—the Bank of Canada held its overnight rate at 1.7%. There was a feeling it could increase. They indicated the global economy has slowed; the Canadian economy has slowed. Oil prices are not good—trade policy problems. Essentially, in the coming budget year there will be five more announcements from the Bank of Canada. Which way it goes is dependent on the US economy, of course; dependent on inflation; dependent on our nation’s gross domestic product; and with respect to where the housing market may be going.
The Bank of Canada in the recent past has raised its key lending rate five times between April 1, 2017, and October 24, 2018. When our province refinances debt at a higher interest rate than it paid on that maturing debt—it’s a bit of a no-brainer—then the average interest expense will rise. This means more money going towards interest expense; therefore, add that to the increasing annual deficit and, ultimately, the debt.
I think, as we all know—some people may not realize it—the debt is nothing more than accumulated deficits over the years. In 2018, both Moody’s and Fitch credit rating agencies revised their rating outlook for Ontario’s debt from stable to negative, reflecting their assessment of increased credit risk. While Ontario’s credit rating—this is different from the credit outlook—remains unchanged, the four main credit rating agencies cited a number of concerns regarding Ontario’s credit outlook: again, the high and rising debt burden, the projection of ongoing deficits—we’re going to see deficits for the next five years in this budget—and that ever-present risk of an economic downturn. Anyone who’s spent any time studying economics would know that economies go in cycles.
Very clearly, Ontario’s deficit and debt represent lost opportunity for all of us in Ontario. It’s a fiscal albatross around the neck of those coming along in the future, and I consider it a very worrisome situation that leaves us extremely vulnerable to what I consider that inevitable economic downturn.
Speaker, the budget for fiscal year 2019-20—I think this bears repeating. We are doing our best in this massive document to restore accountability, restore sustainability and restore trust in Ontario’s finances. Through the Report of the Independent Financial Commission of Inquiry, we learned the previous government left Ontario a deficit of $15 billion, as I mentioned. The report uncovered how the previous government continually and systemically, almost insidiously, abused our collective trust, wasted resources and recklessly was spending the province to the brink of a fiscal cliff.
The mess that we’ve inherited cannot be overstated. All of us are now seeing the results of 15 years of this mismanagement that is unsustainable, is downright irresponsible, and that has put our children at risk.
Post-budget, I know there were an awful lot of people concerned about government spending—the spending announcements that we’ve made, given the deficit and the debt—and, of course, there are people concerned about cuts. That’s the nature of budgets. That’s the nature of fiscal planning. Essentially, that’s the nature of economics. Economics, in my definition, boils down to the allocation of scarce resources.
Speaker, if we fail to act, if we don’t get spending under control, we won’t be able to protect the public services that I summarized. It does require making some unpopular decisions, even though the budgets for key ministries like health and education are going up, not down, in spite of what we’re hearing from the opposition and in spite of what we may be reading in some of the media. I can attest from 23 years in this Legislature. I have never seen a health budget go down. I have never seen an education budget go down. It doesn’t happen.
People expect us to protect the important stuff. They want us to continue to strengthen education, and obviously, public health care; to protect the social services for those who are the most vulnerable. But it has to be done in a thoughtful, measured, forward-looking plan.
We have set goals in this document, obviously: to restore fiscal balance in a responsible way, the budget will be balanced in five years; to protect what matters most, as I mentioned; and to make Ontario open for business, open for jobs. For example, there’s no new taxes, there’s no tax increases. This can be done. That’s doable. Again, in my 23-year career, I have never voted for a tax increase. I’ve never voted for a new tax.
I don’t have much time left at all. I have a document here that summarizes $26 billion in much-needed tax relief for individuals, families, businesses:
—$3 billion in tax increases that were planned by the Liberals are not going to happen under this present government;
—we canceled the cap-and-trade carbon tax and our Liberal Prime Minister is bringing one in. That’s going to cost us another $10 billion;
—$2 billion is the price tag for LIFT, the Low-income Individuals and Families Tax Credit;
—helping families through the Childcare Access and Relief from Expenses tax credit—that’s a $2-billion expenditure;
—canceling $150 million in fee increases for hunting and fishing licences, registration licences for vehicles;
—introducing the Ontario Job Creation Investment Incentive, something I hear the opposition really not talking much about, resulting in almost $4 billion in corporate income tax relief and delivering early on our government’s commitment to cut corporate taxes. That creates jobs. That boosts industry; and
—increased funding of almost $4 billion for electricity tax relief.
All of this is being done with no new taxes and without jacking up taxes.
The Acting Speaker (Mrs. Lisa Gretzky): I recognize the member for Markham–Unionville.
Mr. Billy Pang: First and foremost, Madam Speaker, I would like to echo the member for Haldimand–Norfolk and thank our Minister of Finance and the President of the Treasury Board, along with all the Ontarians who we consulted, who helped to produce the 2019 budget—a job well done.
I’m proud to stand behind the budget, which I believe delivers what our province desperately needs to thrive and grow. We’re ensuring that balancing the budget is not an end in itself, but rather a necessity in order to protect what matters most: our health care, education and other key public services.
In addition to balancing the budget and protecting our critical public services, we will be bringing $26 billion in relief to individuals, families and business over the next six years without raising taxes. Our plan restores trust and sustainability in our province’s finances for generations to come while bringing real relief to families and businesses today.
As a father with two children in public school, the part of this budget that excites me most is funding increases into the education system. We are investing record amounts in capital funding into our education system, which will be used toward fixing our crumbling schools.
We are proposing changes to class sizes that would better align Ontario with other jurisdictions across Canada. From kindergarten to grade 3, there will be no changes.
Students in grade 4 to grade 8 will see a minimum average increase of one student per classroom. Secondary students will see an average class size of 28 students. This change will align Ontario with other jurisdictions in Canada.
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This proposed change will be phased in over four years. The government is currently consulting with our education labour partners on the proposed change to class sizes. This consultation will continue until May 31, 2019. The ministry has reflected the proposed change in the GSN so that school boards are able to prepare their budgets for the upcoming school year. Once the class size consultation has concluded, the government will move forward on next steps, including confirming potential changes to regulations in time for the 2019-20 school year.
Some of the critiques we have been hearing over and over from the opposition are that large classrooms will lead to lower test scores and worsen the quality of education. I wonder how much of this statement is based on facts versus fiction. If we simply look at the data provided by the Programme for International Student Assessment, PISA, which is an international assessment that’s also adopted by Statistics Canada, Ontario mathematics scores fell below the national and international average in the last 15 years. In 2003, Ontario’s score in PISA was 530 and ranked number 10. In 2015, in the report released in December 2018, Ontario’s score was 509. We fell from 530 to 509. In the rankings in 2003, it was 10th; now it’s 17th. More important than this, the class cap in 2003 was 24; now it’s 22.
In addition, some of the high-scoring national and international jurisdictions reveal some important data: Number-one ranked Singapore—class size, 33; Hong Kong—class size, 27; number three, Quebec—32; Macau, China—27.7; Japan, ranked number six—28.6; Korea, ranked number eight—28.6; British Columbia, which is our west coast—30; Alberta, number 14—no cap, but targeted at 27; Ontario—22, but we ranked 17th.
The Organisation for Economic Co-operation and Development, OECD, also commissioned a report on education in member and non-member states alike that showed that although a heavy emphasis is placed on smaller classroom sizes, it does not itself determine higher scores.
I’d like to read a passage found in the Education Indicators in Focus report: “Reducing class size is not, on its own, a sufficient policy lever to improve the performance of education systems, and is a less efficient measure than increasing the quality of teaching.” In fact, many jurisdictions experienced a decline in student performance as they decreased class sizes. Ontario is one of the examples. So the rhetoric we have been hearing from the opposition just goes to show that they haven’t considered the facts, numbers and data when they make such bold assertions.
Let’s talk about the teacher-student ratio. Our government is protecting what matters most by delivering an education system that puts student achievement at the centre of everything we do. Sometimes we argue that class sizes are already too large; however, again, let’s look at some data. Within the 72 publicly funded school boards in this province, there are more than 628,000 students enrolled in secondary schools and around 39,000 teachers. This ratio works out to be approximately a 1-to-16 teacher-to-student ratio. The fact of the matter is that our classes are not large and are actually much smaller compared to other provinces in this country and in other jurisdictions globally. We also understand that some teachers may feel worried that our recent announcement may lead to their involuntary dismissal. However, the modernization of our education sector is being achieved in a way which will not result in teachers losing their jobs.
Lately I had a conversation with a surplused teacher. The teacher told me that the reason why the teacher was surplused was because of resignations, requests of leave, enrolment of students and also collective agreements—nothing to do with the reformation of education, nor the budget.
We are investing a landmark $1.6 billion in teacher job protection. This funding will make sure not a single teacher will lose their job as a result of the newly proposed changes to class sizes or e-learning.
Through the budget, we recently announced that we are investing more in education in 2019 and 2020 than the previous government committed for 2018 and 2019. We are building on our plan, Education That Works For You, and introducing new measures that will help make sure Ontario students are leaders in education once again. We are pleased to say that we are continuing to invest in school repair and maintenance. We are increasing funding for special education and Indigenous and French-language funding. Unlike the previous government, we believe success and appropriateness of programs are determined by outcomes.
Speaker, we were elected on a mandate of bringing change and redirecting the path that the province was previously going down. Ontario used to be the economic driving force of this country, but after years of mismanagement, we treaded further from this historical reality. Now we can reverse this trend. The 2019 budget is a step in the right direction, and the people of Ontario know this. Above all else, the 2019 budget will give us a place to stand, give us a place to grow and call this land Ontario.
The Acting Speaker (Mrs. Lisa Gretzky): Questions and comments?
Ms. Laura Mae Lindo: I’m quite honoured to stand and participate in this debate, especially while we’re talking about the impact of the change that’s coming with this budget bill. In order for me to speak to this, I’m just going to outline three things that happened to me during our constituency week.
First, I had an opportunity to spend some time with my colleague from Waterloo, MPP Catherine Fife, at an event called Leading Women, Leading Girls. It was really fascinating to be there, because the funding for that program had been cut in this budget. She still continued with the program, and I had an opportunity to watch mothers who had nominated their daughters. I watched Indigenous women leaders in the Waterloo region who were receiving awards and being recognized for the work that they did in the community, but this budget will not allow that to continue. We will keep working to find ways to recognize these women.
But it did remind me that in my time exploring the budget, I also noticed that pay equity was being lost in this budget. Now women thinking about entering into the job market have to do so knowing that they will not be making as much as the men who are doing the same work. The only way that we can make the change to make up for—the government enjoys talking about the last 15 years under the Liberals; the only way to make up for that is to legislate that change. We can’t rely on people to just change their mind, because that didn’t work with the Liberals. It certainly won’t work with them. That was one of the things that was fascinating about the change.
The other thing that I’d love to speak about is strategies for Black youth in particular. I was at a special education voices conference, and Black youth were asking for a job strategy. So my question to the government is whether or not these changes will be found somewhere in the next rendition of this budget.
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