By MPP Toby Barrett
It was disconcerting this year to watch the charade of a budget unfold, when the Ontario government claims they have balanced the budget, but clearly haven’t.
Government provided a set of numbers that only add up by using one-time revenue, such as the sale of Hydro One. Because of that, it’s clear we are running a structural deficit. Ontario remains the largest subnational debtor on the planet, and there is no plan presented to tackle our growing debt.
The question looms, will the Ontario Government put a plan in place to tackle its debt?
Ontario’s Auditor General devoted considerable space in her 2014 and 2015 Annual Reports to address Ontario’s growing debt burden. This debt has significant implications for day-to-day life. Specifically, Auditor Bonnie Lysyk wrote, “The negative impacts of a large debt burden include debt-servicing costs that divert funding from other programs.”
You will hear the government say the funds from the sale of Hydro One and from cap-and-trade will go into the Trillium Trust and be used for infrastructure. On the surface, they’re correct. But they slipped one sentence into recent bills to give themselves an out: “To reimburse the Crown for the expenditures incurred to fund costs relating to infrastructure.”
According to the Ottawa Citizen, April 22 2015, “… putting some billions of new money into the province’s transit trust will enable the government to quietly shift existing money to help it reduce the deficit or pay for other spending”. This allows the government to put the sale money into infrastructure, and take the money already budgeted for that infrastructure and apply it against the deficit.
It worked so well for the sale of Hydro One, the government did it again with the revenue from cap-and-trade.
Again, they put the revenue into infrastructure, and take out the money already budgeted for that infrastructure and apply it against the deficit. There you have it – an easy way to tell the people one thing, when the real intent is completely different.
In this budget, they have “overachieved” as the Finance Minister so frequently tells us. He fails to mention the significant amount of the revenue bump is from one-time sources. It starts with a $1.5 billion increase in federal infrastructure revenue. This is traditionally a $100 million fund, but the feds are investing in infrastructure, so this is a temporary bump. The Land Transfer Tax is also up a further $400 million this year (it was up $600 million last year). One-time asset sales are up $1 billion. New this year, we see $1.8 billion in cap-and-trade tax added straight to revenue. And finally, $500 million is booked from the Teachers’ Pension Plan, even though the Auditor General said this is not appropriate.
So while government has announced that they have ‘balanced’ the budget, this is far from reality.
The 2017 budget means Ontario families will continue to pay more and get less. It means another year of weak and mediocre fiscal and economic policies based on incompetent assumptions – policies that will do little to boost consumer confidence or spark business investment.
The bottom line is life and doing business has become tougher and more expensive compared to neighbouring jurisdictions in Canada and the US. Regrettably, this budget plan for the coming year is not up to the job.