Where’s the responsible plan to balance the books?

By MPP Toby Barrett

This year’s Fall Economic Statement claims the Wynne government will balance the books by 2017-2018. It seems rosy until you expose the details of how the government plans to achieve this. What appears to be the case is they will use $1 billion in reserves, the sell-off money from Hydro One, and $2 billion accrued from the cap and trade tax.

The responsible way to reduce deficits is to find savings and efficiencies. Would you sell the tires off your car in order to pay your vehicle insurance? Or as the Toronto Sun explains, this is akin to selling the furniture to pay the mortgage, which stops working when you run out of furniture.

The government claims the Hydro One windfall will go to stimulus spending on subways and other infrastructure – but the Official Opposition has exposed the truth. And the proof is in the eating because on page 101 of their own document, an extra $1.09 billion in revenue is listed from the sale of Hydro One.

Therefore, it is impossible for the Government to both spend the Hydro One proceeds on infrastructure and, at the same time, use that same money to balance the budget. In essence, the Government has to break one of its two promises, more stimulus spending or balancing the books – or go on to raise more taxes and cut more services.

As well, Financial Accountability Officer Stephen LeClair has projected a $3.5-billion deficit in fiscal year 2017-2018 — in spite of what we’ve been hearing in the Fall Economic Statement.

What are those in power presently doing? They are running up the debt. They continue to run up deficits. They’re public about it—very public; both federally and provincially, we’re going to see another three years of deficits as they spend money they don’t have.

You can’t spend your way to prosperity. We saw it five years ago when this government’s stimulus funding failed miserably. It didn’t work back in the day of Bob Rae either because, as with five years ago, there was no lasting effect on Ontario’s unemployment rate. What happens is government continues to spend its way into a hole with no plan to stop spending!

The Wynne government doesn’t understand fiscal restraint — personal income tax revenue in Ontario has dropped and corporate tax revenue has dropped considerably. Growth in Ontario’s economy has slowed markedly since the robust expansion of the Mike Harris era.

Ontario now has a $300-billion debt. It’s sitting at 40 per cent of our gross domestic product. Interest on that debt is something like $10 billion a year. If we had a Ministry of Interest, it would be the third largest ministry after spending on two of our top priorities — health and education.

This present government never had a revenue problem; it had a spending problem. Now it has both a spending and a revenue problem with no plan for a responsible balancing of the books.

In her newly-released Auditor General report, Bonnie Lysyk reiterates there is no plan by this government to pay off current or future debt.

A large debt means debt-servicing costs that hurt other programs, vulnerability to interest rate increases, potential credit rating downgrades – all of which could make it more expensive for Ontario to borrow.