By MPP Toby Barrett
Debate about Ontario’s economy, and specifically the fiscal health of its government, have dominated the past few weeks at Queen’s Park. It looks like we’re in trouble on both counts.
As I did in the spring, I voted against this year’s budget – a budget I continue to find both unrealistic and unaffordable.
Every party has said they are committed to balancing the budget. However, people are cynical, and part of that cynicism is driven by the fact many politicians aren’t prepared to stand by their commitments.
Presently government is living beyond its means – to a tune of $12.5 billion this year alone. Rather than taking time and presenting a budget with solutions, it has reissued promises without a plan to pay for them. This government promised to balance the books by 2017-18. . But in three years, rather than a deficit of zero, it is projected we’ll see a deficit of $30.2 billion.
This year’s budget is political, not practical. The government originally presented it in May for the purpose of forcing the NDP to either support a budget that could have been written by former NDP Premier Bob Rae, or create a rift within the NDP by voting against it.
Following the election, the government could have taken the time to craft a budget that addressed the needs of Ontario families and businesses. Instead of thoughtful policy, we are seeing higher taxes, cuts to front-line services and more job losses.
Norman Levine, the managing director of Portfolio Management, feels this budget makes debt and unemployment worse. He warned, “What’s going to happen is once the budget comes out, rating agencies are going to downgrade them, and there will be more than one downgrade because they’re showing no plans to address it, so they’re going to be downgraded multiple times.”
During Question Period, Opposition Leader Jim Wilson asked about future downgrades on the debt credit rating and skyrocketing costs to service that debt. The Premier was quite selective in choosing to answer only that the Dominion Bond Rating Service had reaffirmed Ontario’s rating. But if you read their press release, it’s quite negative. “DBRS acknowledges that the medium-term outlook has somewhat weakened since last year, owing to a combination of slightly lower revenues and higher program spending projections, raising doubts that the government will have the fortitude to make difficult decisions required to adhere to its original targets.”
A credit downgrade has tangible consequences, since a 1 per cent increase in the interest Ontario pays on its debt will cost as much as $3 billion more annually—$3 billion we will be borrowing. All Ontarians will pay the price for higher borrowing costs that will take billions in new taxes out of our wallets.
The Premier, her Finance Minister and her Treasury Board President keep telling us to trust them. Somehow they will find a way to balance the budget within three years even though they’re spending more money. Somehow they will introduce new programs and operational spending while paying billions more in debt interest. Somehow the additional billions in debt servicing costs won’t have an impact on front-line services.
I understand why some media have dubbed this budget a “fiscal fairy tale.”
By MPP Toby Barrett