By MPP Toby Barrett
“My name is Dalton McGuinty and I have a spending problem”
– MPP Sylvia Jones
The news that Moody’s Investor Services could downgrade Ontario’s credit rating unless it takes serious steps to deal with the mounting deficit is a wake-up call for Ontario’s reeling economy.
While Ontario’s Opposition has been counselling Premier McGuinty to get his finances in order for years, the harbinger of doom that accompanies a credit downgrade means Ontario requires definitive financial action now to ensure we don’t fall into the crumbling financial situation of many European countries. But is Mr. McGuinty ready to accept the financial therapy required?
The warning from Moody’s follows downgraded ratings from credit services DBRS, as well as S&P. Lower credit ratings often mean the cost of borrowing goes up – further crippling economic activity.
None of this should come as a surprise: Ontario’s unemployment rate has been above the national average for five years, our debt-to-GDP ratio has been the worst in the country four years running, and we are running a higher deficit than all other provinces combined. As Opposition leader Tim Hudak noted, “Mr. McGuinty’s reckless spending has put us on the road to becoming the Greece of Canada.”
Months before the broadside from Moody’s, we in Opposition were pushing for a mandatory immediate public sector wage freeze as a first step. With labour costs alone accounting for over half of Ontario’s budget – and at a time when over half a million Ontarians are jobless – it’s only fair to ask public sector workers to forgo getting another raise. Mr. McGuinty’s voluntary wage freeze hasn’t been effective.
To date, the Premier has been repeatedly counselled to take immediate steps to start cleaning up this mess. But, calls have fallen on deaf ears – the credit rating news, coupled with the new minority government situation, and ongoing job loss may persuade this government to be in a more listening mood in the New Year.
Opposition will continue pushing for a fix to the province’s apprenticeship program. For instance, regulations require five journeyman carpenters for every apprentice. In many other provinces, that ratio is as low as 1:1 or 2:1. That’s why I joined Tim Hudak and Opposition members across the province in holding media events demanding government modernize the apprenticeship system, revise the apprenticeship ration down to 1:1 and unlock 200,000 skilled trade jobs.
Ontario’s has a jobs, a spending and a debt crisis: Remedies include:
* a top-to-bottom review of all spending areas for efficiencies and effectiveness.
* Immediate two per cent cuts to all Ministry budgets excluding health and education, and the elimination of all stimulus-type spending for a total annual savings of $5.5 billion
* an assessment of every government agency, board and commission, and the termination of those that no longer serve a useful purpose
* a full examination of what services government should, and should not provide, and what better delivery mechanisms are available
* fixing a broken public sector salary arbitration system, and
* a package of job creation measures, including lowered businesses taxes and a rollback of needless regulation
We have a long way to go and a short time to get there….2012 will be difficult.
When the Premier of Ontario has a spending problem financial therapy – and rehab – is in order.