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Wynne's Balanced Budget Promise Requires Action

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THUNDER BAY, ON  -----  February 18, 2013  ----    Dalton McGuinty pulled the plug on a dysfunctional government last October. For a government that adds $53.5 Candice Malcolmmillion each day to the provincial debt and is leaving Ontario taxpayers with an incomprehensible $255 billion debt, dysfunctional is putting it nicely.

Putting Ontario’s fiscal house in order needs to be the top priority for every MPP at Queen’s Park. And with an election on the horizon, it particularly needs to be high on the list for newly minted Premier Kathleen Wynne.

It would be fair to question her resolve to rein in the reckless spending of her predecessor, as she was a big part of that government. Considering her new government has not been given the democratic approval of the people, she has some work to do to establish her competency for this enormous task.

However, there is a glimmer of hope for the fiscally prudent in Ontario under Premier Wynne. While she was a Liberal leadership candidate, Kathleen Wynne responded to a Canadian Taxpayers Federation (CTF) leadership survey on a handful of burning Ontario issues. While most of her answers were predictably optimistic about the ability of her government to fix all of Ontario’s problems, she did provide some hope with her response to managing the province’s belligerent finances.

Wynne has committed to eliminating the deficit by 2017-18. Her goal, in her own words is to “get the province where it needs to be: deficit free, paying down debt, and ensuring Ontario is a prime environment for investment.”

Sounds good. But what is her plan? Economist Don Drummond gave 362 recommendations and warned that if drastic steps and structural changes were not made, the deficit would inflate to nearly $30 billion by 2017-18.

Wynne has yet to say exactly how she will eliminate the deficit, she did however commit to capping overall spending increases to 1 per cent below GDP growth until Ontario’s debt-to-GDP ratio returns to pre-recession levels. The level of debt she is aiming for is 27 per cent, still unsustainable high, but much better than the current 37.7 per cent.

Can she do it?

Unquestionably, she faces some major challenges, from negotiating with unruly teachers, to overseeing the Metrolinx expansion and repairing the province’s inadequate transportation infrastructure.

Moreover, beyond simply getting to the bottom of the gas plant scandal, Ontario’s renewable energy policy needs an overhaul. The province subsidizes the over-production of power, which it then sells at a massive loss. To compensate for the skyrocketing hydro prices, the government then subsidizes energy consumption in Ontario through the $1.1 billion-per-year Clean Energy Benefit. This is not sustainable, not good policy, and quite frankly, not affordable for a government this far in the red.

Despite her commitments to the CTF to balance the budget by 2017-18, her first move as premier isn’t going to move us any closer. Her cabinet was inflated to 27 ministers – a full 52 per cent of the Liberal caucus. She told reporters this cabinet-creep is in response to the big job at hand, but it signals that she’s coming to Queen’s Park with a big government mentality.

If Premier Wynne is serious about balancing the budget, and we hope she is, there’s no lack of places she can start cutting. She missed an opportunity with her cabinet, but it’s just the tip of the iceberg in this province.

Candice Malcolm, Ontario Director

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