Ontario spending twice what it can afford

At this critical point in Ontario’s history, I am astonished at how quickly the concept of financial responsibility has evaporated from our political landscape. The Ontario government seems to have completely forgotten the painful lessons of the past.

In the panicky, politicized rush to find quick-fix solutions, Mr. McGuinty has plunged us deeper into debt, without a thought to the risks this poses for Ontario’s future. Mr. McGuinty has secured his place in the record books, by creating the largest deficit in Ontario’s history -- $18 billion, over two years – with another seven years of deficits projected.

Experts like Warren Buffet are warning that when the crisis in the United States passes, the world could experience a return to the high inflation of the early ‘80s. The resulting high interest rates would mean skyrocketing borrowing costs, sending our weakened and indebted province still deeper into the financial hole. Even worse, Ontario’s public services, especially health care, are only beginning to grapple with the surging demand and increased costs stemming from the retiring baby-boom generation. If people think the pressure to spend more on public services is enormous today, just wait a few years.

Ontario Finance Minister Duncan has announced that he will run a massive $18 billion deficit, this past year and next, in order to “stimulate” the provincial economy.

In isolation, this may not seem out of sync with many other jurisdictions. But when put into context, the McGuinty plan, or lack thereof, will devastate Ontario families.

Consider, for instance, that since the present government was first elected in 2003, program spending has increased by 50 per cent. Recent public sector wage settlements are running at roughly twice the rate of inflation. Total program expenditures have increased by an average of eight per cent each year, but the Ontario economy has grown annually by only four per cent.

In other words, this government is spending twice as much as it can afford – hence the deficits. However, I’m hard-pressed to find an Ontario family or business – certainly not here in Haldimand-Norfolk -- that is feeling twice as well-served.

Since 2005, more than 300,000 manufacturing jobs have been lost. In that same time frame, the McGuinty government has presided over the hiring of 200,000 public sector employees. Ontario now routinely trails the other provinces in economic growth. The provincial unemployment rate is the highest it has been in 12 years. And now, as of April 1st, for the first time in our history, Ontario has become a “have not” province.

To unlock our economic potential, we need to cut taxes, cut red tape and make government more productive, responsive and efficient. My colleagues and I have put forward ideas for the government to consider in delivering real economic results -- including the local idea of a tax holiday to help families purchase a new vehicle.

With huge increases in public spending and the hiring of tens of thousands of new public employees, the government has ignored productivity improvement. It’s time to set productivity targets for government to ensure maximum efficiency and value-for-money and quality services for those who need them.

While families and small businesses here and across Ontario are taking a hard look at their own priorities during difficult times, government needs to do the same.