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It's time to rein in spending and grow the private sector

(Queen's Park Report - May 8, 2012) It only took a couple of days for two of the world's major credit rating agencies to respond to the provincial budget and they did so with dire warnings.  
 
In less than 48 hours since the Liberal-NDP agreement to tax more and spend more, Standard and Poor's reduced Ontario's credit outlook from stable to negative. The very next day, Moody's Investors Service sent an even stronger message by downgrading Ontario's credit rating from Aa1 to Aa2.

Why is this so significant?
 
It means higher interest rates are on the horizon for Ontario's $280 billion debt.  That means more tax dollars going to foreign lenders and less to health care and education.  It's the outcome the PC Caucus feared most, but one that was predictable, which is why we could not support the budget.
 
Let's be honest, the only glue holding this boat together is low interest rates. Once they start to rise again - which now is only a matter of time, thanks to our credit downgrade - the whole thing starts taking on water.
 
The situation is serious.
 
We've literally reached a point in this province where there is no money left.  Interest payments are now our third largest expenditure next to health care and education.  That's over $10 billion a year wasted - money that would be better spent expanding Collingwood General and Marine Hospital and building a new Stevenson Memorial Hospital. Instead, we're sending that money to bondholders in New York and Shanghai because of years of unsustainable spending.
 
If interest rates rise by a single percentage point, it will add nearly $500 million to the interest we pay on our debt. That's equivalent to the cost of 12,000 elementary school teachers, 8,700 first year nurses or 250,000 MRI exams.
 
This is not the Ontario I grew up in. Our deficit is three times larger than the deficit of every other province combined.
 
Time and time again, we've told Mr. McGuinty that he is welcome to steal any one of our ideas to turn the economy around, but unfortunately he's more interested in forcing by-elections.
 
We can turn the tide by having the courage to do what is necessary.
 
A mandatory public sector wage freeze is needed and would save $2 billion a year. Barrack Obama and David Cameron are doing it, so too is British Columbia. You can't balance the budget if you ignore where over 50% of your spending goes.
 
A further $5.5 billion could be saved if the government would also introduce immediate annual two percent cuts to Ministry budgets, excluding health and education, and eliminate onetime spending such as stimulus programs.

More savings could be found with the introduction of alternative service delivery, which would require public sector unions to compete for government contracts, where appropriate, to ensure that taxpayers get the best value for their money.
 
An end to corporate welfare is another measure that should be reviewed. This idea of government picking winners and losers in the marketplace costs the treasury over $2.5 billion a year.  Not only is this unfair and costly, the results are questionable.
 
The Ontario PC Party wants to be a pro-growth, pro-jobs government that fosters innovation, rewards hard work and nurtures more of our own.
 
Instead, we have a government that rummages in the sofa cushions for small change, when what we need is big change - a plan that projects optimism for a better future.
 
It starts with a new approach: A government that gets the big things right, which is going to take a Premier who can act, leading a government that can execute. Whether it's Ornge, eHealth or the doubling of our debt, Mr. McGuinty has proven that he is not that leader.

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