Grim fiscal future for Ontario
(June 1, 2016) Recently, Ontario's Financial Accountability Officer (FAO) Stephen LeClair confirmed what we've been saying for months: the government has no long-term credible plan to pay down the province's debt and eliminate the deficit.
The FAO has forecast a budget deficit of $580-million in 2017-2018, which is somewhat larger than the 2016 Ontario budget projections. However, LeClair suggests the Liberals will reach a balanced budget next year by tapping into reserves and contingency funds, or by selling assets.
Still, in the years that follow, LeClair says expect to see deficits, including a $1.7-billion deficit in 2020-2021.
In addition to deficits, the FAO states the net debt will increase by $54-billion over the next four years – bringing the net debt over the $350-billion mark.
The deficits the FAO warns of are likely to occur because of increased spending pressures – such as inflation and population growth – that can't be ignored. This is most apparent in the health care sector as spending pressures would require a 5.2 percent growth in annual spending to maintain adequate service levels. However, the current budget only predicts a 1.8 percent growth in annual spending.
So what does that mean?
Well, more cuts to services that we all value.
Because of their fiscal mismanagement and poor decision making, the Liberals keep putting the province further and further into the hole.
Until Ontario's poor financial state is properly addressed, the government will continue to sell off assets, slash funding to health care, and raise hydro rates to make up for their scandal, waste and bungling.
This is sad news for many areas around Ontario, where provincial investment is badly needed.
In Simcoe-Grey, it means the government will probably keep dragging its heels on approving the redevelopment of Stevenson Memorial Hospital in Alliston. The same delays will likely apply to Collingwood General and Marine Hospital, which also wants the thumbs up from the Liberal government to start its redevelopment project.
On top of all this, the FAO is warning about the possibility of less than projected growth.
If the budget is over-projecting the economy again, the implications could be a $1.4-billion deficit in 2017-2018, and by 2020-2021 a $3.5-billion deficit.
LeClair notes the province's fiscal plan should balance risk, but said most of Ontario's risk is, "tilted to the downside."
Still, Finance Minister Charles Sousa maintains the province is on the right track. This of course is delusional thinking. If the government was honest with Ontarians, it would be a far different story.
Premier Kathleen Wynne and her ministers have consistently displayed their inability to govern. They make bad choices. Their short-sighted fiscal plan is a prime example.
Other examples include the e-health scandal, the ORNGE air ambulance boondoggle, the gas plants affair, the flawed Green Energy Act, the job-killing Ontario Retirement Pension Plan, healthcare cutbacks, cuts to education, and flawed infrastructure initiatives.
You name it and the Liberals have found a way to create problems.
The Ontario PC Party has demanded better from the Liberals and we'll continue to call upon them to provide the leadership our province needs. The people of Ontario deserve far better from this government.
Jim Wilson is the Progressive Conservative MPP for Simcoe-Grey.