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Ontario deficit rises to $24.7 billion
October 22, 2009 - 4:26pm
http://www.theglobeandmail.com/news/politics/ontario-falls-deep-into-the-red/article1334227/
Mr. Duncan told Ontarians last March to brace themselves for a record deficit of $14.1-billion for the fiscal year ending March 31, 2010. In June, he said the ballooning cost of rescuing the ailing auto sector would push the tally to $18.5-billion. Ontario's $3.5-billion commitment to the bailout of General Motors Corp. largely accounted for Mr. Duncan's first fiscal surprise. He is now projecting a deficit of $24.7-billion for this fiscal year, a much gloomier outlook that is based on the fact that previous forecasts for how much revenues would flow into government coffers and how much it would spend on provincial programs were too optimistic. Well then, that blows Bob Rae's record away even in relative terms.
taking a little break here from chopping echinacea roots, my dad came down during the news commercial break to say that Hudak is an embarrassment. Apparently the new Ontario Con leader was ranting about the Ontario deficit, instead of being thankful that money was put into infrastructure, and public services. my dad said, 'the whole world is in recession, and the government needs to spend to help pull it out,. to get things rolling.' it was interesting to hear him say that- i generally thought he was pretty conservative.
especially since the public services are needed by so many people who are suffering at this time. how else are they going to have support to enter into the economy in a viable way? the last thing the economy needs is naysayers to deficit in times when its needed. wondering if people have useful comparable numbers, like what the Ontario GDP is. in any case the absolute last thing needed is cuts to public services. they ran the same line to kill services the last decade, so they could follow up by privatizing. Ontarians should know better by now.
Before the ReformaTories won the last election by phony minority, Steve Harper said the economy was fine. No need to worry.
They're all Bob Rae Keynesians today in a half-hearted way. They're doing a lousy job of it though. Our two old line parties were converted to neoliberal idealism for many years before the meltdown, and they're still on the same track. Liberals and Tories know all about throwing the country into a debt hole but not a lot about mixed market economy or how to get the country rolling again if it doesnt involve taxpayer handouts to the fossil fuel industry, US-based car companies, the banks etc.
Wasn't it just 3 1/2 years ago that Dwight Duncan took credit for saving Ontario?
http://www.youtube.com/watch?v=z-dFUbM-Mcg
Is the deficit 24Bs because the Ont Libs have tried to stimulate the economy and boost public services... or is it that big a number because the Libs are incompetent managers? Having the Finance Minister "find" another surprise 12 billion since June makes me believe he was lying earlier or he and his department are incompetent.
Other than tossing some money at GM and buying a chunk of the company, what other big expenditures have happened? Second Career is a decent program but it isn't costing billions. I wasn't aware that the Ontario gov was spending to fight the recession... not on the level of the feds.
Isn't the debt a by-product of industrial\business slowdown and reduced tax revenue?
I suspect taxes will be raised in one form or another, as hidden taxes, and services will be trimmed. The Libs will be able to justify both by pointing to the 24 big ones. Job #1 balance the spring budget or trim enough to make it seem like they're trying.
On a side note. I heard CBC radio's provincial affairs reporter, Mike Crawley, while driving yesterday afternoon. A weird report. He said the deficit would give the NDP and PCs a good chance to attack the Libs... an odd statement, considering I'd like to hear about how the NDP and PCs and Libs are going to manage the debt as our elected reps, not teams trying to score points on one another. Then Crawley mentioned specifically "Rae Days", as a way to trim gov costs. That caught me off guard. I have to think the phrase, and the idea, must have been tossed at Duncan in a scrum or it's being rumoured and Crawley wrote it into his report.
it doesn't seem like anyone has clear numbers these days.
are these billions pushed-up front-loaded accounting jobs?
who knows.
anyway, came back here to say that no one has told me what Ontario's annual contribution to the GDP has been recently. isn't that supposed to be more important- the ratio- than the isolated numbers?
and even if the ratio is horrendous, there is still the q about the method of accounting. i don't think they stretch costs out over the lifetime of a project anymore. so they throw us the whole shebang in a once-off to scare everyone, and then cut services in the ensuing panic. same old.
As we almost certainly head back to austerity again, here's what one of the architects of the Social Contract has to say.
What advice do I have for Premier McGuinty?
I'll suggest right off that this isn't nearly strategic enough. It's dumb to just slash a percentage off everything and/or give everyone unpaid days off without any evaluation of which spending is most useful. There's a real problem in Ontario with overspending on external consultants and if you've ever seen an organizational chart of most ministries, it's immediately obvious that they have more management layers than necessary. Bringing Catholic schools into the secular fold would also be a big, if controversial, money-saver.
Thanks for the article. An interesting read.
He's obviously self-interested in defending his past actions, and that of the NDP gov at the time, but from where I'm sitting this downturn in the economy feels worse than the early 90's, while Dector is saying this has been "small" in comparison. Maybe it's more regional, or that the closing of many small manufacturing plants, which employed many people in smaller town Ontario, has been having more of a broader economic affect than the 90s?
And he keeps bringing up nurses and comparing them to teachers. A top tier teacher in the Thames Valley Board will make over a hundred grand in 2011. I would suggest making teachers work more, especially at the high school level. That would keep teens who're having trouble finding work in a constructive school environment - learning. Teachers do not need more days off in a school year that's already short of teaching days.
But municipalities are in bad shape, too, because of the downloading legacy. I believe there are restrictions on how they can manage debt. So the only solution to a decrease in tax revenue for a city like London is to tax more, spend less, or lean public workers. London transit is, I believe, about to go on strike. Round one.
Hey, when was the last time a cut to the Ontario Ministry of Ag was announced? Consultants.... BA, I'll toss that to you, if you're reading along.
That video was always gag-worthy (not to mention historically inaccurage, as it suggested that Duncan had been Finance Minister since Day One, instead of being a temporary fill-in while Sorbara chased the police away from his door step). But, now, it's even sadder / funnier. Maybe they should add an epilogue, where Duncan goes back to wearing the worn-out shoes and having five o'clock shadow and the wheelbarrow and its contents are completely obliterated by an even bigger cinder block.
It's nice to see it getting some more hits now, since I went to all the trouble of preserving it for posterity
Decter is right. "Rae Days" were a much more humane approach than the Common Sense Revolution.
Rae Day vs Harris Handshake
Thomas Walkom takes a shot at the Rae Day Myth. Pretty Good Article. Let the controversy continue. http://www.thestar.com/news/ontario/article/723962--walkom-rae-day-zombie-rises-from-grave Myth I: They were an alternative to job cuts Myth II: Rae Days and other restraint measures were necessary to prevent Ontario from hitting the debt wall - a point at which no one would be willing to lend the government moneyMyth III: Rae Days were an effective way to save money
Myth IV: McGuinty can impose his own Dalton Days
Myth V: There's no alternative
He may have good points. I just want the Ontario Liberals Gone. Too many, too out of touch and out for lunch.
He had me right to the end when he suggests the public sector is somehow above losing a little money like all the unfortunate who have lost their fucking jobs.... the same three-quaters of Ontario who does not work for the public sector.
St Thomas Ontario has probably lost more than 11 thousand jobs - like the oh so grim days for the public sector in the Rae 90s. And that's one town in a depressed region, in a small corner of the province.
Whoops, sorry. Toronto Star. Whoever is in power probably doesn't matter out here.
What you are describing, fp, is how the pain is being spread inequitably.
Do we ever need to speak to the fact that Alberta's (and probably Ottawa's) idea is that the Canadian dollar is rising according to broad economic principles, and not just speculation, so let the "good times" - a loonie equal to the greenback - roll. The true unemployment rate in Ontario is more in the order of 12 to 15 per cent. We are looking at structural job losses, lasting many years, guaranteed by the maintenance of a dollar that makes our exports unsaleable . Some University of Calgary economic and political thinkers are talking about a common currency - viva Argentina.
So, yes, the public sector has to bite the bullet and resist asking for raises. The Hudac folks are cut from the very same cloth as the Harrisites, and they cannot wait to decimate the ranks of employees of "the state" that will be made possible by the demonization of those with public service benefits. And lets keep the sights on national issues alongside provincial, the "Ottawa impediment", as it were, to regaining a healthy industrial economy in Ontario. Ah, if only we had oil and natural gas to export... :D
It's off topic, GV, but my contacts in the oil patch do not like a high loonie. No one in business I know wants a parity dollar - unless they are importers or purchasing large pieces of infrastructure gear\machinery.
Back on topic... Imagine what will happen to all these beaten down municipalities once the bills come due, and their tax income disappears. Will the public sector workers still have jobs when there's not enough money to pay them? I suspect it's going to get grim for public sector workers, and the beneficiary will be Hudak\PCs, who'll spin a line that many will agree with: chop, chop, chop.
For example - LTC bus drivers almost unanimously turned down a pretty decent three year package recently. As much as I appreciate the underfunded LTC (which gets a provincial boost to its budget via a gas tax bonus; wonder if that will continue in 2010?) and its workers, it is really hard for me to walk through lines of people, resumes in hand, desperate for jobs at job fairs, and then listen to London public service workers suggesting an eight percent wage increase over three years is somehow a bad deal.
Oh, and London is having a municipal election this winter, too. Watch for fireworks.
The exported barrel of oil brings more revenue with exchange rates at parity, and ideologues of market see it as holy writ to leave things alone...they go into debt only to stay in power, and when power is absolute, we are indeed in deep dung.
The Record emasculated a letter I sent to them the other day, but they printed paragraph one and the last sentence of paragraph three:
"The Editor:
An electric train trundling down main street between two shopping malls cannot be considered a serious answer to either reducing the region's carbon footprint or assisting the emerging recessionary workforce that is going to need public assistance in getting to those new, lower-wage jobs.
The "planning" process that arrived at the light rail idea before the near collapse of financial institutions and markets worldwide, itself trundles on seemingly unconcerned with the violent changes appearing in the local economies. And just how those two and three-car families can function while the approaching "end of oil" economy reduces the family fleet to one vehicle -or none - is not apparent.
The rail line will attract higher-density development along its length, according to carrot theory.Indeed, it would be a fine place to live in retirement villas and condominiums, with access to not one but two malls. But the working populations out in those still mushrooming suburbs, the folks who will be called on to pay a large portion of the (now predicted) $800-million cost of the light rail line, will find the King Street Railway only an added burden on their shrinking budget.
Forgetting about the pointless use of carrots as a planning device, and joining with Toronto planners to eradicate the bet noire of planning, the Ontario Municipal Board, would be a marvelous start to a believable plan of public transport that encompasses the realities of the newly emerging economy.
A fast electric rail transport connecting Waterloo and Kitchener to Cambridge and Metropolitan Toronto - after all, their spillover population is part of the problem - will be part of the future solutions for the region. But for some considerable time yet, buses will have to run through it."
They will be receiving a 600 word column that thoroughly explains the dilemma to the largely unread, thoroughly frustrated and frightened citizenry, free pof political editing.
GV,
Can I read that version?
Sure. It's in the mental mix-master at the moment,fp. I'll send it along.
That's what public sector unions helped elect in 1995. They exchanged Rae Days for $35 billion in public borrowing to finance tax cuts for rich friends of the conservative party. Ten thousand unionized nurses were given pink slips and more.
Thomas Walkom is a true old line party cheerleader. He says it was Rae's NDP who slashed over $4 billion from public spending. He nary mentions that it was Brian Mulroney's conservatives who peeled $4 billion from transfers to Ontario as the recession was well underway across Canada. They tend to insulate one another from the truth.
Now that the 'golden goose' is cooked, when will Ontario demand that Ottawa address the fiscal imbalance?
Same revenue, less profit. Oil is priced in US dollars while the oil companies' expenses are in Canadian dollars.
They've siphoned off most of the cheapest and accessible crude over the years. Alberta's Heritage Fund was cleaned out to pay down what were the highest per capita provincial debts in Canadian history. The mismanagement and thievery that's gone on in western Canada is breath-taking to say the least.
As I understand it, no federal money goes out without matching funds from the province.
LTJ, not sure about that. I suspect that, for example, the Southern Ontario Development Agency or SODA, with a budget of 400 million dollars is not matched by the province. Otherwise it would be labeled as an 800 million dollar program.
But I do think you're correct. Many projects are 60\40, fed-province. But the province can opt out.
From the federal 'actionplan' website:
Sounds very much to me as though their 400 million dollar budget not only includes provincial and municipal matches, but also recycled monies from pre-existing programs. Another con-job by the Harpercrits.