CCPA comparison of three Ontario election platforms

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Hugh Mackenzie of the CCPA has prepared a comprehensive comparison of the election platforms of the three major parties in Ontario's election. It reveals an enormous fiscal "hole" in the Conservative platform that will inevitably result in dramatic reductions in public spending if that party wins the October 6 election.

The report, released yesterday, added up the value of the campaign promises (for tax cuts and new spending programs) made by the three parties, and compared those to their corresponding plans to pay for those promises.

It found that the Conservative platform is by far the most aggressive of the three parties, featuring promises that would cost $4.4 billion per year by 2015-16. That's almost as much as the value of the promises in the Liberal and NDP platforms put together. Nearly 80 per cent of the cost of the Conservative platform goes to tax cuts.

Most dangerous, the Conservatives rely almost exclusively on spending cuts to pay for their promises, yet they have not explained where most of those cuts will come from. Mackenzie's calculations show that unspecified additional spending cuts worth $4.1 billion in 2015-16 (and a cumulative $10 billion over the next four years) will be required to make the Conservative plan "add up."

Mackenzie concludes, "There's a $10 billion hole in his budget that can only be filled by public service cuts that [Mr. Hudak] isn't prepared to tell you about right now."

The Liberal and NDP platforms are less expensive than the Conservatives' ($1.8 billion and $2.9 billion per year by 2015-16, respectively), contain a mixture of tax cuts and new spending, and are paid for by varying combinations of offsetting spending cuts, revenue measures (like the NDP's corporate tax proposal), and more optimistic economic assumptions.

Another interesting (and sobering) finding in the report: the fiscal platforms of all three parties are based around the same fiscal forecast that was contained in the 2011-12 Ontario budget. That forecast, in turn, is based on a rather austere outlook for base-case program spending -- growing by less than 2 per cent per year (and hence falling in real per capita terms). They all balance the budget in 2017-18 (which strikes me as a reasonable timetable). But they are all counting on significant restraint in spending to do it -- even before considering the impact of their incremental election promises. That means that whoever wins the election, Ontarians will have to be "on guard" against the temptation for the next government to squeeze spending hard. That risk, obviously, is enormously amplified if Hudak's Conservatives win next week, since their $10 billion in cuts is on top of the already-austere spending baseline that implies falling program delivery in its own right.

On the bright side, it seems that all the forecasts still have some "wiggle room" built into them, in the grand tradition of "strategic budgeting" pioneered by Paul Martin in the 1990s. Debt service costs are clearly overestimated; revenues may be underestimated; and various "prudence" cushions give a little more breathing room. However, the pressures of electoralism seem to be leading all the parties to downplay the importance, and the difficulty, of preserving the fiscal base for our existing public programs through the coming challenging years. Those who support public programs had better be polishing up their marching boots, no matter who wins next week.

This article was first posted on The Progressive Economics Forum.

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