Drummond report to cut deeper and last longer than Harris reforms of 1990s

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Just six weeks before the expected announcement of the Ontario provincial budget, the government has finally released the long-awaited report of the Commission on the Reform of Ontario's Public Services. Chaired by ex-banker Don Drummond, the Commission's mandate was to look at provincial public service delivery and determine "which areas could be delivered more efficiently by another entity."

The report contains 362 recommendations, over 100 of which focus on health care.

Speaking to reporters in a budget-style pre-release lock-up, Drummond acknowledged that his recommendations hearken back to cuts under former premier Mike Harris from 1995-2002.

"It is deeper now and the direction is longer and the period is longer than what we saw under Mike Harris," said Drummond, referring to his recommended across-the-board cuts to government programs.

According to Drummond, eliminating the deficit by 2018 will require cutting program spending in real terms by 16.2 per cent over the next seven years. The Conservative government of Mike Harris cut program spending by 4.7 per cent in the first four years, but was forced to raise spending in the second term for a total increase of 5.6 per cent over the 8-year period.

Drummond's report has drawn fire for recommending increased privatization, including of health care and education services, despite the Commission's mandate explicitly forbidding it.

Michael Hurley, President of the Ontario Council of Hospital Unions, says that bringing more profit motive into health-care services will be bad for quality and for costs. Speaking of the recent scandal involving Ontario's Air Ambulance service ORNGE, Hurley notes, "They gamed the system for millions of dollars of public funds. It appears as though the Liberals are willfully blind to the lessons from the ORNGE fiasco."

The report is based on assumed GDP growth of only 2 per cent annually from 2014-18 --lower than the Ministry of Finance projections -- and the goal of eliminating Ontario's deficit by 2018.

The Commission was prohibited from considering revenues, but a recent report from the Canadian Centre for Policy Alternatives has shown that Ontario's deficit is largely equal to the cuts to capital, corporate and income taxes under the Liberal and Conservative governments of the last 15 years.

In the last year for which calculations were available, Ontario had forgone $15 billion in revenues due to these tax cuts.

Under pressure from the New Democratic Party, Finance Minister Dwight Duncan said yesterday that he is considering delaying further corporate tax cuts.

The Commission recommends holding health-care spending to 2.5 per cent, education to 1 per cent, social programs to 0.5 per cent and all other programs to be cut by 2.4 per cent.

In health care, Drummond calls for changing hospital funding to an "activity-based financing" model, which puts a price on every procedure a hospital does. According to the report, this would force hospitals to stop providing services they can no longer provide "profitably."

A related recommendation calls for allowing more for-profit private sector companies to provide health services, while keeping payment under OHIP.

"This report is a blueprint for hospital privatization and cuts to needed care," says Natalie Mehra of the Ontario Healthcare Coalition, despite a clear prohibition to consider privatization of health or education in the Commission's mandate.

"The provincial government must look at other options or there will be considerable hardship and suffering for seniors in particular," says Mehra.

The report also recommends moving more patients out of hospitals and into care in the community. But a recent report by the Ontario Health Coalition questions where these patients will go unless home care and long-term care are significantly expanded.

Citing figures published by Ontario's Auditor General, the Health Coalition report notes that there are already 10,000 Ontarians waiting for home care, and another 24,000 waiting for beds in Long-Term Care homes.

The Health Coalition joined both opposition parties in criticizing what they say is the undemocratic nature of the Commission's process. The Commission did not hold any public consultations.

In a departure from past years, there will be no public budget hearings this year. Instead, Finance Minister Dwight Duncan is holding a series of telephone town-halls.

In a parallel to Toronto Mayor Rob Ford's recently ratified Collective Agreement with outside workers, Drummond seeks to open the door to contracting out public services by limiting job security provisions for unionized public sector workers.

Successor rights -- meaning a unionized Collective Agreement still applies if workers' jobs are outsourced -- should "not stop privatizations or amalgamations," says the report. "Inherited agreements do not live forever," it states, suggesting that privatization could be used to lower labour costs by evading Collective Agreements.

In education, the report calls for competitive bidding for elementary and secondary school bus services. Students could also face user fees for bus service, and for retaking a failed class.

Drummond also calls for laying-off nearly 10,000 education support workers.

The report says social program spending should be held to 0.5 per cent, a cut in real terms of almost 2 per cent. While Drummond noted that his recommendations do not call for cuts to welfare, poverty advocates note that welfare rates today are still 55 per cent below their pre-Harris levels.

Jonah Gindin is a freelance researcher and organizer.

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