Can we really expect the government to get the deficit under control?
McGuinty hints at cuts to public service
in drive to eliminate $16B deficit
by Emily Senger, iPolitics Staff With files from the Canadian Press
TORONTO – Ontario Premier Dalton McGuinty re-committed to balancing the budget by the 2017-18 fiscal year in a speech Tuesday, barely hinting at cuts to come as the province tries to get its $16-billion deficit under control.
In a speech to the Canadian Club, McGuinty didn’t give specifics, but hinted at slower spending after the Drummond Commission, lead by former bank economist Don Drummond, delivers its final report on reform of Ontario’s public service in the coming weeks.
Now that Ontario has weathered the worst of the global economic downturn, the province needs to focus its attention to the deficit in order to improve consumer and international confidence in the economy, the premier said.
“Now that the storm is over, it’s right to rededicate ourselves to our plan to eliminate that deficit,” McGuinty said.
While promising not to raise taxes and to protect health care and education — part of his 2011 re-election promises — McGuinty said there are “opportunities for reform” in the health-care sector, which currently makes up 40 per cent of provincial program spending.
Heath Minister Deb Matthews will introduce a plan for health-care transformation, he said.
Salary expenditures were another area where McGuinty said there could be savings.
While Progressive Conservative leader Tim Hudak suggested Monday that the government should consider privatizing services in order to cut costs, McGuinty promised to respect the collective bargaining process, but also “negotiate firmly.”
Speaking to reporters later, McGuinty took the prospect of a public-sector wage freeze off the table, something the PCs are pushing for.
“The wage freeze has been rejected by Don Drummond, it’s been rejected by the government in Ottawa, it’s been rejected by the government here in Toronto,” McGuinty said. “There is a determination here to ensure that you get expenditures under control, but to do that by bargaining fairly, but firmly, through the collective bargaining process. That’s what we intend to do.”
McGuinty, who rebuilt public services after deep cuts under former premier Mike Harris’ PC government, said that he hopes the respect he has built with the public service will aid his government in bargaining.
The premier also rejected the idea that the government will look for significant new revenue sources — a downtown Toronto casino and higher alcohol prices have both been suggested — rather than making cuts.
The speech, and McGuinty’s repeated assurance that “it’s not going to be easy,” but “we’re all in this together,” didn’t cut it for Toronto PC MPP Peter Shurman.
“These are the words of a man who, for the last eight-plus years, has held the shovel while digging Ontario into the biggest hole it’s ever been in and is now saying ‘we all have to work together to get out of it’ and, suddenly, has found religion where the deficit is concerned,” Shurman charged.
He also questioned whether the Liberals would be able to bring the deficit under control without significantly affecting services.
“I am very concerned about the prospect of having him at the helm when it comes to attacking a deficit and, certainly, in the way that he is talking about, which is really without any terrible inconvenience to anybody,” Shurman said.
On the question of public-sector wages, the PCs haven’t ruled out a wage freeze, even if the Liberals have.
“As far as we’re concerned, a wage freeze is not off the table, a wage freeze is essential when it comes to dealing with the public service,” Shurman said.
Shurman said collective agreements are under negotiation and suggested that part of that negotiation can, and should, include a zero increase and a wage freeze.
He wouldn’t speculate on whether the PC party will vote against the budget, the date of which has not been set.
For the NDP, a main concern was the lack of specifics on the looming changes to the health-care system.
“When this government starts to say we’re going to transform the health care system, I think we all have to be pretty nervous,” said NDP leader Andrea Horwath.
“The other thing that’s possible is ‘transformation’ is just a code word for more cuts.”