It is a tale of two provinces.
Quebec, highly indebted, is resolved to eliminate its deficit. Ontario, less highly indebted, is resolved to ignore its deficit problem.
On a per capita basis, Ontario’s $12.5-billion deficit is much worse than Quebec’s, at $3.2-billion. But whereas both the previous minority Parti Québécois government and the newly elected Liberal majority one pledged to balance Quebec’s books within two years, Ontario’s Liberal government couldn’t appear to care less about the province’s deteriorating fiscal situation, judging by Thursday’s budget.
Assuming that Quebec does act, Ontario is thus about to become the weakest, fiscally, among the Canada’s larger provinces. Sure, the Ontario Liberals have promised to balance the books in 2017-18. Those who believe that promise will be betting on the Toronto Maple Leafs for next year’s Stanley Cup final. Obviously, the Liberals’ polling has revealed that their voters, or those who might support them, care little or not at all about the deficit and want the government to avoid any tough spending decisions.
The Ontario government believes that a big injection of new infrastructure spending will create enough jobs and swell government coffers enough to bring down the deficit. Another Leafs bet.
There was a time a while back when Premier Kathleen Wynne seemed refreshingly prepared to tell the truth, when she said that infrastructure around Toronto should be paid for by those who use it, as in with tolls or taxes. But when the other party leaders – Progressive Conservative Tim Hudak and New Democrat Andrea Horwath – irresponsibly said that infrastructure could be paid for by eliminating wasteful spending or raising business taxes, Ms. Wynne lost the courage of whatever convictions she had.
An election might flow from this budget. This time, the province can do without the dance of the seven veils as Ms. Horwath strings the Premier along, extracting concessions in exchange for propping up the Liberals. Rather, Ms. Wynne should get defeated on the budget and have an election – in which, quite frankly, it would be hard to know for which party to vote.
The Liberals deserve to be defeated, if for no other reason than the reeking gas-plant scandal, but also for running the province into the fiscal ditch. (They have done very good things in health care and deserve credit for them.)
The Conservatives have taken on the sharp edge of the federal Harperites, and are therefore a “wedge” party rather than one that can appeal to a broad section of Ontarians. Mr. Hudak has not caught on with the public and is unlikely to do so. The party might do better if some voters, fed up with the Liberals, hold their noses and vote Conservative.
The Ontario NDP has become a nickel-and-dime party, tossing out silly little bribes to various segments of the electorate, a party without a vision.
If the province’s voters are in despair, who can blame them?
With this budget, Ms. Wynne‘s Liberals did something rarely seen these days. They raised taxes on higher-income individuals, the aviation industry and tobacco, and to create an Ontario pension plan. And still they increased the deficit.
Most governments raise taxes to reduce a deficit, but this government raises taxes to spend more money. It’s sort of the way Liberals governed federally and in Ontario some decades ago – this party really does deserve the label of “tax-and-spenders,” because one senses they wear it with pride.
There was a lot of exaggerated rhetoric about Ontario’s bright future in the budget, with all hard truths banished. Alas, Ontario’s energy costs are rising sharply. Its auto industry is attracting relatively little investment. Its research and development record is average at best. Its big natural resource play (the northern “Ring of Fire”) will be tied up for years or decades by aboriginal claims. Its manufacturing is hollowing out (with some notable exceptions). Its northern, southwestern and eastern (apart from Ottawa) regions are in rough shape, and now it has a rising debt burden.
Heading into a vote, Ms. Wynne’s government decided to try to spend its way to re-election. It didn’t make one hard decision, although these will eventually have to be made. Pity whichever government comes next – even if it’s a Liberal one.