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Don Drummond, TD Bank FInancial Group is photographed during an economic outlook 2009 panel discussion at the Economic Club of Canada in Toronto on Jan. 7, 2008. (Kevin Van Paassen/Kevin Van Paassen/The Globe and Mail)
Don Drummond, TD Bank FInancial Group is photographed during an economic outlook 2009 panel discussion at the Economic Club of Canada in Toronto on Jan. 7, 2008. (Kevin Van Paassen/Kevin Van Paassen/The Globe and Mail)


Why Drummond's doomsday report is not all bad for the Premier Add to ...

At first glance, Dalton McGuinty had good reason to be flummoxed.

The message from the economist he had hand-picked to help steer Ontario’s budget back toward balance was brutal. Previewing his coming report, Don Drummond publicly pronounced that economic growth had permanently stagnated under Mr. McGuinty’s watch, meaning the province’s entire model of program spending was no longer sustainable. And by the way, some of the Premier’s proudest investments – smaller class sizes, for instance – were poor value and should be reversed.

But on Thursday, Mr. McGuinty and his advisers were sanguine. They were evidently prepared for the stories that ran that morning in The Globe and Mail and the Toronto Star, likely because they were in the loop about Mr. Drummond giving interviews. And they seemed perfectly happy for the Premier to spend his first public event of the year talking about the economist’s broadsides.

To understand why that is, it helps to bear in mind that – from the perspective of Mr. McGuinty and his Finance Minister, Dwight Duncan – Mr. Drummond’s commission on public-service reform is increasingly being viewed as an exercise in table-setting.

The government might have hoped, when it struck the commission last spring, that all the answers to get out of deficit would be provided. But while it still might find considerable value in many of the report’s roughly 400 recommendations, the report is unlikely to be the blueprint for the next provincial budget. Instead, the Liberals are clearly hoping that Mr. Drummond’s doom-and-gloom will provide political cover for their own, somewhat milder austerity plan.

The Liberals probably won’t commit to getting annual spending increases in health care below 3 per cent, as Mr. Drummond has proposed; they certainly won’t scrap their own signature education policies. If they reject Mr. Drummond’s unusually pessimistic forecast of 2-per-cent economic growth in perpetuity, and bring in some additional revenues by cancelling planned corporate tax cuts, they should generally be able to promise fewer cutbacks than the ones Mr. Drummond will call for.

But with a $16-billion deficit, and credit agencies threatening downgrades, whatever the government comes up with still won’t be an easy sell. Not to the workers in the broader public-sector – doctors and teachers among them – whose contracts will be up for negotiation this year. Not to the general public, which was hardly well-served by a recent election campaign in which all three provincial parties glossed over the leaner times ahead. And not to many Liberals themselves, including some of the ones around the cabinet table, who hardly got into public life because they were looking to cut things.

Those realities will be a little harder to deny now that Mr. Drummond is using his commission’s platform to more or less pronounce that the province is in crisis.

Meanwhile, Mr. McGuinty will be able to point to Mr. Drummond’s proposals as he tries to make his own more palatable. Where the economist has recommended what the Liberals planned to do anyway, his report will provide justification. And his more draconian ideas will be pointed to as grim inevitabilities if the Liberals’ alternatives aren’t adopted.

Of course, Mr. McGuinty’s decision to appoint the commission could still blow up in his face. If Ontarians look closely at what Mr. Drummond has to say – at his implicit (and in some cases direct) criticism of the Liberals’ record – they might reconsider the steady-hand pitch that helped the Premier get re-elected this past fall.

But Mr. McGuinty is making the best of a bad situation. And this week’s communications, however counterintuitively, were viewed by his office as a good start.

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