It is days before Don Drummond is to deliver his much-anticipated prescription for beating Ontario’s finances into shape, and the former Toronto-Dominion Bank chief economist strolls into a restaurant looking every bit a monument to the austere financial discipline he preaches.
Mr. Drummond is unshaven, wearing sneakers, corduroys, a black T-shirt and an old TD jacket peppered with dog hair.
“We have seven animals in the house right now,” he later says, listing two dogs and a rabbit that belong to him and his wife, Susane, a cat that belongs to one of his grown daughters, plus two more dogs and another cat that they are sitting for his sister-in-law.
For the most part, making sure the animals get along has been surprisingly easy, he says. It’s certainly nothing compared to the massive “radicalization” he is about to call for in how Canada’s most populous province operates. Mr. Drummond sounds supremely confident that his sweeping and sometimes draconian proposals offer the best hope for Ontario to get its house in order. But he is realistic about how hard it will be to implement them.
“No government in the world has ever done this before,” he says. “I’m calling for a revolutionizing, a radicalization, of virtually everything a government does, to make it focus on efficiency, not just in one area at a time, but simultaneously in virtually everything they do. It’ll take unbelievable courage and unbelievable intelligence, and it’ll take an unbelievable capacity at both the political level, and the bureaucratic level.”
It has been about a year since Premier Dalton McGuinty asked him to dive into Ontario’s public services and find ways for the minority Liberal government to wipe out a $16-billion deficit by 2017. Mr. Drummond and his three co-authors on Wednesday served up 362 recommendations spanning more than 540 pages – the biggest print job in Queen’s Park history. He is proud of this.
“The executive summary is 62 pages,” the vegetarian (and exercise nut) quips between bites of a grilled brie-and-pear sandwich at The Black Dog, a charming gastro-pub near his home in Manotick, Ont., a quaint riverside town south of Ottawa. “We call it the ‘summary for the not-very-busy executive.’ ”
His proposals range from overhauling health care by moving more services away from hospitals, to scrapping electricity subsidies, to making tax breaks for businesses conditional on whether they help boost productivity, not just whether they create and maintain jobs. The general thrust through the entire document is making the success of all programs measurable, so they are run more efficiently, or junked. So far, the McGuinty Liberals have outright rejected only one recommendation – to kill all-day kindergarten.
“I hope they’ll implement them, but if they don’t, I don’t think it’s because they weren’t good ideas,” he says. “I would probably do 350 of them even if I had a huge fiscal surplus. I mean, why would you want to run a program inefficiently?”
That does not mean he is oblivious to the heavy lifting and highly creative thinking it will take to turn his proposals into reality. As an official in the federal Finance Department for 23 years until 2000, he is exceptionally familiar with the difference between elected officials acknowledging they have a crisis-in-the-making, and taking pre-emptive, politically risky steps to address it.
His experience at Finance during the deficit-slashing 1990s – when he became a trusted adviser for Paul Martin – shows governments can force-feed bitter medicine and live to tell about it.
This time, though, the task looks much tougher. The roughly 3-per-cent annual economic growth rates that Ontarians were accustomed to before the recession are likely gone forever. Instead, the province’s economy will grow about 2 per cent a year – even less if productivity doesn’t improve. With weaker growth prospects and the erosion in revenue that comes with that, plus an aging work force and declining industrial base, Mr. Drummond argues the only real ways for the province to tackle its debt while it can still be controlled are through significant, sustained tax hikes (which he rightly says voters would not accept) or by putting a lid on costs – permanently.