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Don Drummond by Anthony Jenkins (Anthony Jenkins/The Globe and Mail/Anthony Jenkins/The Globe and Mail)
Don Drummond by Anthony Jenkins (Anthony Jenkins/The Globe and Mail/Anthony Jenkins/The Globe and Mail)

THE LUNCH

Don Drummond: Taking a bite out of debt Add to ...

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.

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“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.

“It’s not just a question of taking money out for a few years and then life’s good, as it was in the 1990s,” he says. “It’s there forever, and yet you still have to operate quality services.”

Adding to the challenge, he says, is that during the Mike Harris and Ernie Eves eras, Ontario’s public service was rarely “asked to flex its analytical muscles,” causing them to atrophy. As an aside, he warns a similar phenomenon is occurring in Stephen Harper’s Ottawa and says the federal Conservatives would be wise to study Ontario’s experience. “The process of re-building that capacity is under way, but it is a long haul,” he says.

He is careful to note that Ontario isn’t on the proverbial burning platform just yet. Still, he argues that what is now a controllable situation could spin out of reach quickly without his changes. (The province’s deficit could balloon to $30.2-billion by 2017, he says, and its debt load, already worth 35 per cent of annual economic output, could soar to 51 per cent.) “Look at all the European basket cases and when they were last at 35 per cent,” he says. “Greece was the earliest (in 1984), but most of the others were in the late 1990s or the early 2000s. They got their problem basically over the last 10 years, but they just let it go off the rails.”

Throughout the media blitz that followed the report’s release, Mr. Drummond was asked what he thought of a comment from Ontario Finance Minister Dwight Duncan, who said he will work in the coming weeks to figure out which parts of the report should go in his budget next month – while pointedly noting that it is not Mr. Drummond who will live with the political consequences.

“There is a finite set of possibilities for getting the province back to a balanced budget in a reasonable time period,” Mr. Drummond told me when I caught up with him on Thursday morning. “We picked 362, there’s many other variations. But as you reject some of the 362, they have to be replaced by something else.”

With what he has called a dream assignment now over, Mr. Drummond, 58, gets another shot at renewing his “12-year odyssey” to find a more relaxed existence. He thought he had done this when he left Finance for TD, to no avail. “If anything, I worked even harder,” he says. “I didn’t need to, I just got carried away.”

The plan is to spend more time on his teaching duties at Queen’s University, where he has held a fellowship since leaving TD in 2010. Also, soon he will hear back on funding for an ambitious research proposal to try and get to the bottom of why Canada’s productivity growth is so tepid.

The McGuinty Liberals, meanwhile, were always expected to move swiftly to quash the sense they had contracted out their budget process to Mr. Drummond, to the tune of $1,500 a day. (Mr. Drummond, it should be noted, argues his compensation was a steal, and says he billed just over 50 days despite having worked closer to 100.) In fact, he tells me, the Liberals asked him to talk about the report for 36 hours, and then leave the sales job to them. But in our follow-up chat, while relieved to be through most of the post-release interviews and generally pleased with how the report was received, he didn’t sound like someone eager to happily ride off into the sunset.

“My title at Queen’s is actually ‘Fellow in Global Public Policy,’ so, guess what? I get involved in public policy issues,” he says somewhat defiantly. “So, I’m not going to disappear.”

_____________________

CURRICULUM VITAE

BEGINNINGS

Born and raised in Victoria.

Earned an undergraduate degree at the University of Victoria, followed by a master’s in economics from Queen’s University in Kingston.

HOME LIFE

Lives in Rideau Forest, a semi-rural development of country estates near Manotick, Ont., an old mill town on the Rideau River just south of Ottawa.

Married for 30 years to Susane Latremouille, a former researcher at Industry Canada.

Has two grown daughters; Nathalie, 27, a veterinary technician studying biology and environment at the University of Ottawa, and Julie, 24, a visual journalist interning with a Los Angeles-based documentary maker.

PASSIONS

Getting to the bottom of vexing public-policy issues. (“I actually enjoy doing this kind of stuff, so it’s not really work,” he says, describing his routine for several months of being holed up in his study for hours each night working on the commission’s report. “Particularly if you ever do figure out how it works and how it could work better. I think that’s neat.”)

Tennis, lifting weights, Pilates and – most recently – yoga.

Walking the family’s dogs.

CAREER

Joined the Finance Department in Ottawa in 1977, rising through the ranks to Associate Deputy Minister, where he co-ordinated planning of federal budgets, before leaving in 2000. (“I never once asked for a promotion and I never actually applied for a promotion. It was just that always somebody came and said, ‘We have some challenges in this area, we want you to go there for a while,’ and I’d say, ‘yeah, fine.’ There was nothing ever strategic about it.”)

Joined Toronto-Dominion Bank in 2000 as senior vice-president and chief economist. While there, was asked to compete for the Bank of Canada Governor’s job after David Dodge said he would not seek a second term, but opted against it.

Left TD in 2010 to teach part-time at Queen’s, his alma mater, while still pursuing research interests such as productivity.

In 2011, Premier Dalton McGuinty tapped him to head the Commission on the Reform of Ontario’s Public Services.

Jeremy Torobin

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