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To fix Ontario's finances, Drummond 'absolutely' has to consider health care, education

Don Drummond is a former Toronto-Dominion Bank chief economist who has advised federal and provincial governments many times in the past.

Kevin Van Paassen/The Globe and Mail

The economist in charge of figuring out how to wrestle Ontario's budget deficit to the ground says he will look at every aspect of the province's spending, including the key sectors of health care and education.

Don Drummond, a former Toronto-Dominion Bank chief economist who has advised federal and provincial governments many times in the past, has been appointed chairman of a commission with a mandate to figure out how to rejig the province's public service so it is more efficient.

The province, in its budget tabled on Tuesday, said the Commission on the Reform of Ontario's Public Services "will not make recommendations that would increase taxes or lead to the privatization of health care or education." And Finance Minister Dwight Duncan said Mr. Drummond has "rejected the slash and burn approach."

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But in an interview on Tuesday, Mr. Drummond said he will consider almost anything to fix the province's finances. He said health care and education are such huge components of the Ontario budget that he "absolutely" has to consider them.

With health care making up by far the largest proportion of government spending, and growing at about 6 per cent a year, it clearly is crucial to rein in spending in that sector, he said, even though it is the most sensitive politically.

"You can't just waltz in there and say, 'I've got a brilliant idea. Here's how you can take money out of health care.' If it jeopardizes access and quality, no one is going to stand up and applaud," he said.

While it is clear that politicians and citizens want a single public payer for health care - in other words, a publicly funded system - "people are much less troubled right now by private-sector delivery," he said.

The medical sector already has some private-sector players, such as laboratories.

Last year, Mr. Drummond co-authored a TD Bank report that suggested public health care in Canada is unsustainable the way it is currently organized. The sector would be taking up 80 per cent of total program spending in Ontario by 2030 if left unchecked, the report said.

Mr. Drummond said he considers his overall mandate on the Ontario commission is to figure out "how to deliver the best public services for a given amount of money." With the government in a deep deficit that it is not planning to shed until 2017-18, "there is obviously an element of cost cutting involved in it."

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Mr. Drummond said the province's fiscal position is "not desperate" but "needs to be addressed."

He said he was approached about chairing the Ontario commission "a couple of days ago" and he still does not know how much he will be paid for the job.

Ontario NDP Leader Andrea Horwath expressed misgivings about a shift of government functions to the private sector, saying the budget "opens the door to American-style privatized public-service delivery." Ontario Conservative Leader Tim Hudak dismissed Mr. Drummond's panel as "a bureaucratic commission [that will]hire more consultants."

The Ontario budget made it clear that the government wants private entities to deliver more of its services. "Just because a government department is delivering a program or service today does not mean it should deliver that program or service in the future," the document said. "Existing assumptions and traditional models must be revisited…"

The provision of public services should be open to "new forms of competition," it said, and that may mean making use of private companies, not-for-profit entities or other levels of government.

Mr. Drummond's commission should even look at "exporting and monetizing" some of the expertise in the public sector, the budget said. For example, the province should consider selling government-owned intellectual property overseas, the document said.

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About the Author
Reporter, Report on Business

Richard Blackwell has reported on Canadian business for more than three decades. At the Financial Post and the Globe and Mail he has covered technology, transportation, investing, banking, securities and media, among many other subjects. Currently, his focus is on green technology and the economy. More

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