Leafing through the Ontario government’s latest fiscal plan, the thought occurs: What distinguishes this as a conservative, or at least Conservative, or even a Doug Ford budget? How is this different from anything, say, a Kathleen Wynne government might have produced?
Answer: it isn’t, except for maybe spending more than she would have.
It’s true. In the fiscal year just started, 2023-24, the government of Ontario will spend $190-billion providing services to Ontario’s 15.4 million citizens, or roughly $12,000 per capita. Adjusting for inflation, that’s about the average since it came to power. Under Ms. Wynne, spending per capita, in 2022 dollars, averaged $11,700.
Under Bob Rae – you remember him, the NDP premier whose runaway spending so spooked Ontarians they elected the Mike Harris Conservatives to put things right – real per-capita spending averaged less than $8,700. But somehow the heartless, slash-and-burn Ford Conservatives are obliged to spend 40 per cent more than the Rae NDP. Per citizen. After inflation.
The same holds if you look at spending as a share of GDP. Under Mr. Ford – even leaving out the lockdown year, fiscal 2021 – it averages 17.6 per cent. Under Ms. Wynne: 17.2 per cent. Under Rae: 16.4 per cent.
So when Mr. Ford’s Finance Minister, Peter Bethlenfalvy, brags that the government is on track to a balanced budget, this is not a tribute to the government’s fiscal discipline. The way revenues have been flooding in, it would have to have been building missile systems to avoid balancing the budget.
The government collected $200-billion in revenues from all sources in the year just ended. That’s $20-billion more than it projected it would collect in last year’s budget. It’s $40-billion more than was projected for the same year in the 2021 budget. The budget projects similar overflows for the current fiscal year.
To its credit, the government banked most of the revenue windfall, rather than spend it: spending is only up about $5-billion over what was projected in last year’s budget. But spending had already climbed rapidly enough as it was. This year’s budget contains a chart that helpfully breaks out “base” program spending from COVID-related and other one-time expenses. It is up 27 per cent over three years: from $150-billion in fiscal 2021 to $191-billion this fiscal year. This is not restraint. It’s not even the absence of restraint. It’s dissolute, almost carnal excess.
Anyway, the budget deficit, as such, has become a meaningless target. Successive Ontario governments have moved so much borrowing off-budget that to get a half-way accurate picture of the province’s finances you have to look, not at the annual budget deficit, but the accumulated net debt, and how much has been added to it. So where the budget shows deficits of $2.1-billion last year, $300-million this year, and a surplus of $2.2-billion the next, the government will in fact take on another $14-billion in net debt, on average, in each of those years.
The government has set itself the not-very-challenging goal of holding the net debt-to-GDP ratio to less than 40 per cent. (How not-challenging is that? It was less than 30 per cent when Mr. Rae left power.) It is on track for that, but just: from its current 37.8 per cent, debt-to-GDP is projected to fall all the way to … 36.9 per cent by fiscal 2026. Assuming nothing goes wrong. The “plan,” so far as there is one, is: cross your fingers and hope for growth.
The same sense of déjà vu pervades the entire document. There is no plan to improve the province’s lagging productivity growth – again, certainly nothing that a Wynne government would not have thought of. An Ontario Made Manufacturing Investment Tax Credit? Why? Why only for manufacturing? Why this, and not an actual tax cut?
Neither is there any serious plan to reform health care, which this year will take up a record 42.5 per cent of provincial spending. God knows there is no attempt to rethink the role of government generally: to focus government on the things that only government can do, rather than trying to do everything all the time for everyone everywhere.
Trawl through the document, and you come across heading after heading that would sit happily in any Wynne-era budget. Advancing Ontario’s Critical Minerals Strategy. Creating Ontario’s Electric Vehicle Supply Chain. Promoting Regional Innovation Centre Hubs. Supporting Business Through Government Procurement. It’s exactly the same top-down, government-driven, central-planning approach favoured by the Wynne government.
Oh wait, here’s something: a promised review of the province’s tax system, one that will “prioritize competitiveness and long-term growth” as well as the “fairness and effectiveness of tax relief and supports.” Now where have I heard that before…