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opinion

Bob Rae was Premier of Ontario 1990 to 1995 and leader of the federal Liberal Party 2011 to 2013.

The key in assessing any budget is to go to the numbers behind the narrative. The theme of the Ontario budget is the need to maintain capital spending, hold the line on operations, and with the strategic sale or partial privatization of assets and the benefits of economic growth, steadily work our way back to balance. By that point Ontario's debt would be about $315-billion, and debt payments would climb to over 10 per cent of the budget.

Capital spending is running at just over $11-billion on a total budget of $131.9-billion. That's just over 8 per cent, hardly an extravagant number. Governments are getting better at providing a strong narrative to what explain they're doing, but the numbers don't show an unprecedented commitment to infrastructure.

Finance Minister Charles Sousa wants to highlight spending on the capital needs of the province, and he can't be faulted for that. The challenge he will face – one I am very familiar with – is that this spending will contrast with the determination of the government to show restraint on the operations side, which means salaries and wages.

Most of the province's budget pays people's salaries – bureaucrats, doctors, teachers, professors, nurses, you name it. Ontario has resisted tax hikes and major spending reductions, but by limiting spending and talking about "in-year savings," let there be no doubt that the province is in restraint mode.

This will mean a challenging year for school boards and hospitals, particularly since things like drug costs are harder to control. Medicare is driven by patient demand and new technology (read new drugs). This remains the biggest single cost of Ontario's budget, and the management of that cost does not lie with one or two ministers.

We can expect more confrontations with teachers and others as their wage and working-condition demands cannot be met by a budget that pledges no net increases. The government wants to avoid making centralized decisions about this, so is pushing the responsibility back to school boards and the multitude of agencies and ministries who make the decisions. They will have a difficult time.

The objective of climbing out of debt when the economy is growing is a good one, and is widely shared across the political spectrum. The headlines all say "no big cuts, no big tax hikes." From a political standpoint this is shrewd, and if the economy performs, and the savings are found, what Mr Sousa is proposing is doable. But that doesn't equate with being easy. Interest rates have to stay low, real savings have to be found, and the world economy has to co-operate for the next several years.

As people pore over the numbers, and what they really mean, the broad strokes of both the federal and provincial budgets are now clear. The Conservatives are running as the "low tax" government, and are paring spending and raiding the cookie jar to come up with a balanced budget. The provincial Liberals are committing to maintain capital spending, saving money on operations, holding the line on taxes, but trying to show they are more compassionate and progressive. They are not afraid to talk about poverty, climate change, and the needs of aboriginal people, which is a refreshing contrast to what we see coming out of Ottawa.

It will be interesting, to say the least, to see in this election year how these contrasting choices and narratives become part of the broader national debate. Surely we're not going to buy the line that an election is a bad time to be talking about policy, choices, options and decisions.

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