Winnipeg Free Press - PRINT EDITION

Ontario's 'lite' budget fails to rein in wild spending

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If we were a teacher marking the Ontario Liberal government's new budget, we would give it a low but passing grade.

The Liberals are working hard to get along with their New Democratic classmates and to ingratiate themselves with the general public. They are not trying hard enough to achieve what should be their highest priority -- and that is to wrestle their own wild spending habits under control.

True, the Liberals are making limited progress and for this reason we believe the legislature should pass this budget. To their credit, the Liberals propose to freeze public-sector wages until 2017-18, when the deficit has finally been erased. Because of ambitious steps such as this, Ontario should not be plunged into an election over this spending plan.

Even so, the Liberals and Finance Minister Charles Sousa could do better. They are failing to deliver the programs and services Ontarians need at an affordable price. Based on the budget's own figures, program spending will rise from $113.6 billion in the fiscal year just ended to $117 billion in 2013-14. That's a 2.9 per cent increase. Likewise, total spending will rise by nearly two per cent in the coming year to $127.6 billion.

This is not austerity. This is not austerity lite. The spending taps have been turned back a bit but they are still soaking the ground in the red ink of the coming year's $11.7-billion deficit.

Such an outcome is especially disappointing after the more vigorous efforts in last year's budget to rein in spending. Perhaps Kathleen Wynne, who became premier just three months ago, was too eager to win support from the New Democrats to keep her minority government alive. That support will cost hundreds of millions of dollars.

True, some of these new initiatives are welcome. Increasing welfare rates and letting welfare recipients keep more of their liquid assets are worthy measures. Freeing up more money to provide more home care more quickly for those who need it is also justified. But with new spending should have come greater savings in other areas.

In theory, spending $295 million over two years to boost youth employment should address a serious problem. In practice, Ontarians have a right to be skeptical. The Liberals are simply bad managers.

Remember the Green Energy Act, which resulted in higher rates for wind and solar power than for conventional energy sources? It drove up energy costs. It did not deliver the new manufacturing sector, the new jobs or the lucrative exports the Liberals once promised. Indeed there is no mention of the once highly touted Green Energy Act in this budget.

So how will the $295 million be spent? Will it create good, lasting jobs for young people? Or is it expensive but shrewd public relations for a government that still reflexively tosses money at every problem, perceived or real?

Other questions surround the budget pledge to cut auto-insurance rates by 15 per cent. It will sound good to many drivers, even though there are no plans to implement it immediately. But will it result in lower payouts to drivers who get in collisions? Will insurers raise other premiums, for home or life insurance, to make up for the lost revenue?

Some of the criticism for this budget should also be directed at the Progressive Conservatives. They opposed it from the start and offered no positive suggestions to counteract the NDP demands. The Liberals might have been more diligent in cost containment if they had been able to rely on Conservative votes for this budget.

We don't know. But we know this. More than a year ago, the Commission on the Reform of Ontario's Public Services, led by economist Don Drummond, called for the Liberals to make hundreds of drastic changes. Drummond said they needed to adopt all the changes to restore Ontario's economic health.

The government now claims to be moving forward with a paltry 60 per cent of these recommendations. And that help explains our mark for this budget: 60 per cent or a very mediocre C-minus.

Republished from the Winnipeg Free Press print edition May 6, 2013 A9

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