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Ontario won't scrap all-day kindergarten despite Drummond report: Duncan

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TORONTO - Asset sales and privatization are on the table as Ontario looks to balance its books, but scrapping full-day kindergarten is not, the finance minister said Monday.

The province will sell the LCBO's headquarters property on prime Toronto real estate near the waterfront, a move expected to generate $200 million, Dwight Duncan said in a speech to the Economic Club of Canada.

A long-awaited report from former TD Bank economist Don Drummond on Wednesday is expected to recommend harsh service cuts to eliminate Ontario's deficit.

The Conference Board of Canada estimated last week that it could rise to $16 billion in 2017-18. But Duncan said the report will suggest it could reach $30 billion by then if steps aren't taken.

The Liberal government will continue to slow down the rate of growth in government spending — they committed in the last budget to capping it at 1.4 per cent each year for the next six years — but Drummond will recommend holding spending growth at one per cent.

"In the budget process the government may raise education or health more than that and some others less than that," Duncan said after the speech.

But cuts are coming, Duncan warned, and he stood by the government's timeline of eliminating the deficit by 2017-18.

"The more we are able to transform the way we deliver public services, the less we will have to cut, and that means we will be better able to protect schools and health care," he said.

Duncan said the Drummond report will recommend axing full-day kindergarten, a cornerstone of Dalton McGuinty's agenda as the self-described education premier.

But that's not on the table, Duncan said.

The report will contain 362 recommendations, and the Liberal government does not agree with all of them, but they will work with opposition parties to strike the right balance, he said.

The government will "seriously" consider freezing the corporate tax rate, as per a suggestion from the NDP, who backed off from a proposal to raise it, Duncan said.

Progressive Conservative finance critic Peter Shurman said he doesn't doubt the Liberals will follow through with a corporate tax rate freeze, as a way to get the NDP to support the minority government's next budget.

He also slammed the government for not campaigning on any of the new plans last fall.

"This government essentially misled Ontarians in the election in October," he said. "They talked about stability and what they've done is destabilize."

In addition to the sale of the LCBO headquarters property, ServiceOntario will have more private sector involvement. It is five times more costly for an Ontario resident to access those services in person versus online, so the government is eyeing savings by driving people to the ServiceOntario website, Duncan said.

But doing so requires a "significant capital investment," for which the province will look to the private sector.

Privatization of ServiceOntario makes no sense, said NDP Finance critic Michael Prue, who said the agency turns hundreds of millions of dollars in profit.

"It'll be worse service because of things like auditing," he said. "They're not going to pay for things that won't make them money, so you're not going to have things like special audits to make sure it's done right."

Duncan also said he will look at cutting the $345 million in subsidies given to horse racing in Ontario each year through the OLG.

That amount is more than 10 times the amount that British Columbia, Alberta and Manitoba combined provide to horse racing, and that money could pay for more than nine million hours of home care, Duncan said.

"We are reviewing every program, every asset and every function of government," he said.

"We are considering if government should be in a specific line of business or service delivery."

Prue said ending the subsidy would be "the death knell of horse racing in Ontario."

It is a major industry in Ontario. It employs a lot of people...If you're going to get rid of it then it needs to be staged so that at least some part of that racing industry survives in Ontario."

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