Deficit fallout

By Admin Wednesday October 03 2012 in Editorial
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Being a minority government with a focus on deficit cutting will not win any popularity contests, and Ontario’s Liberal minority government is carrying a lot of baggage. It is being dogged by criticism over controversial spending and questions of whether some of the blame for Ontario’s debt crisis should be seen in light of the Liberals’ spending.

 

The ‘Majority Opposition”, as Premier Dalton McGuinty referred to the Progressive Conservatives and the New Democratic Party this week, is making the most of these controversies.

 

The most recent offensive was a unanimous vote by the PCs and the NDP calling for censure of energy minister Chris Bentley for contempt of parliament, a first in the 220-year history of this assembly.

 

The charge has to do with a delay in releasing documents detailing the cancellation, at a cost of $230 million, of two power plants to fulfill campaign promises that essentially helped the Liberals win five seats in the last provincial election. A probe by the finance committee will follow. This is a very serious matter that could see the minister go to jail. That might seem unfair to Bentley, since Brad Duguid was energy minister when the plants were cancelled. But it was under Bentley’s watch that the documents the opposition parties sought were withheld. And, although they have now being released, some 36,000 pages in all, 2,000 pages have been redacted or blacked out.

 

Some pundits suggest, however, that there would likely be no legal sanctions resulting from the finance committee’s investigation, but that the strategy will carry some political weight as the competing parties maneuver to defeat the government.

 

Maybe this government’s days are numbered. Already there are musing about a provincial election as early as next spring.

 

The opposition parties are also expressing concern over the government’s proposed Protecting Public Services bill aimed at cutting the $15-billion deficit by freezing wages and cutting or rolling back benefits across the range of public sector workers.

 

The NDP’s Andrea Horwath, in opposing the bill, has already taken the position that legislating the parameters of contract negotiations is unacceptable and PC leader Tim Hudak’s comment that the Liberals are “not going far enough” with this bill suggests he would demand that the cuts go further and deeper before agreeing to support it.

 

The anger among public sector workers is history repeating itself. Teachers have already held protests at Queen’s Park, echoing those held during the Mike Harris era and, despite the proposed legislation against striking, a majority of secondary school teachers have in fact voted in favour of strike action, which could occur before Christmas. Their protest action so far includes their refusal to volunteer to supervise students’ extracurricular activities.

 

Ministry of Education’s ancillary staff, including clerical and maintenance workers, are also in line for wage freezes and rollbacks.

 

When it comes to reining in a deficit, every provincial government has received push back from public servants. When the province faced an economic crisis during the 1990s, public sector workers were enraged over lost wages as a result of the NDP government’s unpaid ‘Rae Days’. And PC premier Harris also got a serious fight from teachers. Now McGuinty is taking heat.

 

Governments find their way into deficits because they borrow to meet the cost of providing services. Credit is used as a way to keep an economy growing and moving, but since the result is eventual contraction and deficit upheaval, it seems unwise to keep relying on such a system.

 

What is really needed is a structural change so that budgets can only be indexed to revenue. It’s either that or raise taxes. Maybe both.

 

If not, we can expect a repeating cycle of overspending followed by deficit-based wage and workforce contraction.

 

You’d think politicians would know by now that’s no way to manage a government’s finances.

 

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