A financial update that forgot about the environment - without it, nothing else matters.

Rivers 100x100By Ray Rivers

November 20th, 2018



They’re calling it an ‘economic outlook and fiscal review’. After all it’s been less than six months since Ford rode his big blue machine into the premier’s office. But it’s clear from this economic statement that his team hasn’t yet sorted out all its priorities, even as the brain trust tries to deliver on some of the promises from the election campaign.

The deficit was just one of Ford’s prime promises, and the PC’s s have managed to wrestle it down by a whacking half billion dollars to a mere $14.5 billion. Of course the deficit would be even lower had Ford just accepted the auditor general’s estimate rather than creating his own numbers. But it makes better politics if you can claim you inherited a huge deficit.

And what we are seeing of the accounting is a little confusing because Ford’s finance minister, Vic Fedeli, insists that they actually saved the taxpayers over three billion dollars. He is obviously referring to the price of the environmental programs his government killed. But getting rid of ‘cap and trade’ also killed the goose that laid the golden egg which funded those green initiatives.

Money in your pocket

The statement is pretty clear. Is it the direction the Ontario economy should be going in?

Conservatives are about nothing if not cutting taxes. And Ford, true to his word, has run up half billion dollars of new debt by providing a tax credit for those earning less than $30,000. This credit, called LIFT, is being sold as an alternative to allowing the minimum wage to rise to $15. But nobody is buying that since two thirds of workers in that income range already don’t pay any taxes. And allowing minimum wages to rise wouldn’t have increased the deficit.

He is also dabbling in trickle down economics by killing the income surtax for the wealthiest in Ontario – those earning more than $300,000. Tax cuts at the top and bottom mean that the middle class will need to make up the difference eventually – subsidizing everyone else.

And while the government may take credit for a four cent gas pump price drop, that should be kept in context. Market forces alone have reduced prices by over 25 cents from earlier this year, and those forces may just as easily reverse direction into the future. And then an imminent federal carbon tax will cost at least another four more cents.


A program that will last less than a year. Very tough on those that lose the benefit.

Perhaps the biggest cost saving in this mini-budget actually comes from dropping the universality of the ‘OHIP plus’ drug plan, excluding those with an existing private health plan. Clearly this was something the previous Liberal government could have done and it is a good example of the kind of efficiency Ford had presumably been talking about. Education spending appears to not have been touched and health spending has increased ever so slightly, helping Ford keep his promise of providing more beds.

The government is taking heat for terminating three oversight agencies which monitored francophone rights, child care and the environment. Despite promises to continue to deliver this oversight through the auditor general or ombudsman offices, it is unlikely the Environmental Bill of Rights will survive. And there is a double whammy for Franco-Ontario residents as a French language university proposed for Toronto is also canned. That is on top of the three satellite university campuses Ford has already chopped.

Government employees and civil servants take part in a demonstration against the Spanish government's latest austerity measures, in the center of Madrid, on November 16, 2012. Spain announced on November 15, 2012 it has moved into a second year of a job-killing recession, a day after millions joined anti-austerity strikes and vast protests. AFP PHOTO/DOMINIQUE FAGET (Photo credit should read DOMINIQUE FAGET/AFP/Getty Images)

Is never cutting costs good financial stewardship?

Overall this mini-budget is about austerity as the government looks into the nooks and crannies of its programs to save some tax payer dollars. Of course much of those saving will end up funding the PCs own priorities, like the tax cuts and the senseless fight with the federal government over the carbon tax – which legal experts expect them to lose. A hiring freeze has also helped keep the cost of government down, although Ontario already had the lowest provincial public sector costs per capita in Canada.

And the overall effect of the budget will be contractionary at a time when Ontario is likely nearing the end of its economic boom cycle. Cutting the renewable energy and energy retro-fit programs, formerly a key growth area, will hurt all the working people that Ford keeps promising to help. Trickle down tax cuts for the rich never pay for themselves in increased economic activity and serve more as drain than an economic pump. Finally, the lower income tax cuts pale compared to the economic spending power of a $15 minimum wage for those who spend everything they earn.

But, Ford did deliver on his Buck a Beer promise – sort of.

If this budget was intended to stimulate growth and employment it is a failure. And despite the rhetoric and hype, Ford is pretty much retaining most of the previous government’s initiatives, even if that means turning what he called a Liberal mess into a PC mess.

Except when it comes to the environment! The often promised new climate change plan is nowhere in evidence and if it ever does arrive may likely surface as a piece of tokenism – like a page from the former Harper federal government’s playbook on the environment. But we should remain optimistic.

Climate change fire

Catastrophic fires in California are now an annual thing.

Climate change waves

Flooding on the east coasts and hurricanes that demolish communities are now part of the hurricane season.

For a budget which does so little, especially even it comes to the deficit, its pictorial presentation as a comic book almost seems appropriate. But there are serious issues facing the province and one of the most critical is nowhere to be seen, not even in the closing statement… “We gladly tighten our own belts now, knowing that it will provide this generation and future ones with the secure, prosperous future they deserve.”

What good is it to balance the books when the very planet our lives and livelihood depend on is in peril?

Notably absent from Ford’s mini-budget is any attempt to mitigate the province’s contribution to global warming. That is no less serious a public concern than the debt, especially for Ontario’s youth. But at least we can take comfort from the immediate extension of liquor store hours and the upcoming whacky weed stores next year.

Rivers hand to faceRay Rivers writes regularly on both federal and provincial politics, applying his more than 25 years as a federal bureaucrat to his thinking.  Rivers was once a candidate for provincial office in Burlington.  He was the founder of the Burlington citizen committee on sustainability at a time when climate warming was a hotly debated subject.   Ray has a post graduate degree in economics that he earned at the University of Ottawa.  Tweet @rayzrivers



Background links:

Mini-Budget –     Cutting Oversight –    More Cutting

Even More Cuts –     Environmental Commissioner

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3 comments to A financial update that forgot about the environment – without it, nothing else matters.

  • William Boyd

    Ray: Thank you again for keeping global warming and consequence foremost. As I also see this as the most consequential issue facing all of us as it will continue to be for…ever.

    Disturbing, as I know you do appreciate, is how, at least, the U.S. voting public (hard to assess where non-voters are on this basket of issues are, as many reportedly see nothing but futility in identifying voting with any meaningful change) view global warming ranking among the top ten issues: namely, it does not rank.

    You and the readership might examine the current issue of “Science” in which appears “How behavioral science can help conservation.” Similarly pertinent is a recent, call it, “citizen op-ed” in past weekend’s Washington Post “local section” that cites data per a national survey conducted by Yale U, et al.: namely, 80% “believe” in global warming, but only 40% view global warming as affecting them directly–yeah, superficially, pretty screwy dissonance there. For more by the way on global warming, consider this Yale website: https://climatecommunication.yale.edu/

    Regards from one of the lower 48.

    Bill in Virginia

  • Hans

    Every new government blames its predecessor but that isn’t helpful.
    There is plenty of “waste” that could be reduced, starting with the large number of government “agencies”. Many of these agencies appear to provide mainly “jobs for the boys and girls” who are well connected politically, and post-retirement jobs for politicians. Each agency has to have a “CEO”, VPs, staff, offices, etc., instead of simply having a manager who reports to a deputy minister or assistant deputy minister.

  • Stephen White

    The Provincial Auditor Bonnie Lysyk, provided pretty conclusive proof to confirm that the previous Liberal government grossly underestimated the size of the provincial deficit. The Liberals did not include the cost of compensating power generators or interest on the money borrowed for the Fair Hydro Plan in their calculations. She also advised the previous Liberal government they did not have a legally enforceable right to unilaterally access the assets of the OPSEU and Ontario Teachers’ Pension Plans, so these should not have appeared on the balance sheets. Most accountants and financial analysts seem to concur with the PCs’ assertion that the deficit was a lot higher than the Liberals’ optimistic estimates.

    That being the case, given all the cost cutting and cancellation of existing and proposed programs, I’m astounded the deficit is still at $14.5 billion. Why isn’t the deficit lower? If the deficit was, as many have indicated, $15 billion, does that mean all the cost-cutting and cancellations only saved $500 million? The other issue the Tories are going to have to deal, sooner than later, is developing a new environmental plan. It’s all fine and good to say they don’t want a carbon tax, but what is their alternative strategy to deal with global warming and environmental issues?