By Ray Rivers
June 6, 2014
BURLINGTON, ON
There was no winner in the debates this week, there rarely ever is. Premier Wynne got nailed by the gas plant fiasco as a first question, though she must have known it was coming. I suppose there is no good answer, so an apology and a promise that it won’t happen again will have to suffice.
The debate was far from her greatest moment -what was with the constant apologizing? In hindsight the gas plant locations were a mistake – every other political party would have cancelled the construction locations..
As the Editorial Board of the Globe and Mail has noted, the deficit and debt are not a crisis for Ontario – what I said last week. In addition, Ontario has the lowest cost public service (per capita) in all of Canada. So Hudak’s plans are over the top and wrong-headed. Killing one hundred thousand public service jobs , plunging the economy into recession and crippling our social programs, including health care and education, will not create his illusionary million jobs – quite the opposite. It was remarkable to hear him actually brag about his math skills, given that every reputable economist consulted has called the numbers in his plan rubbish.
The leader of the party without a platform managed to force an election that wasn’t needed and has yet to understand what corruption is. Add to that getting lost on the way to significant pension reform and you get – leadership?
Hudak claims that high energy prices are the reason investment in Ontario is faltering. But he has conveniently forgotten about his days sitting at the Harris/Eves government table, when Ontario Hydro was broken up, expensive contracts given to the private sector and multiple costly agencies created to do what Hydro had once done better. Electricity rates started going through the roof until Eves subsidized electrical bills, adding this to the very debt Hudak now rightly criticizes. In all its cost-cutting the Harris government delayed maintenance of the province’s electrical grid causing brown-outs and contributing to the big blackout in 2003.
And Bob Rae and NDP’s interference in the operations of Ontario Hydro were part of the reason Mike Harris decided to irreversibly break up the agency in the first place. Having said all of that, McGuinty had almost a decade to rectify the mess he inherited and although he has restored system reliability and shut down the dirty coal plants, the energy rates have risen and they won’t be coming down soon, regardless who wins the election. Neither the Tories nor the NDP have any more credibility on this file than the Liberals.
It didn’t matter how error filled the Million Jobs Plan was – Hudak just plowed right through the facts – the same thing Mike Harris did with his common sense revolution – which we are still paying for.
The province has two very very significantly different futures for us to choose from. June 12th is going to be a long night.
Ray Rivers writes weekly on both federal and provincial politics, applying his more than 25 years as a federal bureaucrat to his thinking. Rivers was a candidate for provincial office in Burlington where he ran against Cam Jackson in 1995, the year Mike Harris and the Common Sense Revolution swept the province. He developed the current policy process for the Ontario Liberal Party.
Background links:
Debates More Debates Globe and Mail Editorial Opposition Gas Plant Promise
“As the Editorial Board of the Globe and Mail has noted, the deficit and debt are not a crisis for Ontario”.
I am not sure who is on the Editorial Board of the G&M, nor am I an economist. I am reasonable at arithmetic however. Ontario has a population of 13 million. It costs the taxpayer about $1 billion per month to service our debt. That equates to $77 per month for every man, woman and child regardless of age. We have about 7 million employed people in Ontario. That means that every employed person in Ontario pays $143.00 per month to service the debt. Keep in mind that is “after tax $”. If we assume an average marginal tax rate (Federal and Provincial) of 30%, that means the average employed person in Ontario needs to earn $186.00 per month, before taxes, just to service the interest on our Provincial debt. If my arithmetic is correct,that means having to earn $2232.00 per annum, to service our debt. And this is not a crisis? The gas plant is a mere drop-in-the-bucket, this is THE issue (in my humble opinion as an average working guy).
Tony,
Your point is well made but sadly lost on most people in Ontario.
However, I think the situation is even worse than what you have detailed.
At a 30% tax rate it would take $204/mo. of pre-tax income or $2,448 of pre-tax income per annum.
Imagine if even half the money spent on debt service was freed up to be spent in the economy, or saved for children’s education, or for retirement, or for seniors to pay for affordable housing.
Tony – thanks again for your thoughtful comments – I’m not going to argue with your arithmetic or your sentiments – I wish we always ran a balanced budget. But here are some considerations:
1. The Ontario debt is close to the federal one, less than Quebec and similar to many other provinces.
2. Ontario, though technically a have-not province, now still puts far more into the national economy than it gets back – which contributes to our net position.
3. Ontario’s industrial sector has been badly hit by our trade policies and globalization – we need to invest to bring that sector back as we did in the 60’s and 70’s.
4. Economic growth and equitable taxation is the best way to restore our economy and our budgets to balance – plunging into a recession will not help.
Greg has corrected my number (thanks Greg) to $2448 of pre-tax income/annum spent on servicing the debt. I would love to see Premier Wynne qualify this statistic in her campaign by saying that this condition is equitable, necessary and reasonable. I, for one, believe that there would be significant push-back.
Much money has been spent with little to show for it. The private sector has lost 300,000 jobs over the last 10 years while the public sector has ballooned by the same amount. Why?
Sooner or later we have to pay the piper, and I don’t relish the thought of passing it on to the next generation.
Ray, in the caption to the picture at the end of your opinion piece you state that June 12 will be a long night.
Yes indeed. Either way.
If PC’s win I bet you’ll be tossing and turning all night long wondering why did the Ontario electorate choose to abandon the Liberal regime.
And if Liberals win I will be tossing and turning all night trying to understand why the Ontario electorate is satisfied with the last 11 years of a Liberal regime. Not to mention I will be sweating it out about when the Ontario economy Ontario will finally fail, how big will that fail be, and to which western province should I be moving to, Alberta or Saskatchewan.
(It’s just that it’s so damn cold out there in the winter that lasts 6 months.)
Editor’s note:
The photographs and the cut lines beneath the photographs are not put in place by the columnist.
LOL.
Is a colonist one who studies internal medicine, or one who voyages overseas to assert their influence on foreign lands.
I know it was just a slip of the keyboard and I don’t get too uptight about those. I know I have made more than my share of mistakes. I’m just trying to insert some humour here to relieve some of the tensions in this very important discussion.
Editor’s note: Can’t beat attentive readers – even when they don’t see the world my way. Greg Fabian caught a lovely little typo that had the word colonist rater than the word columnist. The reader and the columnist tend not to share a view point.
I have also noted that the Globe has endorsed Hudak and the Conservatives. Ray seems to have conveniently forgotten that fact.
As for James’ comment, the scandal is the cancellation and the cover up and the Liberal insistance to make the contractors whole which even the provincial auditor commented that was not required and just increased the bill beyond the minimum required.
Let’s start following the new scandal about to unfold. The bailout of MaRS. See how much the Liberals are spending on that. The opening bid is $317M.
So, if so much is know about this issues – where was the cover-up again?
The exact documents that the OPP now have a court order to obtain were already requested at the Standing Committe but the Liberals denied the documents to the Standind Committee.
It is very clear there is still information not fully disclosed and the Liberals are still covering up.
PS
Fun Fact:
One doesn’t “Delete” EMails, they exist on a server.
“There was no winner in the debates this week.” Really? Curious that so many other mainstream media outlets gave Hudak the clear nod as the winner.
“As the Editorial Board of the Globe and Mail has noted, the deficit and debt are not a crisis for Ontario.” True, but why didn’t you add that the Editorial Board of the Globe and Mail has also declared:
“On balance, in our imperfect world, we choose the Progressive Conservative Party.” Here’s the link to their endorsement, you must have missed it.(https://www.theglobeandmail.com/globe-debate/editorials/ontario-election-part-4-for-a-conservative-minority/article19047636/)
As ALL Three parties promised to kill the two gas plants in the last election.
If Mr H or Ms H had formed a government would this file still be a “Scandal?”
James, I have been making that point to people. I saw the Can. Univ. Wom. Fed. debates on Cogeco Mon night and Liberal Candidate Eleanor MeMahon said this, that ALL 3 PARTIES SIGNED TO END THE GAS PLANTS.(paraphrased.)
My suggestion is to show a copy of the signatures agreeing to close or end the gas plants on tv. and have an end to this nauseating accusations about it. We know, we know…. NOw what is anyone going to do for all of the citizens to address the many and various needs? At least we know the Liberals will carry on with the budget that they put out and was actually going to rebuild the Province. The rest makes me turn the station.
Here we go again, Ray and his view through Liberal coloured glasses. It is getting very tiring. To the point of nausiating.
There was a clear winner in the debate and there definitely was a clear loser – Wynne is a loser.
Surely you jest when an apology and promise not to repeat will suffice. It looks like it may have already repeated with the MaRS $317M+ bailout which the auditor general is now delving into. I think you’ll find it will be much higher than that.
We have to punish politicians who pull stunts like this otherwise they will continue to waste your tax dollars and my tax dollars. I don’t now about you but I cannot afford to pay anymore taxes. In fact I need to pay less taxes.
Also noted that yesterday the OPP obtained a court order to obtain more documents which are known to exist. They have 10 days to produce. I call foul on the OPP because this gets the Liberals off the hook until after the election. Didn’t Wynne previously state that all documents have already been turned over? Then what are these newly found documents the OPP is interested in?
As for the state of the economy. If it’s not in crisis right now it is definitely headed that way. If we don’t stop we will be in crisis in the very near future from which we may not recover. Our debt is now a total of $295.5 Billion (public and non-public debt; non-public debt is issued to public sector penions funds in Ontario and the CPP). It takes $11.0 Billion annually just to service the debt.
The province has a problem looming – an expense, deficit and debt problem which only one party has the sense to address now before its too late.
100,000 public sector jobs through attrition over 4 years is very easy to come up with. Heck, even Smokey Thomas, President of OPSEU said there are 60,000 management jobs in the public sector that are redundant. (ok, I’ll give you that he is probably exagerating somewhat).
Smaller, more efficient government is necessary to create an economic climate in Ontario that is condusive to businesses creating jobs. The private sector creates jobs and generates wealth not the public sector. The private sector taxes pay the way of everyone of the public sector workers.
If you want more lies, more corruption, more taxes, in other words more of the same then vote Liberal. We will all be worse off.
Mr. Hudak said that He would eliminate 100k jobs and did not change the statement until not one Economist or anyone else that I am aware of would or could endorse this plan. Then it was said that a number of them would be by attrition, likely written for him by someone else. It is obvious that none of the people surrounding Mr. Hudak could not know better than that. Most everyone I;ve spoken to even persons without all of their high school education know better than that. It is or should be an embarassment. It clearly makes no sense.
Joan, I am not sure anyone can argue against a smaller, more efficient government.
I know many who think it is the correct way to go. A friend with a Masters in Economics believes this is the right tack. Also a TTC driver friend of mine told me yesterday that he is considering voting for Tim and the PC’s.
And here is a piece published in the Financial Post by an economist of note – Phillip Cross. He is the former Chief Economic Analyst for Statistics Canada and currently the Research Director at the McDonald-Laurier Institute.
The Globe and Mail referred to him as “a straight-shooting analyst who scrutinized Canada’s economic cycles through recessions and recoveries and put them into historical context.”
https://business.financialpost.com/2014/06/02/tim-hudaks-million-jobs-plan-is-easy-to-achieve/
In the last paragraph Mr. Cross states, “The Million Jobs Plan to rein-in government spending and encourage business investment represents the best chance to revive job growth in Ontario. Cuts to the public sector are not a threat to jobs, but a tonic for reviving economy-wide growth.”
I encourage you to read the entire article and then discuss again with your friends.
Given that the 100K persons relieved of their jobs will now be unemployed and are most likely to lose their homes and most certainly will forced to live in poverty you can also add 3 to 4 times that many people to factor in their spouses and family members. Now for those of you who think this is such a fine idea I suggest you all could offer to take their places. This way you are serving your idea of the greater good and the people can keep their jobs and carry on serving the rest of the people in the Province. It has been noted by many that their are not sufficient employees now to serve all the people who require it. How can eliminating 100k possibly help? Have a look at Steve Paikin’s The Agenda Monday night and see what the panel had to say.
Editor’s note:
Posting these comments does not mean we agree with them. Thought much of this was over the top.
Joan, here is the definition of attrition from Mirriam-Webster On-Line:
“a reduction in the number of employees or participants that occurs when people leave because they resign, retire, etc., and are not replaced”
I think we really have to understand that no one will be handing out pink slips to 100k public sector workers on June 13.
I think this is where Mr. Hudak has not managed the message properly. He has let the opposition and media have a field day and twist the truth to their advantage.
The stated cuts to the workforce will happen over 4 years, largely through contracting out and attrition. That’s only 25,000 per year, where as the actual number of people leaving the public sector workforce each year has been pegged at north of 5%, so that’s twice as many as required to achieve the reduction.
Yes, there will be other jobs outright eliminated. For example he has already committed to cutting the Drive Clean program. I don’t know too many people that would be sorry to see that go away. However, I am sure those people in that program have sufficient transferable skills to apply to their next stage in their working career.
Another way to look at it is that 100K is 1.5% of the 6.9 million strong work force in the province. That is hardly a proportion with catastrophic impact.
You asked how can the elimination of these jobs help? Well, 100,000 people at the average public sector wage of $50,000 per year is $5 billion per year in savings. That does not include benefits and pension plan.
I conclude, and then I’ll leave it to rest, the fear mongering that 100k people will be out of work and begging on the streets unable to feed their family is without warrant.
I will leave you with a link to Andrew Coyne’s piece in the National Post and a couple of quotes from that:
https://fullcomment.nationalpost.com/2014/05/16/andrew-coyne-tim-hudak-hoping-commitment-to-a-plan-can-lead-him-to-power/
“Critics reacted as if Mr. Hudak proposed to fire 100,000 people tomorrow. In fact, much of the reductions would be achieved by contracting out; much of what remained could be achieved through attrition.”
“Whether he cuts the public sector by exactly 100,000, however, or even approximately that amount, is not important. It can be done, certainly: between 2003 and 2011, Ontario’s public-sector payroll, broadly defined, grew by 170,000 jobs, or 17.6%, twice as fast as the province’s population.”
“The clear direction of Mr. Hudak’s policies is to spend less, tax less, borrow less and subsidize less, in all respects the opposite of the course mapped out in this month’s Liberal budget.”
“That is the value of the platform, generally: for the broad direction it indicates, rather than the details of any one proposal. And the direction is exactly what this over-indebted, over-taxed, over-governed province needs. It would cut spending, first — much of it by implementing the recommendations made by the economist Don Drummond in a 2012 report commissioned for the Liberals……”
One thing I found interesting was a comment made by Steve Paikin at the end when he mentioned that if a person didn’t agree with any party, they could decline their vote. Most people don’t know that’s an option.
Tim Hudak clearly won the debate. Did they already legalize marijuana, Pepper?
Oh, that’s nasty.
Play nice.
Nasty? Golly gee. The big Union attack ads, that’s nasty. Big Unions, unaudited, unaccounted for, compulsory membership, compulsory dues, one agenda….Ads full of lies and misdirection, million and millions of dollars spent….that’s nasty.
Another lopsided “opinion”by Rivers. Most reports are that Hudak won the debate. Why not at least start from that point! Anyone that thinks we are better off as a province versus the rest of Canada under the last several years of Liberal rule are fooling themselves. Burlington voters know better and will vote accordingly.
Joe – I agree that Hudak had the smoothest performance of the three – he stayed on message and his message was clear and focused. He was clearly the best debater and would have won the debate had his platform made sense – but it is riddled with errors and inconsistencies that can’t be ignored. I was sure I had included a comment to that effect in my submission.
Thanks for your comment. We may not always agree but i do appreciate your perspective and the effort you make to get your point of view out.
Ray