Dear Ontario citizens,
We need to talk.
Sorry if that sounds a bit ominous, but the truth is we have a budget problem.
And it's going to get worse if we don't do something it.
Did you know that the fastest growing line item in the Ontario Liberal budget is interest payments on debt?
At $11.5 billion, interest on debt is the fourth biggest spending category in the Liberal budget.
This might be good for bankers and bondholders -- the kind of folks who like to donate to the Liberal party. But it's not good for you. It's not good for most people in Ontario.
I want to invest that $11.5 billion in things that will make your life better.
$11.5 billion could save many of the 100s of schools in our communities the Liberals want to close.
$11.5 billion would be more than enough to increase rates for people on Ontario Works and Ontario Disability Support Payments so they would have hope for modest shelter and food.
$11.5 billion could pay for 40,000 PSWs, 20,000 nurses, and 10,000 doctors with spare change to invest in new Pharmacare coverage.
Imagine how many more new hospital beds or home care services could be added if interest payments were not growing so much.
But we aren't in a position to make those investments because interest payments will grow at an annual average of 3.8 per cent.
Here's the bottom line: if we don't get debt under control, interest payments will crowd out spending on other essential services. In fact, they already are.
By comparison, health care's much needed and publicized "booster shot" will increase funding by an annual average of 3.3 per cent -- less than the growth of interest payments. Education only receives a slightly above inflation average increase of 2.8 per cent.
No matter how hard politicians try, magic money and fairy dust won't pay for programs or buy much needed infrastructure.
We have to do something about this even if the politicians at Queen's Park want to ignore it. While the PCs quibble with the Liberals over whether the budget is actually balanced and the NDP argues over who has the better Pharmacare program, no one wants to have an honest conversation about paying for the things we need.
If we're going to get debt and interest payments under control, we need to have an honest conversation about how much things cost and how we're going to pay for them.
The Liberals could certainly save us money if they would avoid wasteful scandals such as eHealth, ORNGE, and gas plants. Treasury Board Secretary Liz Sandals needs to stop handing out unsustainable pay raises to millionaire CEOs. And let's not forget that the Premier's Hydro band-aid is costing over $2 billion per year.
So yes, there are opportunities for savings.
But we also have to look at revenue. No matter how hard politicians try, magic money and fairy dust won't pay for programs or buy much needed infrastructure. Some economists estimate that Ontario has $19 billion less revenue each year as a result of the Mike Harris tax cuts in the 1990s.
The good news is that there is low hanging fruit that can help us generate money. The even better news is that the revenue can be generated without the burden placed on individuals already struggling with affordability.
Here's a good place start raising revenue:
Stop giving away our natural resources.
Ontario should charge royalty rates and water taking fees that recover costs for environmental protections and programs. With climate change happening, it's time to get this formula right Instead of cutting back on environmental protections.
Have drivers on the most crowded highways pay a fare to use the road.
Just like transit users pay a share of the costs to move them around, dynamic road pricing or congestion charges in the GTA will raise much needed revenue to pay for infrastructure -- including roads. Road pricing has the added benefit of using market mechanisms to allocate road space more efficiently.
Save billions by moving to one school system.
Right now, we fund both Catholic and Public school boards. Wasteful administrative duplication in our separate school boards costs billions, even while we face closing schools.
Stop the privatization of Hydro One.
Ontario's Financial Accountability Officer has called it a money loser. Ontario can't afford another money losing short-sighted Liberal revenue scheme.
Close tax loopholes and raise corporate tax rates on big business.
Ontario has one of the lowest corporate tax rates in North America. A small increase could help us lower small business taxes and raise revenue while maintaining an overall competitive tax rate.
There is no question we need to invest in social housing, operational support for transit, children's mental health, environmental protections, poverty reduction and a host of other needs.
But we have to be honest about Ontario's budget problem if we are going to deliver a better Ontario today and tomorrow. The Ontario government can deliver better services for people if the Liberals stop paying $11.5 billion each year to bankers for interest on debt. You deserve better.
Regards,
Mike Schreiner
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