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McGuinty's credibility at stake

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Nov. 25, 2003. 01:00 AM
McGuinty's credibility at stake
Voters tolerant at first but not forever

THOMAS WALKOM

Dalton McGuinty's chickens are coming home to roost. The new Ontario premier made many promises during last month's election campaign. He is now engaged in the unenviable process of breaking — or at least bending — some of the more significant ones

McGuinty said during the campaign he wouldn't raise taxes. As one of his more memorable ads put it: A Liberal government wouldn't lower taxes but it wouldn't raise them either.

Later, he modified this to say he wouldn't raise taxes for families.

Yesterday in the Legislature, in its first full working day since the Oct. 2 election, Finance Minister Greg Sorbara announced $2.7 billion in new tax hikes. Corporate taxes are being raised. So are taxes paid by farmer, loggers and miners. Smokers will pay an extra $2.50 a carton.

Presumably, those who smoke or farm don't have families. Nor, if one follows the Premier's logic, do they invest, or have their pension funds invested in, corporate shares.

He justified his tax increases to reporters by explaining that everyone knew he would raise these particular levies if he won.

In one sense, he is right. When pressed during the campaign, the Liberals would indeed admit they were planning to raise some taxes. But then, they would immediately revert to the no-tax-hike mantra. Voters may be excused for being confused.

On private versus public medicine, there is equal confusion.

During the campaign, McGuinty attacked the governing Tories for promoting P3s, or private-public partnerships, to build and operate hospitals.

The Tories planned to let a private consortium finance and build two new sites, one in Brampton and one in Ottawa. The consortia would lease these buildings to public hospitals but would operate so-called ancillary services such as laundry and cleaning. Under the Tory plan, medical procedures were to be left under public control.

After some time (28 years for Brampton, 20 years for Ottawa), the buildings were to revert to the public — in effect a lease-to-own deal. The Tory rationale was that government could not afford the roughly $450 million (now estimated at $550 million) needed to reconstruct these two hospitals.

At the time, McGuinty and his Liberals rejected this argument. They referred to research from Roy Romanow's royal commission on health that said P3 hospitals may seem like a bargain initially but end up costing taxpayers more in the long run.

The reason? Both private and public firms have to borrow money to finance hospital construction. But private firms pay higher interest rates when they borrow and jack up the "rent" they charge government accordingly.

One consultant estimated the two P3 hospitals would end up costing 12 per cent more than if they had been financed publicly.

During the election campaign, McGuinty seemed to buy this argument. True, he did not promise to cancel the two P3 contracts outright. He said resultant lawsuits might cost the government too much.

But when he attacked the Tories for what he called the Americanization of health care, voters assumed he would do something significant.

In the end, McGuinty did little. Health Minister George Smitherman confirmed in an interview yesterday that the P3 deals for Brampton and Ottawa are essentially going ahead as the Tories planned.

A private consortium will still raise the money to finance and build the two hospitals. The consortium will still operate ancillary services, while leaving medical services to public authorities.

The public will still make regular payments over 20 to 28 years to the consortium to cover its costs and profits. And total costs to the public will presumably still be higher than if the hospitals had been government-financed.

The only difference — seen as key by Smitherman — is that the buildings will be owned by the public hospitals from the outset.

Smitherman compares it to making mortgage payments rather than lease payments. He insists that McGuinty is keeping his campaign promise to put the P3 hospitals under public ownership as quickly as possible.

And in a technical sense he is correct. If one parsed McGuinty's words carefully in the campaign, that is all he promised — if not all that he implied.

The moral of the story, perhaps, is that voters should pay more attention to the fine print when politicians make promises.

On it goes. McGuinty made a firm promise to cancel housing construction on the Oak Ridges Moraine. On Friday, he backed away ignominiously, instead settling for a land swap deal with developers, the shape and scope of which is, according to Municipal Affairs Minister John Gerretsen, still largely undetermined.

Those who keep track of such things calculate that the McGuinty Liberals have broken or bent five promises in six days — including the pledge to balance the books this year and another to keep electricity rates frozen for three years.

The Liberals say they have no choice given the surprise $5.6 billion deficit they found after taking power. Critics point out this should have been no surprise.

New Democratic Party Leader Howard Hampton is happy to show off a copy of Hansard from the legislature's estimates committee of last June 3 — well before the election — in which Gerry Phillips (then Liberal finance critic, now McGuinty's management board chairman) predicted the provincial deficit this year would stand at about $5 billion.

For a while, Ontarians will cut their new premier a good deal of slack. That is the voters' nature. In the beginning, they are remarkably tolerant.

But over the long haul, the new government is risking much. Credibility is easily squandered. It is not easily regained. Too many more bent promises and the new premier will be seen as just another politician. Too many more broken promises and he will start to make Mike Harris look good.

Additional articles by Thomas Walkom

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It sounds like McGuinty is dealing with years of Tory control right now, and will focus on more Liberal stances to new issues that arise.

Not like you can automatically change things right off the bat.
 
Promises, promises


UPDATED AT 10:08 AM EST &nbsp &nbsp &nbsp &nbsp Thursday, Nov. 27, 2003

Advertisement

One Toronto tabloid called them "Fiberals," short for Fibbing Liberals. No wonder. Since taking office Oct. 23, the Liberal government of Ontario Premier Dalton McGuinty has been breaking promises faster than plates at a Greek dinner.

During the election campaign, Mr. McGuinty said he would balance the budget this year. Now, it seems he won't. He said he would keep a cap on electricity rates. Now rates are going up. He said he would cancel a housing development on the sensitive Oak Ridges Moraine north of Toronto. The development is going ahead. He said he would stop private-public consortiums from building two new hospitals. The projects will proceed, under terms more or less unchanged from those negotiated by the old, Conservative government.

Mr. McGuinty has good, sensible reasons for all these reversals. The $5.6-billion deficit bequeathed to him by the Tories makes it hard to balance the books or keep the costly electricity cap, which was an awful idea in the first place. Cancelling the Oak Ridges and hospital projects would have cost taxpayers a fortune.

But Mr. McGuinty knew all this well before the election. He knew there was a big deficit coming. He himself constantly attacked the Tories for concealing it. He knew the electricity cap was dumb and probably unaffordable, which is why he condemned the idea when the Tories first came up with it. He knew cancelling Oak Ridges and hospital projects would cost millions, because the developers would sue if he did.

He knew all this. He went on making his promises anyway, knowing full well he would not be able to keep them. That was dishonest. It is a good thing for Ontario that Mr. McGuinty is not carrying through with unrealistic promises. But if they were unrealistic, he never should have made them in the first place.


© 2003 Bell Globemedia Interactive Inc. All Rights Reserved.
 
Just how did Mr. Guinty knows that we have a $5B deficit, and that the terms of the ministeral order by Chris Hodgson on the Oak Ridges Moraine development is iron clad? Did Ernie and Company announce that in public, before and during the election?

GB
 
November 26, 2003
Volume 11 - Issue 1

McGuinty 'Blame-Game' Deficit a Tired Excuse to Break Election Promises
Provincial SURPLUS Could Reach $3.9 Billion – IT CAN BE DONE!

Today, Conservative Leader Ernie Eves and Finance Critic John Baird unveiled the truth behind Dalton McGuinty’s ‘blame-game’ deficit. Based on the Balanced Budget plan of the previous Eves government and the $3.8-billion of in-year savings outlined in the Liberal financial plan, Ontarians can expect as much as a $3.9-billion surplus when the Provinces books are closed on March 31.



“In light of the Premier’s failure to accept his responsibility to prudently manage the provinces finances, we have gone to great lengths to develop a plan that will ensure the taxpayers of Ontario are protected and that the books are balanced this year,†said Eves. “We have looked at the information presented in the recent fiscal review as well as the private sector outlook for the next five months, and the message is clear – Ontario’s budget can be balanced if the Liberals have the political will to make some tough decisions.â€



The details of the Conservative plan are outlined in a 9-page report that includes in-year savings measures, money owed from the federal government, the prudent sale of surplus provincial assets and the acknowledgement that a portion of the Liberal ‘blame-game’ deficit is based on nothing more than creative accounting.



“In last week’s Speech from the Throne, Mr. McGuinty quipped that ‘this isn’t the job that he signed up for’. Well, I have some news for the Premier – being the government means taking responsibility and protecting the interests of Ontarians at all costs,†stated John Baird. “The notion that balancing the budget is hard work should be no surprise to anyone, especially to the Premier and the Minister of Finance. I find their lack of dedication to balancing the budget not only distressing, but frankly, embarrassing.â€



According to the report released today, the Liberal government can deliver more than a $3-billion surplus without sacrificing jobs and the Ontario economy with their planned tax hike. On Monday, the Minister of Finance tabled legislation that will inflict the largest single tax hike in the history of the province on the taxpayers of Ontario.



“The Liberals think that tax hikes will prevent them from having to make tough decisions,†said Baird. “The reality is, they will only drive jobs out of Ontario and stunt the growth of the economy. We need only to look at the legacies of Bob Rae and David Peterson to prove that.â€



The PC Party is calling upon the Liberal government to roll-up their sleeves and get to work at balancing the budget by acting responsibly and in the best interests of all Ontarians.



“The time for pointing fingers is over. The Premier and the Minister of Finance need to put the cynicism and the excuses aside and start working on behalf of Ontarians,†said Eves. “Two months of doing nothing is unacceptable. The people of Ontario want a balanced budge now – IT CAN BE DONE.â€



Read more online at www.OntarioPC.com
 
fight the deficit early and aggressively. Might as well do it now than waiting for it to blow up in their faces 4-5 years later in the next election
 
I won't fault Dalton if we have a billion or two deficit this year. The Tories saw that the end was nigh and did all they could to saboutage the books. The Tories are being quite hypocritical now, saying "IT CAN BE DONE". Their solution is mysterious "end-of-year savings" and a huge sale of assets (which DOES NOT reduce the deficit) which most likely would have had to include the sale of some very important assets, possibly the LCBO (and selling the LCBO would be moronic).

I'm so happy the Tories are out. Their "privatise now and worry about the cost later" ideology was horrendously destructive. The 407, Hydro, the two PPP hospitals, etc... all these have only cost government more than if they had remained in public hands. Hey, maybe privatisation isn't the answer to everything?
 

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