Politics: Tim Hudak's Plan for Ontario if he becomes Premier

[TOareaFan]

I am willing to stand corrected* but wasn't the budget balanced before the recession? Everyone went into debt during the recession and I understand Ontario isn't getting back to zero as fast as some others but then it would be taking Ottawa a lot longer too if they actually spent a dime on things like housing and transit.

Yes, the budget had a few years of balance/surplus that ended in 2006/2007 fiscal year and yes, one of the advantages that we reaped (provincially and federally) from those years of balance/surplus was that we had paid down a wee bit of debt and left ourselves some fiscal wiggle room to prop up/spur the economy. Ontario far less than the Feds (our debt never really went down significantly).

The deficits run provincially were much higher per capita than they were federally and we we have continued to spend......at this point in the recovery the deficits should not be going up. When the Chretien/Martin Liberals and the Harris/Eves conservatives were telling us that we were close to a debt wall and something had to be done...they weren't kidding....and they took actions to reign in the spending and put us on a more sound footing. If we were worried back then, how worried should we be now that our net debt to gdp ratio is the highest in the province's history? How worried should we be now that while our historic core manufacturing base is eroding we are adding debt faster than the economy is growing (ie. that historically high ratio is only going to get higher)? How worried should we be that in an era of historically low interest rates, we have seen our debt service costs rise to now be tied for our 4th largest provincial expenditure (and it will continue to rise as deficits get added and, inevitably, interest rates rise)?

I am worried about this stuff because as debt rises and interest costs rise your hands get tied and the cuts you have to make become more drastic and less voluntary. The only areas we currently spend more money on than debt service are Health, Education and Children's and Social Services......those seem to be where rising debt service levels will have to erode into and no one seems to want to have the conversation about how we do that.

I do tend to be on the "right side of centre" politically but I also happen to be someone that does not mind paying my share of taxes (obviously I would rather not but I get it that nothing is free) but the insulting thing about the budget that brought this election to us is that taxes went up but so did the elephant in the room - the deficit.

I don't advocate spending like crazy for no purpose and it may even be the public sector has gotten "too big" but I don't think it's entirely clear that we're at that point (nor is it clear Hudak has done any actual analysis of where we can do better. He just wants Harris-style across-the-board cuts, as far as I can see).

Well that is, both, the real shame here and also a bit of an election frustration.

Most of his recommendations (and certainly all of the education spending related ones) he did not have to do any analysis.....it was done for him, paid for by you and I and contained in a report to the current government.....it came from the Drummond Report. The class sizes he is talking about and the changes (not elimination of) to the all day kindergarten program are all what was in that report....and, together, those changes account for about 20% of his suggested annual savings of $2B......he also had his plan vetted/endorsed by what he calls an independent economist who, it turns out, has ties (or has done work for) tea party folks in America. The frustration is that rather an intelligent discourse on the merits (or lack thereof) of Hudak's plans, the Liberal Party has taken to mocking and discrediting this economist rather than address the rather obvious that a significant part of this plan was included in the report from the non-tea party guy (Drummond) that they hired to advise them.....our elections get very frustrating at times.

It is fine for Wynne/Sousa/Murray to say "Hudak's plan to balance the budget is a disaster".....but incumbent in that (and what I want as voter) is to hear what plan eliminates the now bigger budget deficit that is not a disaster.....but it does not seem to come out.

 

[Adjei]

No were weren't he have been in deficit since harris' last year, 2002. McGuinty never ran a surplus.

That's not true, without even goggling I remember McGuinty having surpluses.

 

[TOareaFan]

No were weren't he have been in deficit since harris' last year, 2002. McGuinty never ran a surplus.

True but, to be fair, when elected the Liberals advised us that we were not actually balanced in the last Harris year either....remember the "hidden $5B deficit" that became the reason behind the backing away from the signed promise to not raise taxes and brought us the Health Premium.

 

[TOareaFan]

That's not true, without even goggling I remember McGuinty having surpluses.

The table at the bottom of this page only goes back to 2005/2006 and shows that the debt has been going up every year since then....so any balanced years must have been either 04/05 03/04 or 02/03.....and as I recall it wasn't those first two years because the inhereted/secret/hidden deficit was all the talk and the reason for the health tax.

http://www.ofina.on.ca/borrowing_debt/borrowhistory.htm#debthistory

 

[TJ O'Pootertoot]

Most of his recommendations (and certainly all of the education spending related ones) he did not have to do any analysis.....it was done for him, paid for by you and I and contained in a report to the current government.....it came from the Drummond Report. The class sizes he is talking about and the changes (not elimination of) to the all day kindergarten program are all what was in that report....and, together, those changes account for about 20% of his suggested annual savings of $2B......he also had his plan vetted/endorsed by what he calls an independent economist who, it turns out, has ties (or has done work for) tea party folks in America. The frustration is that rather an intelligent discourse on the merits (or lack thereof) of Hudak's plans, the Liberal Party has taken to mocking and discrediting this economist rather than address the rather obvious that a significant part of this plan was included in the report from the non-tea party guy (Drummond) that they hired to advise them.....our elections get very frustrating at times.

Kim Campbell was famously mocked for saying that election campaigns are not the time to discuss serious issues but since the 1990s it's become increasingly clear how right she was.

I understand the Drummond Report is at the root of Hudak's plan but I think that's been made clear by others more than him. Far be it from me to perform any kind of cogent analysis of that report but it's fair to say the Libs looked at it and made political choices. I wouldn't disagree it's incumbent on Wynne to explain why they did some things and rejected others then, for example, she and Hudak can have (in theory) a substantive debate about full-day kindergarten and the choices made there. But that won't happen. No one is attacking Don Drummond because no one (including Hudak) has really made it about Don Drummond. this isn't economics, it's politics -for better or worse. (And for all his recommendations, I doubt Drummond would stand behind anything as overt and simplistic as firing 100K people in the interest of creating 1 million jobs...)

Hudak lost last time because he was pandering to the centre and wishy-washy. This time he is going all in and while I have zero interest in returning to the divisive and harsh days of the Harris era, I understand what he's doing as a marketing thing. He had to differentiate himself and give people a "real choice" and he's doing that. It makes it easier for me to NOT choose him but for others (especially those who aren't teachers, unionized public servants, firefighters etc.), it will be exactly what they wanted to hear.

[As a side note - per postings made while I was pontificating and philosophizing - Harris never really balanced the budget. He just pulled crap like selling the 407 for $2B to fill a $2B hole for one year.]

Elections are frustrating at pretty much all times now and I yearn for some sort of genuine visionary leader, of any political stripe, who seems to get it. Money is obviously important but I find that most campaigning around tax cuts (e.g. Harris's 30% income tax cut and his sending out of $200 cheques as a reward) is nothing more than vote buying and pandering.

So, this is what we're stuck with; the devil and the deep blue sea.

 

[Adjei]

Ontario's surpluses and deficits dating back to 1986:

http://viableopposition.blogspot.ca/2012/03/ontarios-fiscal-history-it-is-not.html

Am sure those are surpluses that I am seeing those McGuinty's years.

 

[rbt]

Yes, the budget had a few years of balance/surplus that ended in 2006/2007 fiscal year and yes, one of the advantages that we reaped (provincially and federally) from those years of balance/surplus was that we had paid down a wee bit of debt and left ourselves some fiscal wiggle room to prop up/spur the economy. Ontario far less than the Feds (our debt never really went down significantly).

Correct. It's a little small, but here is a chart from TD which goes back to the 80's. Of course, this does not show infrastructure deficit which almost always grows when the fiscal deficit shrinks.

Surpluses were recorded in 2005/2006, 2006/2007, and 2007/2008.


Much more importantly is the debt versus GDP (ability to pay for debt) which was doing just fine until 2008.

 

[Lenser]

Elections are frustrating at pretty much all times now and I yearn for some sort of genuine visionary leader, of any political stripe, who seems to get it. Money is obviously important but I find that most campaigning around tax cuts (e.g. Harris's 30% income tax cut and his sending out of $200 cheques as a reward) is nothing more than vote buying and pandering.

So, this is what we're stuck with; the devil and the deep blue sea.

Couldn't agree more. It's a whole lot of carnival showmanship while the same old shells are merely being shuffled around for the umpteenth time.

 

[TOareaFan]

Kim Campbell was famously mocked for saying that election campaigns are not the time to discuss serious issues but since the 1990s it's become increasingly clear how right she was.

yes she did say that.

I understand the Drummond Report is at the root of Hudak's plan but I think that's been made clear by others more than him. Far be it from me to perform any kind of cogent analysis of that report but it's fair to say the Libs looked at it and made political choices.

I don't think it should be about Drummond, I only brought his name in because you (and not just you but I was responding to your post ) said it was unclear that Hudak had done any analysis and was pointing out that the work (or at least a substantive part of the work) had already been done by someone we hired.

I wouldn't disagree it's incumbent on Wynne to explain why they did some things and rejected others then, for example, she and Hudak can have (in theory) a substantive debate about full-day kindergarten and the choices made there. But that won't happen. No one is attacking Don Drummond because no one (including Hudak) has really made it about Don Drummond. this isn't economics, it's politics -for better or worse. (And for all his recommendations, I doubt Drummond would stand behind anything as overt and simplistic as firing 100K people in the interest of creating 1 million jobs...)

I am, frankly, not interested in why McGuinty/Wynne chose to ignore the bulk (all?) of the restraint recommendations in the Drummond report......as a voter I know the record and what I want to hear is how they get us back to balance. So far all I have heard them say is "we will" but not how they will.

Hudak lost last time because he was pandering to the centre and wishy-washy. This time he is going all in and while I have zero interest in returning to the divisive and harsh days of the Harris era, I understand what he's doing as a marketing thing. He had to differentiate himself and give people a "real choice" and he's doing that. It makes it easier for me to NOT choose him but for others (especially those who aren't teachers, unionized public servants, firefighters etc.), it will be exactly what they wanted to hear.

When I talk/chat with people I really like to hear the "why's"......if you would be interested in sharing (and I understand if you don't want to but I have to ask) why you would not choose Hudak....is it because you don't agree that deficit and debt are important issues? Is it because you don't like his proposed way to balance the budget? Is it because you think someone else has a better plan to balance the budget?

This election I am particularly interested because, frankly, I am looking for a reason to vote Liberal......I like the transit plans unveiled (albeit hurriedly) by Murray and transit is one of my "key" issues....but fiscal matters are the other big thing for me and am disappointed in them in that regard.

 

[Electrify]

I suppose increasing taxes more so while keeping and even increasing services isn't a popular option?

If I want to see how low taxes (and services) could go, I'd move to Somalia. Guess I should brush up on my Swedish and see if I can get into Sweden as a refugee of Hudak :-\

 

[TOareaFan]

I suppose increasing taxes more so while keeping and even increasing services isn't a popular option?

before I answer.....is there a deficit redcution in there? In other words, are the increasing taxes just going to increasing services or are the taxes increased to level that allows, both, a deficit free budget and an increase in services?

If I want to see how low taxes (and services) could go, I'd move to Somalia. Guess I should brush up on my Swedish and see if I can get into Sweden as a refugee of Hudak :-\

With the greatest of respect, that is the sort of argument that gets good discussions sidetracked in partisan mudslinging.....what has Somalia got to do with this discussion....no one is suggesting a modeling proxy for the Ontario economy/government.

 

[rbt]

I suppose increasing taxes more so while keeping and even increasing services isn't a popular option?

Afraid not. Ontario has both the lowest revenues and expenditures per capita out of all Canadian provinces.

Boosting our revenue per capita to the same levels as BC (so we're tied for lowest) would take about $3B off the deficit. If we targeted the average for Canada we would have a balanced budget today.

Being efficient is good, and I don't doubt we can make improvements here. Dumping raw sewage into the Ottawa river because we're not willing to find $35M isn't helping anybody. I'm not sure why it is difficult to both be efficient in our spending AND continue to spend on improving our surroundings. It seems to be all or nothing.

 

[TJ O'Pootertoot]

When I talk/chat with people I really like to hear the "why's"......if you would be interested in sharing (and I understand if you don't want to but I have to ask) why you would not choose Hudak....is it because you don't agree that deficit and debt are important issues? Is it because you don't like his proposed way to balance the budget? Is it because you think someone else has a better plan to balance the budget?

This election I am particularly interested because, frankly, I am looking for a reason to vote Liberal......I like the transit plans unveiled (albeit hurriedly) by Murray and transit is one of my "key" issues....but fiscal matters are the other big thing for me and am disappointed in them in that regard.

I don't mind answering I guess my short answer is that, like you, transit is my main issue, at least right now; that and "planning" more generally. On those two issues (putting everything else aside) the Liberals have been a Godsend. When it comes to "dealing with gridlock" and "curbing sprawl," I think it's a no contest.

Now, of course, reality requires one look at a broader range of issues. Fiscally, as I said, I don't pretend to understand the vaguaries of balancing a multi-billion dollar budget and I don't really think most politicians do either, fwiw. To the extent these issues overlap, I think Hudak's plan for funding transit expansion is a pipe dream, Horwath's is hugely disappointing (at best) and Wynne's is the closest to grasping reality (though I happily conceded that a) it falls short of what two expert studies recommended and b) those studies recommended MORE spending).

Anyway, like many here, I lived through the Harris era and my feelings about that are that his financial gains were negligible (and helped by him riding an economic boom, following the recession the NDP had to confront) and the atmosphere in Ontario was very antagonistic and difficult. That's putting aside more direct and obvious fallout like the Eglinton subway and Walkerton. You can't keep blaming a 20-year-old government for everything but he did damage from which we are still recovering (again, look at Eglinton).

Hudak, understandably, is aligning himself with that after years of pretending he wasn't really that guy. I look at his urban white paper and see a lot of BS. And as I've said elsewhere, I also see him - a member of the cabinet that did it - having the nerve to refer to the Sheppard subway as a "stump." So, for all those reasons I could never vote for him. He may have people explaining to him to balance the budget but I don't see real understanding of what is going on in the GTA and how it relates to Ontario. I tend to vote strategically so if I had more options in my riding I might not vote Liberal after all that's gone on but in a first-past-the-post system, you have to pick your battles. That's kind of my 2 cents.

 

[gweed123]

I suppose increasing taxes more so while keeping and even increasing services isn't a popular option?

If I want to see how low taxes (and services) could go, I'd move to Somalia. Guess I should brush up on my Swedish and see if I can get into Sweden as a refugee of Hudak :-\

Personally, what I'd like to see is one-to-one spending cuts with revenue increases. Cut by $1, raise an extra $1, and you're $2 closer to eliminating the deficit. I do believe that there is waste, but there isn't enough to balance the budget just with cuts. Nor is the answer just increase revenues. It needs to be a combination of both. The spending cuts will satisfy the conservative side of the spectrum and hopefully warm them up a bit to the idea of a tax increase, and the tax increase will soften the otherwise required heavy blow of big service cuts.

 

[MisterF]

Are you talking about the income that people pay on the public sector wages that Hudak is proposing to cut? So if we have employee "a" and they earn $99k (we'll keep them off the sunshine list ) and pay $10k in provincial income tax (likely not that much)......do you not agree that (in isolation) there is around a $90k savings to the provincial treasury if that job is phased out?

No, by income I mean tax revenue. As in reducing corporate taxes by 30% needlessly reduces the province's income and manufactures a revenue crisis. I'm not going to get into a list of cuts I may or may not find acceptable.

That's not true, without even goggling I remember McGuinty having surpluses.

Yup, he ran a surplus for 3 years and had to fix the deficit that the Conservatives left in 2003. The deficits started again when the economy crashed in 2008.