Ontario government seems to ignore obvious link between debt and economic growth

By -

Ida, one of the most complete primate fossils ever found, is considered to be a 47-million-year-old human ancestor "missing link". Photograph: Atlantic Productions Ltd

Staring down the barrel of a forecasted $30.2 billion deficit and a $411.4 billion debt Ontario’s economic future is at stake. Many expected more than deferred spending, voluntary wage freezes and pension tweaks from the province’s touted belt-tightening budget.

This 2012-13 budget misses the mark. It does not address Ontario’s jobs and spending crisis, leaving many to ask, “Where’s the austerity?”
The government’s Don Drummond report rendered 362 recommendations. We expected this to be a “Drummond-inspired” budget – one that dug deep to find savings. Instead, of a planned budget to haul us out of the debt hole, it looks like this government will keep digging.

While the public sector wage freeze is reduced to little more than a talking point, I find it sad that social assistance recipients have their benefits frozen. As well, increases to the child care benefit have been delayed. It is obviously easier for this government to pick the low-hanging fruit.
A $30.2 billion deficit and $411.4 billion debt are the outcomes Don Drummond tells us to expect in fiscal year 2017-18. Higher debt begets a slower economy, meaning even further job loss. At 600,000 jobs lost under McGuinty’s watch and 500,000 still unemployed, we must take measures – significant measures – to stem the bleeding.

What this government seems to ignore is the obvious link between debt and economic growth. Businesses know that governments with high debt loads cannot afford to lower taxes or to fund infrastructure – two basic attractions for investment and job creation. To disregard these realities sends a clear signal to job creators and credit agencies that Ontario can’t afford the things that make us an attractive place for business to invest.
Bottom line – get your house in order and the investment in jobs will follow. Unfortunately this house, our house, is in complete disarray, as spending grows unsustainably with borrowed money.

The fact is, despite McGuinty claims to the contrary, the root cause of our problem – spending – continues to skyrocket. In fact, spending is up $2 billion – not down – in the 2012-2013 budget. Individual budgets have increased in fully 14 of 24 Ministries representing fully 82 per cent of the budget. Of all years, this was one where the Premier should have said “No”.

In 2010-11 the deficit was $14 billion. The deficit for 2011-12 is projected to be $15.3 billion, and $15.2 billion for 2012-13.
To put the McGuinty spending addiction in perspective, consider that government continues its trademark spending binge at a pace of $1.8 million an hour more than it takes in. That comes in a $30,000 a minute – more than many make in a year.

Without proper spending restraints, this government can no longer afford to put money towards things that we all need to succeed, such as: good schools; excellent, accessible health care; prosperous, welcoming, safe and diverse communities and world-beating infrastructure. There is no doubt we can have these things once again, and we can make Ontario a world-class leader; however, at this point in time Mr. McGuinty has no political will to make tough decisions.

We are not at the level of Greece yet, but Mr. McGuinty has chosen to do little to clean up the mess he has gotten us into.

Supplemental- Ida the missing link primate fossil Podcast James Randerson on Ida

by MPP Toby Barrett Haldimand-Norfolk
www.tobybarrett.com

 

1 Comment to Ontario government seems to ignore obvious link between debt and economic growth

Leave a Reply

Your email address will not be published.