The misleading deficit

The list of knowledgeable people who agree the Ford government is overstating the size of the provincial deficit is growing.

The latest to join that chorus is Ontario’s financial accountability officer, Peter Weltman. His fall report, released on Monday, says the Progressive Conservative government is underestimating tax revenues and the deficit is actually $1.2 billion lower than the government claims.

Before Weltman came Cindy Veinot. She was Ontario’s chief accountant until she resigned this fall in protest over the government’s decision to inflate the deficit by $5 billion through questionable accounting of public sector pension assets. Even Ford’s own financial commission of inquiry concluded in September that the province needed to account for pension assets differently.

Factor in Ontario’s $1-billion reserve fund, which Finance Minister Vic Fedeli does not, and the deficit declines further. Indeed, all that combined has the state of Ontario’s books looking a lot more like the last Liberal government’s projection of a $6.7-billion deficit than Fedeli’s current claim that the province is $14.5 billion in the hole.

Governments, especially ones that have promised to balance the books, have been known to use creative accounting to make the books look better than they are, but the Ford government has taken the opposite tack — and for troubling reasons.

It isn’t just inflating numbers to claim victory more easily later on; it’s setting the stage for cuts to government services and programs that people in this province rely on. As Fedeli said, right after he first inflated the deficit: “The hole is deep and it will require everyone to make sacrifices without exception.”

But if the deficit figure is a fabrication, so is the Ford government’s justification for the cuts to come.