Endgame for Ontario’s Liberals
Iam reluctant to declare a politician “dead person walking” because elections can produce startling results, as Ontarians know only too well. Nevertheless, there are times when the portents are so ominous it becomes a virtual certainty, absent a black swan event. That is Premier Kathleen Wynne’s doleful plight, with a pitiful 11 per cent approval rating and polls indicating the Liberals would lose official party status.
So it is looking like endgame, with the government’s mission reduced to saving the furniture. Indeed, its only faint hope is to find a new leader and fast. No less loyal a Liberal stalwart than Greg Sorbara, former finance minister, party president and campaign chair, recommended Wynne step down. However, she seems determined to hang on, so it could get ugly. Yet even with a new premier claiming to lead a transformed and contrite party that disavows the more egregious mistakes of his or her predecessor, survival is likely a bridge too far.
How did it get this bad? Set aside, if you can, the political scandals, broken promises and rank incompetence. The single issue that most enrages and worries voters is the doubling of hydro bills. Mind you, the electricity catastrophe is only the most blatant of the fiscal excesses that made Ontario the world’s largest sub- national debtor. That dubious distinction resulted in credit downgrades, vulnerability to shocks like an inevitable economic downturn, annual interest obligations totalling $ 11 billion, funds diverted from healthcare, education and low-income housing and an oppressive debt load foisted on future generations.
On Thursday, Finance Minister Charles Sousa will boast that Ontario’s budget is balanced, a dubious claim challenged by the auditor general and the Financial Accountability Office (FAO). In any event, and contrary to what most people understandably believe, a balanced budget does not preclude massively ballooning debt. Government accounting rules permit the province to amortize the cost of longterm assets, so only a small portion is recorded as an expense in any given fiscal year. However, the bill must be paid when the asset is purchased or the project built. The FAO projects that, over the next five years, net debt will increase by $64 billion, totalling a staggering $370 billion by 2020-21. The minister will not be boasting about that.
The question is superfluous, but I have to ask it anyway. Does the Ontario Liberal government have no shame? Wynne had the gall to pretend that intergenera- tional fairness justified subsidizing hydro users by adding $ 25 billion in interest payments down the road. Most people consider it terribly unfair to saddle children and grandchildren with debt. But not our premier.
Her deceptive cover is that the disastrous Green Energy Act creates longterm value, when in fact it will extend no benefits, environmental or other, now or later. Furthermore, ongoing maintenance is a large part of a project’s total cost. More i mportantly, she is implying that when our sons and daughters become adults and invest in new infrastructure, the bill will be passed on to their kids, thereby perpetuating unfairness for generations to come. How sad is that? Mom and Dad want to bequeath prosperity to their children, rather than impose crushing indebtedness. That parental impulse is not only compassionate; it is integral to societal progress.
While appealing to selfishness, the government claims it is taking the moral high ground for the dishonourable act of having our kids pay for its profligacy. In the panoply of legerdemain, that merits a prize for chutzpah.
Granted, the Liberals are not looking to me for policy advice. Still, the sooner Ontario’s economic malaise is addressed the better for Ontarians and indeed all Canadians. So here are a few pre- budget suggestions to deal with some pressing issues. Ontarians have to start living within their means, enhance their competitiveness and take practical actions to encourage growth and employment, especially in depressed regions. Individuals and job- creating businesses are being crushed by taxes, fees and regulations. Relief is urgently needed. Government should get rid of impractical, ideologically driven policies, like the despised energy boondoggle that benefits a few companies and many Americans at the expense of Ontarians. The useless and harmful cap- and- trade scheme should be converted into a tax reduction plan, then cancelled as soon as possible. Finally, last week’s politically motivated rent-control plan is a sure- fire fiasco that will freeze the supply of purpose- built rental accommodation and reduce rental condo units owned by investors. Unfortunately, no political party will revoke it for fear of alienating the very people whom it will hurt, but not today.
Ontario can resume its proud role in Confederation as a “have” province that contributes to national prosperity. However, barring a Liberal transmogrification, Ontarians will have to await a change of government. Less than 14 months and counting.