Grab an axe, Doug Ford, hack away at spending

How conservative is the Ontario government? Not very, according to its fiscal plan. Program spending, including reserves, is projected to be 18.3 per cent of GDP in 202223, which means that even after COVID, spending- toGDP will be a full percentage point higher than when the Liberals left office in 2018, higher even than when Liberal spending peaked at 17.9 per cent of GDP in 2009-10. And it will absolutely dwarf the 13.1 per cent spendingto- GDP ratio of 2002- 03, before the Liberals took power and began shovelling money out every door they could find.

The Ontario Progressive Conservatives campaigned in the past election promising to end the Liberals’ “party with taxpayers’ money,” so they may not want to become known as the government that outspent even the Liberals. To help them avoid this unfortunate outcome, I would like to provide some helpful suggestions as to how they can cut spending down to a more reasonable level and ensure that none of the COVID spending increase becomes permanent.

First, they clearly need to make more than just a few tiny cuts. A scalpel won’t do it — they need to take a pickaxe, hatchet, or some other large, sharp instrument to the budget to hack off entire departments and programs. This is not a far-fetched idea: Just six years ago, then P.C. leader Tim Hudak proposed to eliminate 100,000 government jobs, reduce the number of ministries, and cut the cabinet from 27 members to 16. Those were perfectly sensible proposals in 2014 and they remain so today.

The current cabinet consists of 25 people, plus another five associate ministers, so there is ample room to reduce the number of ministers and eliminate some ministries altogether. The first ministries to go should be those that do not correct market failures or alleviate poverty but instead exist to redistribute resources among industries or regulate commerce in hopes of benefiting one side of an economic transaction at the expense of the other. The invariable result of such actions is to retard economic growth while producing little or no compensating benefit.

The best example is the Ministry of Economic Development, Job Creation and Trade, which is budgeted to spend $ 719 million this year. Bring it down to $ 0. Similarly, other ministries, including but not limited to: Heritage, Sport, Tourism and Culture ($ 1.5 billion), Labour, Training and Skills Development ($ 1.3 billion), Agriculture, Food and Rural Affairs ($ 870 million), and Indigenous Affairs ($96 million), can go as well, with the few legitimate functions they may perform — such as those related to environmental protection — consolidated into other ministries.

Ontario’s universities and colleges ($ 10.7 billion) are also ripe for cuts. Corporate welfare is clearly deleterious, but is there any material difference between forcing Smith to pay for Jones’s factory equipment and forcing Smith to pay for Jones’s university degree? In both cases, Jones is making the investment and will receive the benefits so Jones should also pay the costs. If the investment is worthwhile but Jones doesn’t have the available funds, he would be able to raise or borrow the amount. If there’s no reason for taxpayers to subsidize private investments in physical capital why should they have to pay big subsidies to investment in human capital?

The most expensive line item in the provincial budget is health care ($60.1 billion), where savings can also be found. At the moment, the government monopolizes and rations medical care, not allowing doctors and patients to privately transact for mutual benefit. So instead of private transactions we have: underpaid doctors; long queues for medical procedures; large numbers of patients without doctors and smaller but significant numbers of doctors without jobs; sizable funds diverted to bureaucracy or to achieve regulatory compliance; and taxpayers paying too much.

The government needs to allow more private-sector involvement and competition in health care, which would allow private spending to displace government spending and force at least some market discipline onto inefficient, government-run, monopoly institutions. Education ($ 32.7 billion) also suffers from a lack of choice and private- sector competition, handing a near- monopoly to the strike-happy teachers’ unions and allowing them to drive up costs even as the quality of education languishes.

Wherever you look in the Ontario budget, spending can and should be cut. If Doug Ford doesn’t want to be known as the premier who outspent the Liberal governments of Dalton McGuinty and Kathleen Wynne, he should grab an axe and start hacking away at expenditure.

WHEREVER YOU LOOK IN THE ONTARIO BUDGET, SPENDING CAN AND SHOULD BE CUT.