Gloom — or doom.
That’s the outlook for Ontario, according to a sweeping review of public services urging higher hydro bills, larger school classes, a streamlined health-care system that could lead to fewer hospitals, more expensive tuition and increased user fees.
Don Drummond, chair of the commission on public-service reform, on Wednesday delivered the roadmap for Ontario’s daunting journey.
It came in the form of a two-volume, 668-page report so weighty that a table collapsed when Ontario Provincial Police officers unloaded embargoed copies in the media lock-up.
“Ontario faces more severe economic and fiscal challenges than Ontarians realize,” said Drummond, a former TD Bank chief economist, warning the deficit would balloon from $16 billion this year to $30.2 billion by 2017-18 unless the hemorrhaging is stanched.
“Our message will strike many as profoundly gloomy. It is one that Ontarians have not heard, certainly not in the recent election campaign, but one this commission believes it must deliver,” he said, castigating all the major political parties for saying they could balance the books within five years relatively painlessly.
Finance Minister Dwight Duncan said the only one of Drummond’s 362 cost-cutting recommendations the government rejects outright was scrapping full-day kindergarten — everything else is “part of the mix.”
While Duncan said taxes wouldn’t be hiked — a planned cut in corporate taxation rates from 11.5 per cent to 10 per cent does appear doomed — he did not rule out asset sales even though the commission cautioned against them.
“I didn’t say those other things are out of the question — I’m the finance minister, we’re the government,” he said.
Many of Drummond’s recommendations would be politically difficult to enact — especially for a minority government re-elected on sunny promises less than five months ago.
As first disclosed by the Star, overall increases must be capped at 0.8 per cent per year through 2017-18.
Health-care spending, up an average of 6.3 per cent annually over the past five years, must be held to 2.5 per cent growth — though Drummond admitted “not one jurisdiction in the world” over the past 30 years has managed to keep costs to that annual rate.
Primary and secondary education budgets can rise only 1 per cent with colleges and universities going up 1.5 per cent and social programs just 0.5 per cent.
Everything else the government funds must be reduced by 2.4 per cent per year.
“Reform must be pervasive and speedy. The government will need to implement all the reforms we recommend … to restrain the growth of program spending enough to achieve balance by 2017-18,” he said.
With 105 recommendations on health alone, there is much for Premier Dalton McGuinty’s Liberals to digest.
Senior officials confided much of Drummond’s report would be taken under advisement, noting some of its tenets will be introduced in Duncan’s budget next month or are already under way with Health Minister Deb Matthews’ reforms announced two weeks ago.
But Liberal insiders told the Star the report presents a “worst-case scenario” that could give the government political cover when less dramatic cuts are made later this year.
That is not what Drummond wanted to hear.
“This is not a smorgasbord from which the government can choose only the tastiest morsels and ignore the less palatable,” he said.
“We can all agree that change is disruptive, but the medicine does not go down more easily if it is dragged out over a long period.”
Although Drummond was not allowed to consider tax hikes, he said he “cheated a bit” and found $2 billion in “enhanced revenues” though higher fees and better collection of monies owed the province.
But the lion’s share of the savings he identified came from cutting some of the Liberal government’s most treasured achievements:
• Scrapping or revamping full-day kindergarten;
• Raising the 20-student class-size cap in junior grades to 23 children and increasing the average in junior grades from 24.5 to 26 students and from 22 to 24 in secondary school;
• Ending the Ontario “clean air benefit,” the 10 per cent rebate to electricity bills that costs the treasury $1 billion a year;
• Cancelling the new 30 per cent Ontario tuition grant for college and university undergraduate students unless the overall post-secondary budget can be kept to a 1.5 per cent rise;
• Extending the period that municipal social service costs will be uploaded back to Queen’s Park by two years to 2020;
Increasing more than 400 user fees, such as driver’s licences, to reflect “full cost recovery,” which would bring in $500 million a year and indexing such fees to rise with inflation, eventually generating an $227 million annually.
As well, Drummond said Ontario’s 14 local health integration networks (LHINs) should be in charge of all 2,500 separately funded health agencies, including the province’s 151 hospital corporations, which would lead to amalgamation of some hospitals.
But he urged against “across-the-board cuts,” wage freezes or targets for civil-service job reduction, though he implored the government to be creative.
“Do not hang on to public assets or public service delivery when better options exist. Consider privatizing assets and moving to the private delivery of services wherever feasible,” he said.
Despite Duncan’s openness to the idea, Drummond does not want a fire sale.
“Do not partially or fully divest any or all of the province’s government enterprises — Ontario Lottery and Gaming Corporation, Liquor Control Board of Ontario, Ontario Power Generation and Hydro One — unless the net long-term benefit to Ontario is considerable and can be clearly demonstrated through comprehensive analysis.”
Still, he suggested the LCBO improve its purchasing power and open more stores to generate revenue.
As well, the gambling agency should close one its two head offices — in Toronto or Sault Ste. Marie — as well as one of the two Niagara casinos and allow more slot machines to be installed beyond racetracks or existing gaming facilities.
Progressive Conservative Leader Tim Hudak embraced the report, saying he would “go further than Drummond” by freezing public-sector salaries.
Hudak, who initially opposed full-day kindergarten as an unaffordable “frill” then embraced it for the Oct. 6 election, again U-turned, pronouncing it too expensive.
“Mr. Drummond is clear that we simply can’t afford this program at the current time,” he said.
NDP Leader Andrea Horwath said a more “balanced approach” is required.
“Recklessly scrapping programs people rely on while handing out corporate tax cuts doesn’t make sense,” said Horwath. “Instead of hitting families with higher electricity bills or scrapping kindergarten for our kids, we need to ask whether we can afford spending on things like corporate tax giveaways.”
Green Leader Mike Schreiner chided Drummond for hiding behind the Constitution and not considering the savings that could be realized from melding the Catholic school system in the public one.
“It’s the biggest duplication of programs in the province. Quebec and Newfoundland have shown that constitutionally it’s possible,” said Schreiner.
Original Article
Source: Star
Author: Robert Benzie
That’s the outlook for Ontario, according to a sweeping review of public services urging higher hydro bills, larger school classes, a streamlined health-care system that could lead to fewer hospitals, more expensive tuition and increased user fees.
Don Drummond, chair of the commission on public-service reform, on Wednesday delivered the roadmap for Ontario’s daunting journey.
It came in the form of a two-volume, 668-page report so weighty that a table collapsed when Ontario Provincial Police officers unloaded embargoed copies in the media lock-up.
“Ontario faces more severe economic and fiscal challenges than Ontarians realize,” said Drummond, a former TD Bank chief economist, warning the deficit would balloon from $16 billion this year to $30.2 billion by 2017-18 unless the hemorrhaging is stanched.
“Our message will strike many as profoundly gloomy. It is one that Ontarians have not heard, certainly not in the recent election campaign, but one this commission believes it must deliver,” he said, castigating all the major political parties for saying they could balance the books within five years relatively painlessly.
Finance Minister Dwight Duncan said the only one of Drummond’s 362 cost-cutting recommendations the government rejects outright was scrapping full-day kindergarten — everything else is “part of the mix.”
While Duncan said taxes wouldn’t be hiked — a planned cut in corporate taxation rates from 11.5 per cent to 10 per cent does appear doomed — he did not rule out asset sales even though the commission cautioned against them.
“I didn’t say those other things are out of the question — I’m the finance minister, we’re the government,” he said.
Many of Drummond’s recommendations would be politically difficult to enact — especially for a minority government re-elected on sunny promises less than five months ago.
As first disclosed by the Star, overall increases must be capped at 0.8 per cent per year through 2017-18.
Health-care spending, up an average of 6.3 per cent annually over the past five years, must be held to 2.5 per cent growth — though Drummond admitted “not one jurisdiction in the world” over the past 30 years has managed to keep costs to that annual rate.
Primary and secondary education budgets can rise only 1 per cent with colleges and universities going up 1.5 per cent and social programs just 0.5 per cent.
Everything else the government funds must be reduced by 2.4 per cent per year.
“Reform must be pervasive and speedy. The government will need to implement all the reforms we recommend … to restrain the growth of program spending enough to achieve balance by 2017-18,” he said.
With 105 recommendations on health alone, there is much for Premier Dalton McGuinty’s Liberals to digest.
Senior officials confided much of Drummond’s report would be taken under advisement, noting some of its tenets will be introduced in Duncan’s budget next month or are already under way with Health Minister Deb Matthews’ reforms announced two weeks ago.
But Liberal insiders told the Star the report presents a “worst-case scenario” that could give the government political cover when less dramatic cuts are made later this year.
That is not what Drummond wanted to hear.
“This is not a smorgasbord from which the government can choose only the tastiest morsels and ignore the less palatable,” he said.
“We can all agree that change is disruptive, but the medicine does not go down more easily if it is dragged out over a long period.”
Although Drummond was not allowed to consider tax hikes, he said he “cheated a bit” and found $2 billion in “enhanced revenues” though higher fees and better collection of monies owed the province.
But the lion’s share of the savings he identified came from cutting some of the Liberal government’s most treasured achievements:
• Scrapping or revamping full-day kindergarten;
• Raising the 20-student class-size cap in junior grades to 23 children and increasing the average in junior grades from 24.5 to 26 students and from 22 to 24 in secondary school;
• Ending the Ontario “clean air benefit,” the 10 per cent rebate to electricity bills that costs the treasury $1 billion a year;
• Cancelling the new 30 per cent Ontario tuition grant for college and university undergraduate students unless the overall post-secondary budget can be kept to a 1.5 per cent rise;
• Extending the period that municipal social service costs will be uploaded back to Queen’s Park by two years to 2020;
As well, Drummond said Ontario’s 14 local health integration networks (LHINs) should be in charge of all 2,500 separately funded health agencies, including the province’s 151 hospital corporations, which would lead to amalgamation of some hospitals.
But he urged against “across-the-board cuts,” wage freezes or targets for civil-service job reduction, though he implored the government to be creative.
“Do not hang on to public assets or public service delivery when better options exist. Consider privatizing assets and moving to the private delivery of services wherever feasible,” he said.
Despite Duncan’s openness to the idea, Drummond does not want a fire sale.
“Do not partially or fully divest any or all of the province’s government enterprises — Ontario Lottery and Gaming Corporation, Liquor Control Board of Ontario, Ontario Power Generation and Hydro One — unless the net long-term benefit to Ontario is considerable and can be clearly demonstrated through comprehensive analysis.”
Still, he suggested the LCBO improve its purchasing power and open more stores to generate revenue.
As well, the gambling agency should close one its two head offices — in Toronto or Sault Ste. Marie — as well as one of the two Niagara casinos and allow more slot machines to be installed beyond racetracks or existing gaming facilities.
Progressive Conservative Leader Tim Hudak embraced the report, saying he would “go further than Drummond” by freezing public-sector salaries.
Hudak, who initially opposed full-day kindergarten as an unaffordable “frill” then embraced it for the Oct. 6 election, again U-turned, pronouncing it too expensive.
“Mr. Drummond is clear that we simply can’t afford this program at the current time,” he said.
NDP Leader Andrea Horwath said a more “balanced approach” is required.
“Recklessly scrapping programs people rely on while handing out corporate tax cuts doesn’t make sense,” said Horwath. “Instead of hitting families with higher electricity bills or scrapping kindergarten for our kids, we need to ask whether we can afford spending on things like corporate tax giveaways.”
Green Leader Mike Schreiner chided Drummond for hiding behind the Constitution and not considering the savings that could be realized from melding the Catholic school system in the public one.
“It’s the biggest duplication of programs in the province. Quebec and Newfoundland have shown that constitutionally it’s possible,” said Schreiner.
Original Article
Source: Star
Author: Robert Benzie
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