In fact, they almost certainly won’t. The well-off will fare better than the poor and middle class. Public sector employees will be hit harder than those in the private sector.
Groups with political clout — such as the multinational pharmaceutical firms that charge prices Drummond deems too high — are sure to successfully resist proposals that they share the pain. They’ve done so before.
Most alarmingly, Drummond’s harsh medicine would throw tens of thousands more Ontarians out of work.
His proposed spending cuts may result in a balanced budget by 2018. But calculations based on Drummond’s own figures indicate they will push the provincial unemployment rate into double-digit territory.
Class first.
That the rich will fare best under Drummond is true by definition.
The well-to-do depend less on government programs than the poor and middle class. That is a fact. Drummond’s call for government to roll back the Ontario Child Benefit will hurt poor families who receive the subsidy. It will not affect the rich who do not.
Nor are the wealthy being asked to chip in through higher progressive taxes. Drummond did advocate that some taxes, including those on property and gasoline, be hiked. He even wants a special tax (he calls it a user fee) levied on rural parents who bus their children to school.
But these kinds of regressive taxes hit the poor and middle class proportionally harder than the rich. A surtax on high-income earners could correct that bias. But Premier Dalton McGuinty specifically told Drummond to stay away from such remedies.
Add to this the real world of politics, a world in which some groups have clout and others do not.
Take Drummond’s proposed health-care savings. They are predicated, in part, on moving physicians into so-called family health teams where doctors earn less.
But as the Canadian Medical Association Journal has reported, such teams have succeeded up to now only because they’ve paid doctors more.
Drummond says Ontario physicians are the highest-paid in Canada. He’s wrong. The Canadian Institute for Health Information says that Ontario family doctors, for instance, earn less than their counterparts in six other provinces.
SEE ALSO: Hébert: Drummond report, Alberta budget expose Canada’s two-tier economy
More to the point, history shows that doctors relocate when they feel hard done by. Is McGuinty willing to risk another physician shortage? Or will he find an easier group to attack? The answer should be obvious.
All of this is helps explain why the Drummond cuts can’t be fair. But the oddest aspect of this well-respected economist’s report is that he never addresses the macro-economic implications of his plan.
In his former life as a bank economist, Drummond routinely calculated the effect of government spending on employment. Yet in this report there is nothing, even though he acknowledges he is proposing cuts on an “unprecedented” scale.
In fact, he appears to assume that the government’s decision to withdraw billions of dollars from the economy will have no effect on gross domestic product and jobs.
Yet if we maintain, as Drummond once did, that government spending does matter, a different picture emerges. Rough calculations, based on his figures and finance department estimates, suggest that the Drummond plan will end up throwing roughly 250,000 additional Ontarians out of work by 2018. Even without another global crisis, that translates into an unemployment rate of about 11 per cent.
Is this really where the McGuinty government wants to go?
Original Article
Source: Star
Author: Thomas Walkom
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