Drummond proposes drastic cuts in 'gloomy' report
Josh Visser, CTVNews.ca
Published Wednesday, February 15, 2012 10:55PM EST
Bigger class sizes, higher utility bills, new parking fees and higher drug bills are among the 362 recommendations that Ontario needs to implement in order to avoid the fate of debt-plagued Europe, former chief economist Don Drummond warned in a report Wednesday.
Canada's most populous province could end up doubling its deficit by 2017-2018 and increase its debt to a massive $441.4 billion without implementing his recommendations, Drummond warned.
"Ontario's finances do not yet constitute a crisis, and with early strong action a crisis can be averted," the 500-page report states.
"The lessons of history and of what is happening elsewhere today are clear: the government must take daring fiscal action early, before today's challenges are transformed into tomorrow's crisis."
While Drummond said Ontario's economic situation "is pretty much unprecedented in post-war Canadian history" but later told CTV's Power Play that the province is still far away from the debt issues crippling European countries like Greece.
Some of the key recommendations:
- Cap health-care spending to 2.5 per cent a year to 2017-18
- Increase use of home-based care
- No increases to doctors' pay
- Cap growth of post-secondary education spending at 1.5 per cent a year to 2017-2018
- Cancel all-day kindergarten, or delay full implementation
- Increase average class size from 22 to 24 in Grade 9 to 12
- Reject further employer increases to Teachers' Pension Plan
- Start charging for parking at GO Transit parking lots
- Charge students to use school buses
- Road tolls
Finance Minister Dwight Duncan said the Liberals will protect all-day kindergarten.
Almost a third of the recommendations were aimed at health care, Ontario's most expensive ministry.
"Ontario needs to start having an open, honest discussion about public coverage of health care costs, which includes the possibility of broader public coverage of pharmaceutical costs and how it should be financed," Drummond concludes in the report.
He told Power Play that Ontario is still running a health-care model that was created when the population was younger, and thus, not focused on the chronic care needed for seniors.
The report stated openly that its recommendations were "gloomy."
"Our message will strike many as profoundly gloomy," the report says. "It is one that Ontarians have not heard, certainly not in the recent election campaign, but one this commission believes it must deliver."
Drummond said in the report that even if the Ontario government sticks to its current deficit plan, it will still have a shortfall of $30 billion by 2017-2018.
Duncan said the important message from the Drummond report is that the government needs to take action.
"This is a serious report and shows the magnitude of the challenge facing Ontario, but it doesn't have all the answers," Duncan told reporters Wednesday. "Our plan will need to identify more specifically how we will reduce the deficit while the same time, position our economy to be stronger and produce more jobs."
Duncan said he planned to meet with his counterparts from the opposition parties to discuss the report prior to the McGuinty government's first minority budget.
He added the Liberals would consider the NDP's request to delay a planned cut to corporate taxes.
Duncan said Drummond's report did not have to deal with what consequences the proposed expenditure cuts would have on citizens and their communities.
"Our challenge is to find that balance, to ensure we all work through this together," he said. "And this will require the votes of the opposition parties – at least two of them to get a budget passed."
Drummond said the government does not need to implement all of his recommendations but something has to be done.
"Something's got to give, for every suggestion of ours that is rejected, something has got to replace it." Drummond said.
Progressive Conservative Leader Tim Hudak used the report to blast the McGuinty government's "runaway spending."
"I don't think Dalton McGuinty has shown the ability to restrain spending," he told reporters, saying he expects the Liberals to ignore the report.
Hudak added that if he was premier he would cancel all-day kindergarten, one of the key recommendations. During the recent provincial election, the Progressive Conservatives quietly supported the all-day kindergarten plan.
He also said the McGuinty government was afraid of "leveling with average people," saying the Liberals are worried the truth might hurt them in the polls.
NDP Leader Andrea Horwath said the government needs to look at both sides of the coin when balancing the budget, and said Ontario lost $2 billion in revenue to corporate tax cuts.
She said Drummond was only given a mandate to look at cuts, making the report one-sided.
"Recklessly scrapping programs that people rely on while at the same handing tax cuts to Ontario's richest corporations is simply wrongheaded and it doesn't make any sense," she said.