The provincial government is tightening its belt and asking Ontarians to do the same with a budget that slashes spending by more than $17 billion over the next three years.
The Liberals are calling for a two-year wage freeze for about a million public sector workers, including teachers and doctors, hiking user fees and closing schools and jails.
The Liberals peg the deficit for 2011-2012 at $15.3 billion, a billion lower than forecast last year, and put themselves on track to eliminate the deficit by 2017-18.
But the government warns that without the tough measures, the province's deficit would approach $25 billion in 2014-15.
The cuts, with their projected three-year savings totals in brackets, include:
- Closing "underutilized" schools beginning in the 2013-14 school year ($116 million).
- Closing six "inefficient" prisons in Owen Sound, Walkerton, Brantford, Chatham and Sarnia, and the Toronto West Detention Centre ($232 million).
- Imposing a monthly 3,000 kilowatt-hour cap on the Ontario Clean Energy Benefit, which takes 10 per cent off electricity bills ($470 million)
- A $100 deductible on drugs for seniors who have an annual income over $100,000, and a $200 deductible for senior couples with a combined income over $160,000. Also, these high-income seniors will be hit with a $6.11 co-payment per prescription ($30 million)
- Reducing the annual rate of growth in health care spending to 2.1 per cent over the next three years (down from an average of 6.1 per cent).
- Phasing in increases to the Ontario Child Benefit in two stages, from $1,100 to $1,210 in 2013 and to $1,310 in 2014 ($79 million).
The Liberals extended an olive branch to the NDP by postponing planned corporate tax cuts that had been scheduled for 2012 and 2013. The rate will be frozen at 11.5 per cent, for a savings of $1.5 billion over three years, and cuts will resume when the province balances the books.
But the document may kick off a war with organized labour over wage freezes and warnings to get pension costs and liabilities under control.
The budget extends a pay freeze for MPPs for another two years, for a total of five years, but also freezes wages for teachers, doctors and other public sector workers, including members of the Ontario Public Service Employees Union.
It also calls for a two-year freeze on salaries for executives at hospitals, universities and other agencies.
In a briefing note, the government threatened "administrative and legislative measures" if employers and workers can't work out new deals "that are consistent with the fiscal plan."
The budget also warns that underfunded public sector pensions must make up funding gaps either with increased employee contributions or a decrease in benefits, rather than further government top-ups.
Finance Minister Dwight Duncan struck an optimistic tone when selling the budget to reporters, calling it "the right plan," that's been crafted "to get the support of all Ontarians."
"Right now, the single most important thing we can do to grow our economy and create jobs for our families is to balance the budget," Duncan said.
"The budget takes strong action and makes the right choices to protect the results we've achieved in health care and education."
When asked whether the government will be able to meet its deficit-reduction target, particularly given that some of the measures have yet to be costed, Duncan quipped: "We'll certainly get there before the Leafs win the Stanley Cup."
The document pegs the annual cost of servicing the debt at $10 billion, the third-largest annual expense behind health and education.
The Liberals need the support of two opposition MPPs to get the budget passed or Ontarians will yet again head to the polls.
Duncan acknowledged that there are elements in the budget that the opposition will find it difficult to support.
However, he pointed out that the NDP gets its corporate tax freeze, and a hold on executive compensation. The Conservatives, he said, should be pleased with the "extreme low rate of growth" in spending.
Duncan said should the opposition vote bring down the government, "we will seek a mandate from Ontarians to carry out this plan."
Progressive Conservative Leader Tim Hudak called the document "a weak and disappointing response" to the "warnings that we need to change course" to avoid going over a financial cliff.
"(The government) does not grasp the seriousness of the situation," Hudak told reporters. "The need for swift, integrated action to address the jobs crisis and the debt crisis in the province of Ontario."
Duncan claimed the budget would create or protect 170,000 jobs, without offering specifics.
The budget only calls for the "consolidation" of business support programs into a Jobs and Prosperity Fund, that will focus on job creation.
The lack of a jobs plan, Hudak said, is "a major failure."
He said the Progressive Conservatives "cannot support this budget." He said all PC MPPs would be in the Legislature when it comes time to vote on the document.
"If it were a serious plan, we'd support it. If it had a jobs plan, we'd support it. It has neither," Hudak told reporters after the budget was delivered.
"We won't be voting for this budget. We'll vote against it and all my members will be there to vote against it."
NDP Leader Andrea Horwath said despite an election promise to work with the Liberal minority government "to make it work," the budget "leaves us with a serious decision to make."
She, like Hudak, criticized the lack of a jobs plan, saying the budget "has very little to offer" to Ontarians worried about jobs, wages and the availability of key services such as health care.
She would not say whether she plans to support the budget and prevent another election, only committing to consult with voters before making that decision.
