Tough Budget – Tough Decisions for Government of Ontario

A tough Ontario budget will be delivered March 27th. Finance Minister Dwight Duncan has signaled that Ontarians can expect a budget that will make difficult choices to keep the province on track to balance the books by 2017-18. And tough, it should be.
Coping with the Deficit while at the same time trying to foster economic growth in Ontario, will be no easy feat. Doing both will require that the Ontario government responds quickly to a series of short and long-term recommendations that are designed to restore Ontario’s place as Canada’s economic engine.
As part of a province-wide set of recommendations, the London Chamber along with our counterparts from the Ontario Chamber of Commerce are urging the government to concentrate its short term efforts on returning to fiscal balance by eliminating its $16 billion deficit. It also urges the government to capitalize on new areas of growth.

In the short term we believe that the government’s plan should be a measured one that is fiscally responsible and does not hinder economic growth. As such, the government should not retreat from moving ahead with scheduled corporate income tax rate reductions as we have previously prescribed.

They can and should begin to eliminate the deficit by implementing a broad, long-term public sector compensation restraint strategy along with reforming Ontario’s labour arbitration system to make it more sustainable.

We have also recommended that freezing transfers to those municipalities that do not reduce or limit spending should be part of that short-term plan. The City of London has fared well in this regard but many Ontario communities have not. The Province would also be well advised to use alternative service delivery when it is efficient and effective to do so.

Further advances could be made if the Province would cut red tape by streamlining and harmonizing regulations between governments and by adopting co-regulation and self-regulation models.

In the longer term we believe that the government’s long-term plan must recognize that future economic growth depends on the Province’s ability to meet the needs of a 21st century economy. As such, the government should promote an export culture in Ontario by encouraging trade with emerging/growing markets. In addition, the Province should spur innovation and productivity by streamlining innovation supports and promoting top growth sectors by maximizing resource development and making strategic investments in infrastructure.

The Drummond Report was quick to point out the dire situation that our health care sector finds itself in. As such the Province must reform Ontario’s health care system by adjusting compensation models for some workers and management and, by allowing more specialized private clinics to operate in the Province.

We also believe every effort should be made to approve legislation that prescribes the reduction of WSIB benefits and employer premiums along with significant reforms to Ontario’s pension system so that both can remain viable.

As we scan our members greatest concerns heading into this budget, we should not be surprised that they include: 1) addressing the deficit; 2) cutting red tape; 3) cutting spending and redirecting it to priority areas; 4) supporting innovation; and 5) expanding the provincial wage freeze to the broader public sector.

The real test for this government will be the courage required to make these tough decisions and to make significant cuts to low performing or unnecessary programs while again, not stifling much needed economic growth and job creation. Time will tell how well they can juggle the two. In the meantime, the term “shared pain” comes to mind!


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