There's nothing moderate about this Ontario budget
The public relations team in Ontario Finance Minister Vic Fedeli’s office must have been high-fiving and smiling when they saw the news coverage of their boss’s first budget last week.
“There are no savage cuts in the first Ford-Fedeli budget,” one columnist said. Another called the budget “centrist.” If you only cast a quick glance at mainstream news coverage — and that’s all many of us do — you might think the 2019 Ontario budget is a moderate one that “strikes a reasonable balance,” as one bank economist wrote.
Nothing could be further from the truth. The program spending cuts in the budget are harsh, and they will hurt people — including many Ontarians who are vulnerable already.
There’s nothing moderate about this budget.
The province’s children and social services ministry will see its budget slashed by $1 billion over three years, taking money out of the pockets of social assistance recipients and cutting programs that help children and people with disabilities. Student financial assistance will be two-thirds of a billion dollars less this year than it was last year. Many who can’t afford a lawyer will be on their own as Legal Aid Ontario takes an immediate 30 per cent budget cut. Students in our public schools will have fewer teachers and bigger classes.
After inflation and population changes are factored in, every government ministry is being cut. The full impact of these cuts will only be known when they filter down to the front lines, but in every case, they will have an impact — a negative one.
So how does a budget that promises so much pain look like just another day at the office? Several reasons spring to mind.
Many observers were surprised to see the budget make a smaller-than-expected dent in the provincial deficit this year. “The fiscal hole is deep,” Fedeli said last fall, warning Ontarians of sacrifices to come. Last week, though, he seemed content to crawl out of that hole at (by Tory standards) a turtlish pace. The deficit, which he pegged at $11.7 billion for 2018-19, will fall to $10.3 billion this year.
The relatively slow pace of deficit reduction may suggest that the program spending cuts are similarly modest. This is incorrect; the cuts are large. But so, too, are the tax cuts that rob the province of billions.
By legislating an end to the province’s cap-and-trade program and cutting a number of taxes last year, the government took billions of dollars from the budget. That lost revenue, plus new corporate tax breaks, will drain an average of $3.6 billion a year from provincial coffers over the next three years. That money could have stayed in vital programs; it could have reduced the deficit. It did neither.
There is new spending in the budget, of course, mostly designed to give government spokespeople something to point to as a sign of PC compassion. Dental care for low-income seniors is a good thing, but when you drill down, $90 million for the new tooth program is minor beside the billions being extracted from other programs.
Of course, many consumers of budget news may have no idea at all about what their money is being spent on — or not spent on: when it comes to distractions, this year’s budget was outstanding. New license plates and drinking at 9 a.m. have nothing to do with how to best spend $150 billion, but if that’s what you are talking about around the watering hole, you may have missed a few details.
That was the plan all along.
From the standpoint of paying for the public services Ontarians need, the 2019 Ontario budget is an abject failure. It hurts people in very real ways. But as a public relations exercise designed to conceal bad news, the budget did its job. Fedeli, a former ad man, had a good day last Thursday.
The rest of us? Not so much. We’ll save the high-fives for another budget day.
Randy Robinson is Ontario Director of the Canadian Centre for Policy Alternatives.