Ontario elections: the three plans for provincial failure
The provincial election set for June 12 is undoubtedly going to be one revolving around the economy.
Kathleen Wynne’s Liberals presented a budget about revitalizing transit and a new Ontario pension system for long-term economic gains. Tim Hudak’s Progressive Conservatives are touting a million new jobs as a part of their platform to revitalize the Ontario economy. Andrea Horwath’s New Democrats are mostly talking about affordability for families and again, the strength of the Ontario economy.
The problem with all three parties is they designed plans with the aim of attracting votes rather than creating a plan to fix Ontario’s economy. All parties admit there is a problem. They scream about the deficit, the debt and the slowing economy, and yet none of them have a plan that will actually fix these problems.
The problem in this election begins with Tim Hudak and the policy paper his party released called, “An Agenda for Growth.” Hudak makes a strong case for freezing and even decreasing government spending to balance the budget before 2017, citing good examples from across the political spectrum of governments having done the same thing. The problem arises on the next page when Hudak suggests cutting taxes while simultaneously cutting spending.
Wynne does something similar in her new transit funding and pension plan. The Liberals are looking to increase taxes to pay for these new expenditures while claiming the deficit will be gone in four years – also because of the raised taxes.
This is the same problem most politicians have during election campaigns. They all seem to think that deficit reduction can be done in a haphazard way. The PCs want to cut spending and taxes while the Liberals and NDP want to increase both. Looking back to the 1990s in Canada and Ontario, it is easy to see neither of these plans is set to do well.
In 1993 the Liberal Party of Canada was elected to government and Paul Martin became finance minister. Over the next nine years Martin fundamentally restructured the federal budget, scaling spending further down than it had been in 40 years. However, there was an important part of the Liberal election platform Martin did not implement.
The Liberals had essentially promised to eliminate the GST in the election, but when they got into government Martin knew to cut taxes at the same rate as spending would make the spending cuts ineffective. With minimal tax cuts and major spending reductions, the federal government balanced their budget in 1998.
At the same time in Ontario, Premier Mike Harris also made substantial cuts to government spending. He also made massive tax cuts across the board, which made Ontario’s debt problem worse rather than better.
Austerity measures are only effective in the short term. They are only useful as a means of eliminating debt quickly because otherwise they stifle economic growth almost as badly as decade-long streaks of deficits.
Ontario has a debt problem. This is a problem that has to be dealt with and none of the parties seem to have any real solutions to offer. If you want to get Ontario out of debt, you shouldn’t follow the Harris plan of drastically cutting services and taxes at the same time. It creates the same problem as increasing spending and taxes at the same time.
If you need $100 to buy groceries and borrow $70 from your friends, you either cut $30 of spending or find some way to get the missing money. If your plan is to give $30 back to your friends while also buying fewer groceries, you are still going to be short $30.
All the parties are missing a proper plan for fixing Ontario’s financial issues, and it is because they care more about getting votes than actually fixing the province.