Column: Ontario’s mysteriously vanishing deficit

By: Darren MacDonald - Sudbury Northern Life

 | Jun 03, 2014 - 10:14 AM |
Not so long ago, a Liberal government in power for more than a decade and battling several scandals and public fatigue, announced it was fighting a budget deficit by boosting spending.

The idea then, as now, was to grow the economy by stimulating it with public spending — and lots of it.

The federal finance minister, Allan J. MacEachen, put it this way in his report to the House of Commons:

“Our budgetary deficit has gone from $12.9 billion in 1981-82 to a forecast level of $19.6 billion this year, whereas the last budget had forecast this year’s deficit at $10.5 billion.”

Nonetheless, MacEachen gamely predicted a return to fiscal responsibility within five years through such restraint as “a six per cent limit on government wage and salary raises.”

Other measures included $200 million for job creation programs, “$400 million for housing stimulus and mortgage assistance, $500 million for interest assistance to small businesses, farmers and fishermen.”

By 1984, shortly before they were voted from office, the deficit had risen to $31.5 billion.

Servicing the accumulated debt had, by that point, become twice as expensive as health care.

Ontario in 2014 is feeling a lot like Ottawa of the early 1980s, where the parties are competing not so much to govern as to not lose ground in an election.

Liberal Premier Kathleen Wynne and NDP Leader Andrea Horwath occupy almost the identical political ground on the centre left, a spot from which you can only promise to spend now and pay, somehow, later. Yes, they say, the deficit will rise to $12 billion, then $17 billion, then will shrink magically over two years to somehow balance by 2018.

Never mind that we’re spending more than $11 billion servicing the debt, a number that will rise to more than $14 billion before it turns around under the economic magic plan.

Question a Liberal or an NDP supporter about how the plan could possibly do what it’s intended to do, and they will assure you it has been fully “costed out” — which is a new buzzword for “I haven’t a clue.”

So you have voters being promised a host of things that don’t seem realistic: money for Maley Drive; money to complete four-laning of Highway 69 by 2017 or even 20165; money for the Ring of Fire; money for everything — all with no tax increases for you and me, and no spending cuts.

Sadly, Tory Leader Tim Hudak, who had a chance to be the grownup in this election race, chose instead to promise budget cuts without pain.

The promise to lay off 100,000 public servants while creating a million jobs prompted the question at last weeks Sudbury Chamber of Commerce debate: Why not keep the 100,000 employed and make a 900,000 jobs plan?

The reason, of course, is that none of this is real. None of the parties believe they’ll get a majority, so instead are jockeying for position in another minority parliament. The budgets and forecasts are aimed to help win ridings, to bolster support where polling shows vulnerability.

By the time the federal government wrested the deficit monster under control in the 1990s, it was only after a lot of pain and time.

That’s a reality no one wants to talk about in 2014.

Darren MacDonald covers city hall and politics for Northern Life and NorthernLife.ca.

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Darren MacDonald

Darren MacDonald

Staff Writer


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