Tuesday, May 1st, 2012 - Toronto.
Good evening.
I want to begin by talking about some town hall meetings I’ve been holding across the province. To talk to the people who pay the bills.
Sure, they’re discouraged. Times are tough. There’s also a feeling that events in Ontario are moving quickly now – and not in the right direction. That our best days as a province are behind us, and that the only challenge left is how best to manage the decline.
The striking thing is, when I remind them that Ontarians are better than that, that we’ve come back before, because we’ve dared to think in new and different ways, I see heads start to nod in agreement. They nod when I tell them that I’m hopeful. That I see prosperity in Ontario’s future – and that they should too.
An Ontario where entrepreneurship, self-reliance and resourcefulness drive us toward better days.
We’ve got some priceless advantages to help us get there. A skilled workforce, and hungry entrepreneurs. People who think, invent, forge, grow, build and mine resources, products, services and ideas in demand around the world. And a prime trading location in the heart of North America.
We have always had these advantages.
At the same time, though, the people I talk to “get it” when I say that in order to imagine where we can go, we need to take stock of where we are.
So here’s where we are: We’re in a jam. The money’s run out. We have more than half a million people unemployed. The populations of Burlington and Brampton – combined. Job creation has lagged the national average for 63 consecutive months now. That’s never happened before.
We are careening toward a $30 billion deficit, and a tripling of our debt – to $411 billion. And just last week, barely two days after Ontarians were handed a budget “deal” that took a tax-and-spend budget and added more taxing, and more spending, we were slapped with a negative credit watch by Standard & Poor’s.
And just one day after that, with an actual credit downgrade from Moody’s. Our third in three years.
Why did we vote against the budget? There’s your answer.
Some called it a game of chicken. I call it a matter of principle – because the chickens are coming home to roost.
I was recently in New York to talk to some of your colleagues – leaders in global finance. Investment bankers, credit raters, currency traders. And for all that you and I live, breathe and dream Ontario – to them, we’re just another place on a map and another bunch of numbers.
These people have no dog in this hunt. Just the facts, Ma’am.
I said to them, “When you get asked, by a President or a Prime Minister, a Premier or a Governor, what are the top three things they’ve got to do to attract investment – what do you tell them?” Here’s what they said: First, rein in spending, balance your books and pay down your debt. Second, rein in spending, balance your books – and pay down your debt! And third, bring down taxes on businesses and entrepreneurs.
Because businesses know that heavily indebted governments can’t afford the things that make them attractive places to relocate to, or invest in, or create jobs – things like competitive taxes and world-beating infrastructure.
That’s why I’ve said this government doesn’t have a jobs plan: It refuses to recognize the link between probity and prosperity.
As a result – in Ontario today, if there were a Ministry of Debt Servicing, it would be the third largest expenditure after health and education. Bigger than the branches of this government that deliver real-world priorities, like infrastructure and transportation.
And the fact is, a one per cent increase in interest rates would cost Ontario five hundred million dollars. Do you know what that money could buy? How about, say, two hundred and fifty thousand MRI exams?
But instead of using that money for priority services for Ontarians – things like health care and education – actual investments in our future prosperity, it goes instead to the balance sheets of international financial institutions.
Talk about “a redistribution of wealth.”
No, the only glue holding this boat together is low interest rates. Once they start to rise again – which now is only a matter of time, thanks to our credit downgrade – the whole thing starts taking on water.
That’s why I’m concerned that spending is up – not down. By $2 billion. Meaning Ontario is adding to its debt at a pace of $1.8 million an hour. Every hour, of every day, of every week.
So when you leave tonight, you’ll head out into a province that is nearly $6 million deeper in debt than when you came in. And no – not just because this speech went on too long!
Think about that.
Try going through the government’s budget – the so-called Action Plan for Ontario. You’ll be struck, as I was, by the near total absence of action verbs. Instead, you read “begin discussions”, “consider”, “seek input”, “delay”, “consult”, “review”, “set up a panel” and “seek advice”.
This is the way you talk when you don’t know what to do, Or if you’re not working from a plan. Because there’s no plan here for lower business taxes. They’re going up – not down.
There’s no plan for eliminating the deficit. It’s going up – not down. There’s no plan to rein in spending. It’s going up – not down.
There’s no plan for private sector job creation.
There’s no plan for a balanced budget by 2017 – the target set by Don Drummond. You remember Don Drummond. He’s the former TD Bank chief economist hired by this government to tell them how to get out of this mess. Well, there were plenty of action verbs in Don Drummond’s vocabulary – which he used to chart a course to a balanced budget with deep, structural reforms.
All those action words. Met with government inaction.
Inaction that results from the lack of a plan – compounded by managerial incompetence. A failure to set proper targets – and an inability to hit them. Setting and aiming for targets is something you do every day. You hit them – fine. You’re just doing your job. You miss them, heads roll. In government, if you miss them, you blame Greece. Or the tsunami. Or the oil sands. And you wind up on the road to a $30 billion deficit.
This government is now so badly managed, it can’t even keep an eye on the basics. The ORNGE air ambulance scandal is a symptom: Over $700 million was forked over with such poor oversight that there’s now a criminal inquiry. The eHealth fiasco – a billion dollars there. Another example.
It all fails the test of managerial competence. If it happened in your world, you’d fire your CFO and change your management team. It just doesn’t work that way at Queen’s Park. Instead, you get told what a valued member of the team you are.
Want to see what management failure looks like?
I’ve got tickets for Question Period.
So, we’ve got some tough decisions to make. And we need to make them now. Because the longer it takes, the deeper the hole – and the steeper the climb back out. Meaning “delay” is not a restructuring strategy.
So here’s what I would do: Start by gathering the best brains in government and business. Examine every dollar. Challenge every expense. Set targets. Act on them. Measure progress – and hold people accountable for the results.
I would have tabled a fall economic statement that cut spending – not increased it – and brought in an early budget that took urgent action on two tracks: reducing the size and cost of government, and kick starting job creation. Because you can’t just cut your way to prosperity. You need to grow the economy too.
Now, I wasn’t elected to the job last time. But last November 8th, I met with the guy who was, and laid all this out for him. None of it happened.
And so we got our downgrade.
Instead of a pro-growth plan, we got the opposite: higher taxes on businesses, and a punitive new tax bracket on innovators, entrepreneurs and people with investment capital to create jobs, that we so urgently need right now to create jobs.
Two new barriers to prosperity.
People who are rewarded by the marketplace should not be penalized by the government.
Not on my watch: Mine would be a pro-growth government that fosters innovation, rewards hard work and encourages our own.
Instead, we have a government that rummages in the sofa cushions for small change, when what we need is big change. A plan that projects optimism for a better future.
It starts with a new approach: A government that gets the big things right, which is going to take a Premier who can act, leading a government that can execute.
I’m going to keep hosting those town hall meetings. I see resilience. I see resolve and I see hope, in those faces. So I’ll continue sharing my ideas. I’ll continue to seek out the best available talent here at home, and anywhere else I can find it.
And soon, well before the next election, I’ll table a fully integrated plan that brings a new approach to the challenges we face. A new vision for Ontario’s future and a blueprint for prosperity.
So tonight, my message to you is this: There’s a real belief out there that Ontario can come back – if only we could burst through the deadening inertia that today hangs over Queen’s Park like a fog.
By taking a new path.
I see that Ontario out there, through the mist. An Ontario of unbounded promise and confidence. Where success is a badge of honour, not a dirty word. Where hard work and innovation are rewarded, not regulated, taxed and punished by a government that looks to business planners – not central planners. One that treats energy policy as an economic fundamental – not a plaything for social engineers.
A government that works for its citizens. Not the other way around.
And where a free and prosperous people are urged not to lower their sights, but to aim for new heights.
This is the Ontario that was meant to be.
I say to you that it’s not just within our reach.
It’s on its way.
Thank you.
