Tim Hudak: "The budget Ontario needs"

March 30, 2012 - The Globe and Mail - With eight provinces and the federal government in deficit, political leaders across the country are faced with a similar challenge: How do we encourage job creation while regaining control of spending? The responses vary. Some have taken immediate action, while others, like Ontario, have moved at a glacial pace.

In the province that has long been an economic leader, 600,000 men and women are now unemployed. Yet, this week’s provincial budget will neither stimulate the economy nor aggressively attack the deficit. In the next year, the deficit will remain constant, leaving a staggering $15.2-billion gap between revenue and spending. Job creation is forecast to decline.

In New York this month, I met financial experts to discuss Ontario’s debt. Their advice is consistent with the way I would have approached the problem. For starters, I would not have accepted anemic private-sector growth or a slow response to a looming $30-billion deficit.

Businesses can invest anywhere in the world. If they’re going to come to Canada, they’ll look for a few basic things. They want a credible plan to eliminate deficits and get debt under control, and they want a competitive tax environment. Businesses realize that governments burdened with debt won’t be able to create a competitive tax climate and build and sustain infrastructure – two key things that attract investment, expansion and new jobs.

They need low tax rates, so they can retain more of their earnings to expand and hire. They want certainty about government tax policy, too, so the rules don’t change partway through the game. In Ontario, for example, this week’s budget would abandon a promised business tax cut. That’s not how you build an economy. A recent estimate by a leading economist said this measure alone could result in a loss of 30,000 jobs over 10 years. A higher tax burden than businesses had planned for amounts to a tax increase.

Affordable energy is another cornerstone of growth. The provinces that have taken steps to assure a steady supply of power at fair rates are well positioned for growth. Those like Ontario, where power rates are being driven up by subsidies that pay wind and solar producers between two and 10 times the going rate for energy from conventional sources, are not.

We need to pay attention to what’s happening in the world. One of the key factors in Germany’s success, for example, has been a strong apprenticeship system. I have advocated an aggressive apprenticeship plan for Ontario. The failure to act on this has left good skilled trades jobs unfilled.

Growth won’t happen unless government gets the fundamentals right. Our priority must be policies that create the conditions for growth, and that has to be accomplished while making significant structural changes. We can’t cut our way to prosperity; we need to grow our economy, too.

Every day that government puts off difficult decisions adds to debt and narrows our room to manoeuvre in the event of a sudden economic shock. This has been Greece’s sad experience.

The challenges facing Canadian governments may vary, but the underlying principles are the same. When governments control spending, ensure responsive regulation and keep business taxes low, labour markets flexible and energy affordable, jobs and growth will follow. Some provinces realize this, and will pull out of deficit sooner than Ontario. Their next challenge will be to tackle accumulated debt.

As Canadians, we need to reframe the deficit and debt issue. This is not just about government. It’s about the economy, jobs and prosperity.

Tim Hudak is the leader of Ontario’s Progressive Conservative Party.

Budget Spending Unrestrained, No Jobs Plan: Hudak

QUEEN’S PARK (March 27, 2012) – Tuesday’s surprisingly weak budget fails to make the structural changes necessary to the way government operates and spends to avoid a $30 billion deficit, and throws up barriers to private sector job creation – so it cannot be supported, Ontario PC Leader Tim Hudak said today.

“This is the time for tough and responsible fiscal management,” Hudak said. “Yet today’s budget is a weak and disappointing response to Ontario’s jobs and spending crisis.

“In fact, it actually puts up roadblocks to the very economic growth its assumptions are pinned on.”

In particular, Hudak cited the cancellation of business tax cuts: “At just the time we need to be making Ontario more competitive and restoring business confidence to create jobs, Dalton McGuinty is taking $1.5 billion out of the economy over the next three years to pay for his over-spending.”

Other troubling budget content includes:

• A deficit now three times the size of all other provinces combined
• A 2011 deficit that actually increased over the previous year – and doesn’t decrease for another year
• Spending increases in 14 out of 24 Ministries
• A complete lack of a jobs plan except for yet another advisory body, and
• No concrete action on the cost of public sector compensation – just more consultations

Hudak said it all shows that the Premier does not grasp the seriousness of Ontario’s situation – having failed to move off the path toward a $30 billion deficit with his uncontrolled spending: “Instead he has made long-term commitments to pet projects with no way to pay for them, while grabbing for short-term revenues through one-off asset sales and fee increases.”

As a result, Hudak said, the Premier has simply “kicked the can down the road again” despite a looming $30 billion deficit.

Hudak noted that months ago, he set out a “stress test” to provide principled opposition with clear criteria for judging everything the government does, adding the budget fails all three:

It does far too little to reduce the size and cost of government through long-term, structural change to the way government operates and spends

The budget works against contributing to private sector job creation with higher taxes on businesses that will further erode confidence in Ontario as a place to invest and create jobs, and

Because it does nothing to rein in runaway spending, the budget fails to ensure value for money and accountability for taxpayers

“There is no need for Ontario to be condemned to a $30 billion deficit and continued stagnant economic growth,” Hudak said. “That’s why I will continue to promote our positive Ontario PC plan to get our economic fundamentals back in shape, as I have been doing every day since the last election.”

Dalton McGuinty’s “Drummond Deficit”

by Christine Elliott, MLA Ajax-Whitby

“It is a good thing to follow the first law of holes: If you are in one, stop digging.”
- the late British Chancellor of the Exchequer Denis Healey

QUEEN’S PARK – Now staring at a $30 billion deficit, Dalton McGuinty has not only done nothing to meet the Drummond report’s urgent call for less spending – he has actually dug a $4.3 billion hole in the opposite direction, Ontario PC Deputy Leader Christine Elliott said today.

“Don Drummond’s direction to the Premier was clear: If he turns down any one recommendation, it would need to be replaced with another of equal value, to balance the budget by 2017-18,” Elliott said. “We have been equally clear: Everything must be on the table.

“So what does Dalton McGuinty do with this advice? Coupled with his prior un-costed spending on home reno tax credits, he takes more than $4 billion out of the equation – without a word on what he will do to follow the advice he himself asked for, and replace it.

“The Premier must not get away with this. He was continually briefed on Drummond and had the report six weeks early. He knew long ago he would not touch certain recommendations. For every day’s delay, the pain will only get worse.”

Not including the home reno tax credit ($120 million), Elliott tallied the list of Drummond recommendations waved away by McGuinty as off-limits over the past week alone:

• Continuing full-day Kindergarten: $1.5 billion
• Maintaining capped class sizes: $500 million
• Keeping 70 per cent of non-teaching school staff: $600 million
• Maintaining the Ontario Clean Energy Benefit: $1.1 billion
• Retaining the tuition grant: $485 million
• Rejected Drummond recommendations: $4.2 billion
• Add home reno tax credit: $120 million
• TOTAL: $4.3 billion

All this stacks up against a fiscal problem that is much worse than Ontarians were led to believe, Elliott stressed: “By now, Tim Hudak would have acted on his commitments to make Ministers financially accountable for hitting targets, initiated a full program review, had briefings from Drummond and Finance officials, and tabled a fall action plan leading to an early budget.

“Ontarians are now staring at a completely unsustainable $30 billion deficit,” Elliott said. “It’s the McGuinty Liberals’ reckless, one-off spending binges and ad hoc approach to governing – and now playing one group off another – that got us into this mess.

“And it will not get us out.”

New study: Factors associated with voting

Today, Statistics Canada released an important study: "Factors associated with voting" by Sharanjit Uppal and Sébastien LaRochelle-Côté. It concluded that:

• Voting rates increased with both age and education. However, the education effect was much stronger among young voters, such that the difference in voting rates between 18- to 24-year-olds and 25- to 34-year-olds disappeared after controlling for education and other factors.
• Among family types, single parents with young children were the least likely and couples with no young children the most likely to vote.
• Home owners had significantly higher voting rates than renters.
• Overall, immigrant citizens were less likely to vote than the Canadianborn, but voting rates generally increased with time in Canada. Voting rates were highest for immigrants from Northern and Western Europe, the United States, Australia and New Zealand. Conversely, immigrants from East Asia, West Central Asia and the Middle East had the lowest voting rates.
• Residents of Prince Edward Island, New Brunswick and Quebec had higher-than-average voting rates while Newfoundland and Labrador, Alberta and Manitoba had rates below the national average.
• Employed people were more likely to vote than the unemployed or those not in the labour force, after controlling for other factors.
• Looking only at the employed, those working in the public sector or in high-skill occupations were the most likely to vote. Voting rates were lower for those working 40 hours or more per week and in less-skilled occupations.
• Since Canadian voting rates fell in the 1990s and voting in recent American presidential elections has increased, a long-standing gap between Canadian and American voting rates has closed. Trends in the United Kingdom were similar to those in Canada, but their voting rates remained above those of their North American counterparts in most election years.

Hudak: Get on with the job, Premier

“The roots of Ontario’s current fix lie in both the economy and in the province’s record of failing to keep growth in government spending in line with revenue growth.”
- Page 81, Commission on the Reform of Ontario’s Public Services

QUEEN’S PARK (February 15, 2012) – Don Drummond’s report has exposed a Liberal spending crisis more severe than anything previously disclosed, requiring immediate action to start reversing the damage – and straight talk from political leaders, Ontario PC Leader Tim Hudak said today.

“The simple fact is that we would not be in this mess without years of uncontrolled McGuinty Liberal spending, which my Caucus and I have opposed every step of the way,” Hudak said.

“Yet for months now, the Liberals have shown fear that if they level with people they’ll fall in the polls. I believe that if we don’t level with people now, Ontario will fall off a cliff.”

Every day’s delay now will only worsen the situation, Hudak added, saying his responsibility is both to hold the government to account and champion the changes needed to kick-start a provincial recovery and avert Ontario’s bankruptcy.

“Dalton McGuinty needs to restore some confidence that this government has shaken off its paralysis. To start, he must declare a “quarantine zone” around the public purse. No more new, uncosted, one-off spending initiatives.”

Further, Hudak noted, Don Drummond said that every one of his recommendations must be acted on in order to balance the budget by 2017. “If the Premier takes a single one of them off the table he must specify an alternative approach.”

Hudak also called on the government to impose an immediate public sector wage freeze, put an end to corporate welfare – which, according to the report, shows little evidence “of achieving any economic benefit for Ontario” (p. 309) – and implement pro-growth policies such as apprenticeship reform.

Longer term, Hudak said, Ontario governments need to return to first principles: spend only what you have; set spending priorities on essential programs and services such as health and education; and exit all other areas of business that government has no business being in.

“It’s time to say the things Ontarians need to know – not just what they want to hear: We’re running out of money, and running out of time,” Hudak said. “And, as we fight for a smaller, smarter government, we must also grow the private sector economy.

“I commit to lead this charge on behalf of Ontario’s hard-pressed taxpayers – and especially the 600,000 Ontarians who didn’t have a job to go to this morning.”

Parkdale-High Park Members Active at Ontario Convention

The Parkdale-High Park riding association sent a 17-person delegation to last weekend's annual general meeting of the Ontario Progressive Conservative Party. More than 1,600 delegates, alternates and guests registered for the three-day event between February 10th and 13th, at the Niagara Falls Scotiabank Centre. Four of our members also lent a hand as volunteers in the credentials and voting processes. (Thank-you Blair, Jenn, Bob and Tina).

We would like to congratulate Richard Ciano, who was elected Party President in the first three-way contest that the Party has witnessed in more than 60 years, and also Justin Van Dette our Toronto regional Vice-President, who was acclaimed.

Please watch Tim Hudak's keynote speech to the annual general meeting.

Watch an Ontario News Watch special: The Ontario PC Presidential Candidates' Debate

On January 18th, Ontario News Watch hosted an online debate between the three candidates running for President of the Ontario Progressive Conservative Party: Richard Ciano, Kevin Gaudet and John Snobelen. The debate (38 minutes in length) is archived here: http://bit.ly/xs9VrW