Drummond offers no real relief

by John Robson

Premier Dalton McGuinty is getting pseudo-tough on spending. He even paid Don Drummond $1,500 a day to chair a Commission on the Reform of Ontario’s Public Services, whose 362 sensible recommendations delivered a week ago won’t help.

Drummond was a wise choice as chair. A smart guy who was a senior federal finance ministry official in the crucial Martin-Chretien deficit-taming years, he’d give the most radical advice McGuinty and Co. might actually take. And he’d provide political cover by letting the government reject a few high-profile suggestions like scrapping full-day kindergarten, thus appearing as compassionate but fiscally prudent centrists rather than pawns of Bay Street.

The Drummond report also looked like good news for the public because it wasn’t just a quick-and-dirty lunge to balance the budget. It was about “value for money” (a cliche used 46 times) because, Drummond’s chairman’s message warned, “Ontario cannot count on a resumption of its historical strong growth rates … Spending simply cannot return to recent trends.”

This passage implies a long-overdue recognition that governments including Ontario’s are badly overextended. Unfortunately there can be no question of a “return to recent trends” because spending never departed from them. And it won’t, because the report represents business as usual under the guise of radical change. (For instance its much-touted recommendation to hold health spending increases to 2.5%… when the 2010 budget already pledged to reduce them to 3%).

As soon as this 543-page brick appeared, journalists reported that 105 of its 360 recommendations concerned health care, including detailed recommendations such as allowing pharmacists to administer “routine injections”, plus cliches like “health promotion” and “a system centred on patients” that governments have struggled vainly to deliver for decades. In short, smarter micromanagement, not markets. Been there, done that, got the deficit.

The whole report has this problem. For instance it hammers existing business subsidies as ineffective, then calls for a whole new set, And suggesting the Ontario Lottery and Gaming Corporation close one of two head offices and put slot machines elsewhere than racetracks is too picayune. The real questions are: Why is government even in the gambling business and why can’t it find economies private firms routinely do? On this vital subject the report is essentially silent.

Not that the premier would have listened anyway. In a speech six days before the report, McGuinty warned “our public-sector partners” that “We need to slow government spending down. It won’t be easy, but it is absolutely necessary.”

Why won’t it be easy? In his first full year in office program spending was just over $70 billion, interest payments topped $9 billion and the deficit was $1.5 billion. Eight years later it’s $114.6 billion, $11.4 billion and $15 billion. Yet the Drummond report expressly denies that spending is “out of control.” What would it look like if it were?

On paper, spending rose 63%. Even adjusted for inflation and population growth, it’s still up by a quarter. With citizens and governments richer than eight years ago, let alone 20 or 50, we should be asking “Are we there yet?” Are our demands on the state finally slackening? No, says McGuinty. They’re intensifying.

Why? Because our political class is convinced only ever-greater government efforts keep our economy and society from falling to bits. Hence Finance Minister Dwight Duncan’s pledge to save all-day kindergarten. As McGuinty’s early learning advisor Charles Pascal once claimed: “We can’t afford not to”.

It’s not Drummond’s fault his main audience thinks cuts cost money and lavish new spending saves it. But it is his fault his report is essentially static, examining what government does and suggesting specific improvements, when it needed to be dynamic, examining how government does things and why.

It’s not all foolish. Things like full-cost water pricing are desirable. But his chairman’s message feebly urged clearer program objectives and better “metrics” when, if governments could walk like that, they would have long ago. Besides, if we’re examining objectives, why is our provincial government a bookie, a bootlegger and a back pain specialist?

Sorry, guys, this is what bloated meddlesome government always looks like. It tries to do everything, does it badly and costs way too much.

Think they’ll pay me $1,500 a day to say that?

Playing a waiting game for the Ontario budget

by Christina Blizzard

First came the game of waiting for Don Drummond.

Everyone at Queen’s Park held their breath in anticipation of the former TD economist’s report on how government should cut expenses.

Last week he delivered. Now we’re back playing the waiting game.

For the next month, we’ll be speculating on what will be in the budget.

So just what was the whole Drummond exercise about?

We got a hint of that Tuesday when Premier Dalton McGuinty spoke to reporters before the MPPs finally returned to the Legislature after their long winter nap.

McGuinty set out the broad theme of how he’ll save civilization as we know it.

“If we must choose between horse racing and home care, we’re going to choose home care,” he told reporters.

“If we must choose between hanging on to the LCBO’s prime real estate and strengthening schools, we’re going to choose schools.

“If we must choose between funding Ontario Place and funding the places in Ontario that train our workers, our colleges our universities, our apprenticeship programs, we’ll choose our workers — every time.” he said.

Interpreting that politspeak to plain English, what it means is this:

Drummond threw out the red meat to set the critics in an uproar.

He suggested cancelling costly, high-profile programs that have become McGuinty’s signature items.

Full-day kindergarten, the 30% tuition cut to post-secondary students and home care are all costly, yet popular.

McGuinty’s made it clear full-day kindergarten won’t be cut. With his statement Tuesday, he seemed to be adding tuition cuts and home care to the list of untouchables. He’ll find other ways to find the cash.

Except you can only sell off LCBO real estate once.

That will save the programs in the first year, but what of the next? And the next?

Having racked up a $16-billion deficit and $200-billion debt, McGuinty is now going to ride to our rescue on his hybrid SUV to save us from bankruptcy?

Finance Minister Dwight Duncan warned that doing nothing isn’t an option.

Watch the budget to see if the government reneges on its election promise to cut corporate taxes, he said.

“None of this will be easy, but the status quo, not responding to the challenges, is simply not an option,” Duncan said.

PC leader Tim Hudak was sounding more comfortable in his own skin.

He was offering alternative solutions — small and large C — such as privatizing slots and casinos and having government perform only a regulatory role in gaming.

He’s sticking to his suggested public sector pay freeze, which he says would save $2 billion.

Duncan’s next big hurdle will be getting enough votes for his budget to pass the Legislature. If he backs away from deep cuts to public services and nixes corporate tax cuts, he should be able to woo the NDP’s votes.

NDP leader Andrea Horwath said she’s not considering a formal coalition with the Liberals.

“What we’re trying to do is make sure that the budget reflects the fact that the people of the province need life to be more affordable,” she said.

“They don’t want to bear the brunt of reckless cuts while they see CEOs getting top salaries and massive perks and while they see corporations continue to get their tax cuts.”

McGuinty said there’ll be no tax hikes.

Then again, is a user fee a tax hike?

We’ll find out in the budget.

I can’t wait.