The Ontario government is spending more money than it has. Spending more than the economy can keep up with. Spending more than even the inflation argument can attempt to justify. Spending more than we can afford to pay.
Such profligacy is hardly a surprise to anyone paying attention – a whole lot of people, if the last election is any indication – and par for the course with many governments, from right here all the way to Ottawa.
This week’s report from provincial Auditor General Bonnie Lysyk puts the spotlight firmly on the questionable leadership of Kathleen Wynne and her group.
Ontario’s debt continues to grow faster than the province’s economy, says Lysyk, with negative implications for the province’s finances. The government has failed to provide the public with a plan to deal with its ongoing annual deficits, yet alone the accumulated – and accumulating – debt, the financing charges of which outstrip what the province pays for postsecondary education, for instance.
“No matter which measure you use – total debt, net debt or accumulated deficit – this is a concern for the province for several reasons, including how much money will be available for providing services to Ontarians in future years after interest on debt is paid,” said Lysyk in releasing her 2014 report.
She recommends that the government work towards developing a long-term total debt reduction plan that is linked to meeting its target of reducing its net debt-to-GDP ratio to its pre-recession level of 27 per cent. It currently stands at about 40 per cent.
Although the government projects that it will not have a deficit in 2017/18, until then, it will still need to borrow to finance annual deficits, fund infrastructure investments and re-finance existing debt, pushing today’s liability of $267 billion to a projected $325 billion by 2018 – “That’s about $23,000 for every single resident of Ontario.” To date, the government has offered no evidence it will meet that timeline for balancing its budget.
Lysyk was also critical of the government’s failure to provide that kind of information to the public.
Public debate is crucial, as debt-servicing costs crowd out other spending options.
More specifically, the Auditor General took issue with the government’s handling of so-called private-public partnerships for building infrastructure projects such as hospitals, determining that Ontarians are out an additional $8 billion due to the practice.
She also painted an unflattering portrait of failures to protect residents from escalating energy prices, from massive increases in payouts to providers even as the market rate for electricity dropped to a lack of oversight by the Ontario Energy Board when it comes to monitoring the rates set for natural gas.
For example, although nearly $2 billion was spent to install new “smart” electricity meters across the province, the government’s objectives of reducing power demand at peak times and eliminating the need for new sources of power are not being met. In essence, all we have to show for buying new meters and time-of-day billing is unjustified higher rates.
The examples on display in this week’s report, and the many others that have come to light – along with the majority yet to be discovered – are what we’ve come to expect from the entitlement blight in the public service, and the incompetence of those who are elected to oversee the system.