As indifferent to the consequences as she is to the pain her government is inflicting on Ontarians, Kathleen Wynne shrugged off this week’s downgrading of the province’s credit rating by Standard and Poor.
The agency dropped its financial rating to A+ from AA-, citing its heavy debt burden and concerns about the province’s spending. The move will eventually increase Ontario’s borrowing costs, a problem for a government that continues to borrow even as it mismanages its finances.
Running yet another deficit, the government will send the accumulated debt to $298 billion by the end of the fiscal year. Interest payments on that debt are now some $11.4 billion, the province’s third-highest annual expenditure.
The lower rating follows a negative assessment by Moody’s Investors Service that came shortly after Wynne’s election last year. That agency downgraded its outlook on Ontario’s debt from stable to negative, indicating it, like anybody who’s looked at the numbers, has no faith in the government’s ability to bring its deficit under control. And certainly not by the extended date of 2017-18.
While Wynne has maintained her government will get a handle on its spending, waste and mismanagement, news of a generous deal with Hydro One employees gave lie to that again this week. Staff are to receive a three per cent raise over three years, a three per cent signing bonus and shares worth 2.7 per cent of their salaries every year for 12 years.
That’s the very organization, of course, that Wynne hopes to privatize, looting a public asset to pay for her fiscal bungling and, as this deal indicates, to pay off public sector workers for their unions’ support in her election bid. We can expect more payola – watch for hushed, backroom deals – in the future, whatever posturing Wynne has done in relation to, say, teachers.
In preparing to short-sightedly sell off assets, Wynne is prepared to sacrifice Ontario and its future for her own grasp on power. There’s no regard for the long-term interests of citizens. Oh, there’s lip service to infrastructure projects – pledging $130 billion to transit projects over the next decade, for example – but no indication of fiscal reality. The province doesn’t have $130 billion. It will have to borrow more. Wynne will not make cutbacks elsewhere to both reduce the debt and pay for infrastructure.
Beholden to the unions, she will not make the wage rollbacks and job cuts that are now essential.
Sooner or later, a responsible government will have to make cuts and do what’s right for Ontarians who have no stomach for deficits and increased taxes. With that in mind, the government will have to focus on job creation and growth in the real economy, while curbing its own spending, shrinking the civil service and rolling back public sector wages.
With business groups sounding the alarm this week over rising electricity costs – another poorly managed file – and a hollowed-out manufacturing sector unable to benefit from a weaker dollar, it’s clear that the focus should be on the productive part of the economy. That’s certainly not what we’re getting from the government, nor does Wynne appear either willing or competent to do so. With her actions, Wynne is essentially telling Ontarians to expect more of the same poor economic performance we’ve seen under her watch.