Implementing Drummond Report A Mistake
February 21, 2012 by Paul McKeever
The long-awaited 2012 report of the Commission on the Reform of Ontario’s Public Services (a.k.a. the “Drummond Report”) has been delivered. Ontario’s official opposition, and almost all journalists, are speaking about the report as though it is tough medicine that now must be swallowed if Ontario’s budget is to be balanced in 2017-18. Though the report does finally put to rest the nonsense – nonsense spouted by both Liberals and Progressive Conservatives until now – that Ontario is on course for a balanced budget in 2017-18, the report is not medicine at all. Ontario’s budget cannot be balanced by 2017-18 or any other year by attempting to implement the Drummond Report’s 362 recommendations, even could they all be deciphered and concretized. Consequently, all of the arguments you will hear among PC, Liberal, and NDP MPPs over the coming months – about how and how quickly the report should be implemented, and to what extent – will serve only to ensure that the action needed to solve Ontario’s fiscal woes never gets discussed.
In what follows, I first explain why all of the news reports about the Drummond Report being smart and good medicine are malarkey and why the Drummond Report utterly misses the mark. I then explain errors in government decision-making that must be ended if the government of Ontario is to get off of its current self-destructive course. Finally – not wanting to be only an eraser, but also a pencil – I offer up 7 broad policy ideas that should be the focus of the Legislature’s efforts if Ontario is to regain global competitiveness and, thereby, to balance its books more reliably, and without lowering Ontario’s standard of living.
THE COMMISSION’S MANDATE
The Commission on the Reform of Ontario’s Public Services (the “Commission”) was handed a 5-item mandate:
1. Advise on how to balance the budget earlier than the 2017–18 fiscal year;
2. Once the budget is balanced, ensure a sustainable fiscal environment;
3. Ensure that the government is getting value for money in all its activities;
4. Do not recommend privatization of health care or education; and
5. Do not recommend tax increases.
Nobody seems to have noticed, but the Commission did not comply with item 1 (i.e., the essential part) of its mandate. Its excuse: “Given the deterioration in the economic outlook since the 2011 Budget, we believe it is neither practical nor desirable to set an earlier official target for balance.” The Commission provided no explanation of why balancing the budget sooner than 2017-18 is impractical and undesirable, or of why 2017-18 is somehow a year in which a balanced budget suddenly becomes both practical and desirable. One can conclude only that – both the governing Liberals and the opposition Progressive Conservatives having promised during election 2011 that they would balance the budget by 2017-18 without cutting health care or education expenditures – the Commission felt that its recommendations would be less unpopular if it recommended less spending restraint based on what it believes will be higher 2017-2018 revenues.
THE COMMISSION’S ANSWER: IMPOSE SPENDING TARGETS
The Commission asserted that if the growth of spending continues as it has under the McGuinty government, Ontario would be running a $30.2B deficit by 2017-2018. Assuming as it did that Ontario would not fall into recession between now and 2017-18, and that the economy and revenues would continue to grow until then, the Commission’s overall recommendation was to impose five restraints on spending:
“Recommendation 1-1: We recommend the following annual changes in program spending out to 2017–18:
Health care — plus 2.5 per cent;
Education (primary and secondary) — plus 1.0 per cent;
Post-secondary education (excluding training) — plus 1.5 per cent;
Social services — plus 0.5 per cent; and
All other programs — minus 2.4 per cent. As in the example cited, this would imply an even bigger cut for everything except the fixed items referred to earlier; in this case, the cut would be in the order of 4.5 per cent.” (p. 106)
The Commission characterized its spending targets in political terms:
“In the 1995 election, the Progressive Conservatives under Mike Harris won power after running on a platform called the “Common Sense Revolution” (CSR)…With the exception of health care, spending was reined in; the two most dramatic moves were a 22 per cent cut in social assistance rates and a downloading of program responsibilities to municipal governments…Strong economic and revenue growth after 1995 helped the province balance its budget by 1999–2000, by which time spending had begun to rise again. Although the Harris government retains its reputation as one that made deep and lasting spending cuts, the reality is rather different. From its 1995–96 peak, program spending fell by only 4.1 per cent and stayed below the peak for only three years…just to meet the government’s goal of a balanced budget seven years hence, the government will have to cut even more deeply from its spending on a real per-capita basis, and over a much longer period than the Harris government did in the 1990s…” (p. 112 and p. 121)
Clearly, the intent of comparing the Commission’s spending targets to those of the Harris government was to create the impression that the medicine it was prescribing would taste awful. The psychological effect for some will be Buckleyesque: to convince the reader that the prescribed medicine could work because it would taste awful. For others, the psychological effect will be an increased willingness to embrace tax increases so as to avoid tasting bad medicine.
MEETING THE TARGETS: 361 VAGUE RECOMMENDATIONS
With the exception of a few de minimis recommendations for raising more revenue (e.g., charging for parking at GO Train stations), the balance of the Commission’s report was comprised of recommended ways of controlling spending and meeting the five spending targets set out in Recommendation 1-1 (see above). However, for numerous reasons, the recommendations were of questionable usefulness.
Few if any of the 361 implementation recommendations state how much money the recommendation will save or raise. That is perhaps understandable (which is not to say forgivable), given that the recommendations themselves are in most cases little more than utterly vague suggestions peppered with mind numbing iterations of words and phrases like “streamline”, “integrate”, “leverage”, “rationalize”, “consolidate”, and, of course “find efficiencies”: the buzzwords common to countless other commission reports collecting dust in the government archives.
Some of the recommendations are worse than vague, altogether off-loading to others, in the future, the role of the Commission. For example:
“Recommendation 5-104: Establish a Commission to guide the health reforms. The scale of reform we propose is vast, dealing with organizational, clinical and business issues….Given that the scale of reform being proposed in this report extends well beyond hospitals, a new commission should be established to guide the reforms, drawing from a broad range of stakeholder communities, including providers and citizens/patients.” (p. 172)
“Recommendation 11-1: Government needs to publish an “economic vision” for Ontario.” (p. 302)
and, in an homage to Sir Humphrey Appleby:
“A steering committee should be established [that would be]…the focal point for the government-wide work necessary to develop implementation proposals for specific reforms and for cross-cutting measures addressing themes that touch on multiple sectors…The steering committee would direct ministers and their ministries to develop proposals and implementation plans, and provide a schedule for reporting these proposals to Cabinet. The steering committee would also guide a number of working groups created to conduct research and analysis of the major cross-cutting issues: labour and compensation; overlap and duplication; new delivery models; and optimization of assets. These groups would be a resource both to the steering committee and to ministries as they develop specific transformation proposals that have implications for other ministries, as many of them will. The steering committee could also commission independent research to inform the working groups on key areas of analysis.” (pp. 140-141)
In other words, to control costs, the Commission recommended the formation of commissions or committees – some having subcommittees that each commission independent researchers – to find ways to eliminate overlap, duplication, and inefficiency. One wonders what, exactly, the Commission thought its role was.
Many of the recommendations – especially the longer-winded ones – are downright mealy-mouthed. For example:
“Recommendation 5-70: All Family Health Team physicians must begin engaging in discussions with their middle-aged patients about end-of-life health care…Having a clear understanding by all parties of patients’ wishes regarding end-of-life care offers the ability to put in place a plan to provide the care necessary to meet the patients’ needs and provide the services in a timely manner when the need arises…Informing people about the importance of using an advance health care directive (also known as a “living will”) as opposed to the last will and testament as the legal document to express one’s end-of-life care wishes is essential.” (p. 190)
The unwritten meaning of Recommendation 5-70 is that people who have earned assets and savings should not get the tax-funded health care that is extended to those who lack assets and savings. Those who have should be encouraged to use up their own assets and savings to pay for their care rather than leaving their assets and savings to their heirs. Also, the Commission is implying that it is “essential” to encourage as many people as possible – while they are still healthy, middle-aged, and feeling immortal – to draw up Do Not Resuscitate instructions (“DNRs”) so that if they end up in a situation where their continued existence depends upon the provision of life support, the government can just let them die and save the expense.
Other recommendations were more blunt about wealth redistribution. For example:
“Recommendation 5-88: Link the Ontario Drug Benefit program more directly to income. Almost all of the cost of prescription drugs for seniors is now covered by the provincial government….A minimal step would be to make the portion of pharmaceutical costs paid for by seniors rise more sharply as income increases. The other, preferred, option is to sever the link to age and instead link the benefit to income only.” (pp. 195-196)
In other words: fewer or no publicly delivered drugs should be given to those who pay for them (with taxes), and more such drugs should be given to those who do not pay much if anything for them. Or: those with more money should buy their drugs in the private sector, but should also pay for drugs delivered by the government to those with less or no money.
It would be a mistake, however, to conclude that the report merely echoes previous commission reports to take money from the productive, and then leave them to fend for themselves. In fact, the report amounts to a proposal for rationing across the board. Perhaps the most dramatic example of this is the report’s brief reference to further changing, and corrupting, the role of the physician and the physician’s relationship to the patient:
“Recommendation 5-86: Medical schools should educate students on “system issues,” so they better understand how physicians fit into the health care system; for example, how to deal with patient needs efficiently and effectively, but using fewer resources by connecting different parts of the health care system.” (p. 195)
and, putting it more bluntly:
“Physicians’ primary goal should be prevention and keeping people out of hospitals.” (p. 24)
In other words, the physician is to be trained and required to focus on keeping health care costs low, as the physicians “primary goal”. Helping the sick and injured is to be merely secondary.
Of course, the idea that physicians first and foremost should be guardians of the public purse is not entirely new: implicitly, that has been the physicians’ primary goal since the payor-payee relationship between patient and physician was severed by the Progressive Conservatives in 1969 with the banning of private health insurance and payments, and the establishment of a tax-funded government health insurance monopoly, OHIP. The physician-as-rationer model is entirely in keeping with the economic reality of socialized health care, which was recognized by its proponents before the government monopoly was imposed. Speaking in 1979 at an “S.O.S. Medicare” conference to the issue of the spiraling costs of providing “free” health care to all residents on demand, Tommy Douglas explained:
“I am concerned, as many people are, about Medicare. Not with its fundamental principles, but with the problems which we knew would arise.
And those of us who talked about Medicare back in the 1940s, and 50s, and 60s, kept reminding the public that there were two phases for Medicare. The first was to remove the financial barrier between those who provide health services and those who need them. And we pointed out, repeatedly, that that phase was the easiest of the problems we would confront. In governmental terms, of course, it means finding revenue, it means setting up organizations, it means exercising controls over costs. But, in the long term it was the easiest problem.
Phase number two would be the much more difficult one. That was to alter our delivery system so as to reduce costs and so as to place the emphasis on preventive medicine. But I think what we have to apply ourselves to now is the fact that we have not yet grappled seriously with the second phase. We must now move increasingly toward group practice. Whether it’s community clinics, co-operative clinics, clinics set up by the doctors themselves. But the need for group practice so as to make possible the practice of preventive medicine. Only in that way are we going to be able to keep the costs from becoming so excessive that the public will decide that Medicare is not in the best interests of the people of this country.”
To that end, the McGuinty government has been encouraging physicians and other health care providers to enter into group practice and has been increasing efforts to keep the healthy healthy, by such nanny-state measures as offering or requiring a broader range of inoculations, smoking bans, eliminating junk foods in school etc.. The Drummond Report essentially recommends more of the same, implying that the whole socialist health care monopoly will fail if the province cannot – through increased preventive measures – reduce the number of sick, injured, and dying. Of course, the Drummond Report comes up with no explicit proposals for how to make people immortal, so as to avoid the inevitable medical costs associated with the last few days, weeks, or months of dying. Hence the Commission’s “Logan’s Run” inspired focus on such things as DNRs: literal sacrifice of the patient to save the system.
Some of the Commission’s recommendations have a disturbingly Orwellian quality:
“Recommendation 5-17:…identify each LHIN’s high-use population on an annual basis, including their specific demographic, socio-economic, diagnostic and procedural characteristics. […]” (p. 180)
Note that this particular recommendation is not about keeping track of individuals’ respective rates of use of medical services. Rather, it is about assigning individuals to various collectives defined by their “demographic” (Race? Sex? Sexual orientation? Religion? Place of birth?) characteristics, and by how much money or political power they have, and then determining which collectives, so created, are “high use”. There can be only one policy conclusion resulting from creating collectives and deeming all members of a collective to be “high use” because some individuals within the collective use a lot of medical services: giving different rations of services to individuals depending upon which collective they belong to. In other words, assigning different rations to people on the basis of such things as their race, sex, sexual orientation etc., notwithstanding the particular medical needs of any given patient. Recommendation 5-17, if implemented, ultimately will allow health care to be allocated along racist, sexist, and similar “classist” lines, all in the service of a something-for-nothing, envy-enraged, de-humanizing cultural-collectivist communism. In fact, the process has already begun with the quiet expansion of Community Health Clinics (“CHCs”) that exclude people who do not satisfy certain genetic, national, or linguistic criteria from using their medical services.
THE FLAWED PREMISE OF THE REPORT
The report correctly identifies the fact that the rising Canadian dollar and the relatively inexpensive cost of labour in Asia has encouraged businesses to minimize losses and maximize profits by leaving Ontario and producing in Asia the goods and services we consume in North America. However, the report is silent about the governmental decisions that leave Ontario unable to cope with a high dollar and unable to compete with Asia as a locale for the production of goods and services. Instead the report essentially proceeds on the deeply flawed, fundamental premise that Ontario will remain unable to compete with Asia and other low-cost jurisdictions. That premise leads the Commission to the conclusion that, as a result, Ontario will suffer from relatively small growth for the foreseeable future. Implied in that premise of permanent uncompetitiveness is a value judgment: that Ontario should not alter the status quo even if it would allow Ontario to compete with Asia; that Ontario should remain a high-cost jurisdiction. Willing to remain uncompetitive within the globe so as to preserve the current government-influenced allocation of winners and losers within the province, the report focuses narrowly on the question of how a systemically uncompetitive Ontario can remain uncompetitive and produce relatively little yet balance its budget.
The commission’s flawed premise of uncompetitiveness leaves the report powerless to guide government policy in a way that will restore and maintain Ontario’s fiscal health. Even if all of the report’s recommendations can be deciphered, concretized, and implemented, and even if the budget is balanced and somehow remains balanced, Ontario will find itself continually whittling down health care and education rations as revenues dry up and borrowing ceases to be an option. Addressing Ontario’s deficit by way only of spending cuts or tax increases is, and will remain, akin to applying a tourniquet to slow the bleeding from a self-imposed wound. If the wound – Ontario’s legislated global uncompetitiveness – is not operated upon soon enough, the patient will die from the blood loss.
Paul McKeever, in 2003, warning that things were heading the way they have in Ontario.
The quantitative measures set out in the Drummond Report fail because the essential cause of Ontario’s fiscal woes is not quantitative. It is qualitative. Specifically, the uncompetitive status quo results from flaws in the way the Ontario government is determining facts and evaluating potential courses of action.
FLAWS IN FACT IDENTIFICATION
The facts of reality, and the approach used by the Ontario government to identify facts, lie at the base of all governmental activity. At this most fundamental level, the Ontario government is failing. The result is that government resources are too often allocated to the solution of problems that do not exist, and too often allocated to ineffectual solutions to problems that do exist.
Too often, the Ontario government operates as though all facts of reality are or can be dictated by what one decides them to be. Too often, crime is said to be a growing problem not because crime rates are actually up, but because people think they are up or feel as though they are up. Economic calculations and planning often erroneously take into account aggregate measures of “confidence” in the economy, giving such confidence the status of proof of the actual status of the economy, akin to reports on actual, demonstrably provable indebtedness, crumbling physical infrastructure, cash flows, et cetera.
The reality is that some facts – metaphysically given facts, as opposed to man-made facts – cannot be altered by, and are not the product of, anyone’s thoughts or feelings or opinions. In all of its operations and departments, Ontario’s government needs to focus exclusively on the facts, and not upon polls or reports about what people – by way of ignorance, unwarranted emotion, or whim – believe the facts to be. In short: the government must accept the primacy of existence, and reject practices founded upon the erroneously assumed primacy of consciousness.
Even where the government recognizes that wishing does not make it so, the Ontario government, perhaps tainted by a paralyzing radical skepticism, too often gives to arbitrary claims the status of facts. As one crucial example, the “take home message” of the SARS Commission report was that the government embrace the “precautionary principle”: the idea that something should be considered harmful unless and until it is proven to be safe. Since the issuance of that report, the government has implemented the principle in many or all ministries. The precautionary principle now pervades and corrupts all government decision-making. Pursuant to this principle, the government of Ontario now is liable to take action in response to virtually any fear that takes hold in the population, from the alleged harmfulness of WiFi networks, to the fear that human productive activity will cause catastrophic climate change, to the fear that a mix of pesticides will be harmful to health, etc.. In these and other cases, the government irrationally is outlawing various forms of productivity (e.g., bans on pesticides approved by Health Canada for which there is no compelling evidence of harm to humans), and committing Ontario residents to massive expenditures (e.g., forcing Ontario residents to pay above-market rates for “green” energy) not because it has evidence of harm, but because it has no evidence of safety. The precautionary principle raises any arbitrary assertion of harm to the equivalent of a demonstrably proven fact, demanding that government prove the null hypothesis, or else impose regulations, bans, taxes and fees, monopolies, and other endeavors costing in some cases billions of dollars. In truth, the precautionary principle has been adopted as an epistemological excuse for public sector empire building, but it is utterly irrational and anti-scientific. To the extent it continues and spreads as a guiding principle, Ontario’s government will continue to dedicate resources to combating non-problems, leaving it with fewer dollars to address problems that can be proven, with physical evidence, to exist.
As another example, consider that the Ontario government has embraced such things as the funding of faith-based efforts aimed at reducing crime rates. In practice, this amounts to giving tax revenues to private religious organizations, which then independently and unaccountably divvy up the money among affiliated churches, allegedly for the purpose of encouraging youth find a god, obey the god’s divinely communicated commandments, and thereby decide against engaging in criminal activity. Leaving aside the obvious impropriety of using taxpayer dollars to finance religious activity, there is no scientific evidence of any positive correlation between being encouraged to believe that a god exists and requires obedience, on the one hand, and complying with man-made laws on the other. Indeed, there are several spectacular examples in recent memory suggesting a negative correlation, including terrorist activity, honour killings, and the like. Decisions to fund these efforts are founded not upon a rational consideration of evidence, but upon feelings or faith. As with the precautionary principle, faith offers up the unprovable as fact. Logic and science rightly bar from consideration such appeals to authority as arbitrary claims. If government continues to regard faith as a means of deciding what is and what is not – and of deciding what will work and what will not – the government too often will commit resources to non-problems and non-solutions, leaving it with decreasing funds to address demonstrably provable problems with demonstrably effective responses.
Such mysticism has also crept into enforcement. A few years back, government resources were spent investigating an allegation that a young autistic school girl was being sexually assaulted by a man living in her home. The investigation was commenced because a public school teacher, a principle, a school board, and a Childrens’ Aid Society thought it appropriate to act upon a mystically-derived tip from a psychic. No man even lived in the house. A family was essentially terrorized by a state mechanism that, so far, refuses to disregard mystical bull when making decisions about investigations and enforcement. The McGuinty government has done nothing to set evidentiary standards or guidelines, despite the revelation of such irrational waste and injustice.
The epistemological take-home message is clear and obvious. Government must begin to discard from consideration any claim not verified with physical evidence. Without an understanding of the mechanism by which a harm is being caused, it must take no steps to intervene. Correlation must not be accepted in lieu of causation. Claims about supernatural signs, fears, whims, faith and consensus should be given no more regard in the policy making process than they have in the scientific process. A failure to consider only demonstrable facts, as determined by physical evidence scrutinized solely by a logical process of thought, will lead to an unlimited array of foolish and wasteful government expenditures.
FLAWS IN THE EVALUATION OF POSSIBLE COURSES OF ACTION
Properly identifying facts, and discarding from consideration all falsehoods and arbitrary assertions is a start, but Ontario’s government must also establish proper criteria to act upon the facts. Those criteria must be founded upon the essential nature of human individuals.
Every such set of criteria implies underlying assumptions about the nature of human beings. However, at present in Ontario, those assumptions are being founded not upon fact but upon falsehoods or arbitrary assertions.
The Ontario’s government’s essential flaw in this regard is an implicit assumption that adult human beings are not capable of independent rational thought and action concerning themselves and their dependents. Their nature, it is assumed, is akin to that of a child or, worse, a beast whose actions – if left unchecked – would be guided by destructive physical instinct. Accordingly, human nature is treated not as a thing to be facilitated, but a thing to be overcome through threats of fines and imprisonment. The Ontario government has accordingly taken on the role of shepherd or nanny, applying carrot or stick to have the governed act contrary to what it believes is human nature.
However, the demonstrable evidence is to the contrary of the government’s current conception of human nature. It is demonstrably provable that human beings lack the instincts upon which other animals’ survival is largely dependent, and that human beings must properly identify facts, and act upon them in ways that, in both the immediate and long term, will ensure their survival and allow them to achieve the values – not only material goods but relationships and other spiritual values – upon which the achievement of their own happiness depends.
This is not to say that every individual chooses to act consistently with human nature. Some fail or refuse to distinguish fact from falsehoods and arbitrary assertions, leaving them unable to know what decisions and actions they should take. Some assume in a social setting criteria for action that, were they alone and not saved by others, would undermine their survival and happiness. But, in the vast majority of cases, such people so err because they have chosen to do so, not because human nature condemns them to misery and death.
By confusing human tendencies (e.g., in particular, the tendency to choose to act according to ones nature, or the tendency to choose not to do so) with human nature, the government has been left with policy criteria ill suited to the actual needs of human beings living in accordance with human nature. Taking on a maternal role to save those adults who fail or refuse to choose to live as human nature requires them to live, Ontario’s government has left a growing percentage of the population with a decreasing need to take on the role and responsibilities of thinking, productive, adults. It has thereby also increasingly converted a peaceful and society of consensually interactive, productive and responsible adults into a family of siblings; siblings functioning not as adults, but as children. Seeing themselves and their neighbours in that way, everything possessed by ones neighbour increasingly is being perceived as a gift conferred on a preferred sibling by mother government. At a time when mother government’s budget is widely known to be in trouble, every such sibling is viewed as another mouth for mother to feed, hence a threat to ones own survival. Xenophobia, envy, hatred, and violence naturally will result, as will calls for mother government to take more from those who produce, to give more to those who do not, and to crack the whip ever harder and ever more frequently to ensure that all mother’s children obey the rules pursuant to which mother government allocates goods and services.
Children – human beings whose every need is provided to them by their parents – do not engage in the inventive and productive efforts that give rise to an economy and to the creation of the valuable goods and services upon which Ontario’s standard of living depends. To the degree that a society views itself as a family of dependent children, its economy will be a failure, and the fiscal situation of its government will be in jeopardy. Ontario must stop relieving healthy and able-bodied adults of the responsibility to think, to choose, to produce valuable goods and services, and to assume responsibility for their personal survival and happiness. It must stop infantilizing the governed.
Ontario also must also do a better job of creating the conditions necessary for adults consensually to exchange goods and services for their own mutual benefit: it must do a better job of preventing everyone -whether in the private sector or in the public sector – from taking another person’s life, liberty, or property without his consent. Policing cannot concern itself – as it currently does – only with keeping the peace. It must begin more seriously to fulfill its responsibility of defending private property holders from prohibited uses of their land and other property.
Without an environment of personal responsibility, in which relations among producers and consumers are consensual, and in which the lives, liberty and property of all is defended effectively and justly, Ontario will undercut its desirability as a place for the production of goods and services consumed on this globe. As the Drummond Report points out, time is of the essence. The longer we remain uncompetitive, the greater the obsolescence of our physical and intellectual capital. If our natural and human-made physical resources and the skills of our residents are not to wither to the point of valuelessness, the Ontario government must begin limiting itself to a consideration only of fact, and to action criteria founded not upon the tendencies of some, but on the human potential of each.
With respect to policy, the government must be prepared to gore sacred cows, and to step over lines in the sand. For the good and future of each and all, it must prepare for vested interests to express outrage and must ready itself to deal justly, swiftly, an effectively with any opponents of change who resort to violence and destruction in protest. In short, Ontario must choose to win, rather than merely choosing to cope with the fiscal fall-out of maintaining the uncompetitive status quo. To that end, and to begin the dialogue, the broad outline of a number of bold and necessary policy changes are set out below.
THE BIG 7: RESTORING A GLOBALLY COMPETITIVE AND PROSPEROUS ONTARIO
Establish a mechanism for Public-Private Pay Equity: The single biggest cost of government – hence, to taxpayers – is the wages and benefits paid to public sector workers. When defending decisions to pay the leaders of the province’s public agencies, boards, commissions, or crown corporations large six or seven figure salaries, the Ontario government normally claims that salaries and benefits offered to public sector CEOs need to match the rates being paid in the private sector if qualified talent is to accept public sector posts. Inexplicably, that argument is absent wherever it is found that wages and benefits paid to public sector workers exceed the wages and benefits paid to private sector workers doing the same kinds of work. If the principle applying to public sector CEO wages and benefits is sound, attracting qualified workers to fill public sector positions should not require public sector jobs to pay more than their private sector equivalents. Accordingly, Ontario should introduce a Public-Private Pay Equity Act to impose caps on government salaries and benefits based on the average salaries and benefits paid for similar work in the private sector.
Eliminate Government-imposed Labour Monopolies: Ontario labour laws are preventing Ontario residents from competing with workers in other jurisdictions. The result has been a flight of jobs from Ontario (the most recent example being the loss of hundreds of jobs at the now-closed Electo Motive plant in London, Ontario). Ontario’s Labour Relations Act, 1995, gives the members of labour unions the exclusive right to bid for and obtain certain jobs. In practice, even if they are unable to come to terms with an employer, nobody else is allowed to do so, with the effect that jobs too often move to another jurisdiction.
Where an employer and employees see mutual benefit in collective bargaining as opposed to introducing individualized contracts between the employer and each employee, the law certainly should set out policy to ensure that such bargaining is carried out in a procedurally just way for all involved. However, labour monopolies no longer should be imposed by law. Every individual in Ontario must be made free to offer his or her services at rates competitive with those demanded around the globe, whether or not a union of employees has chosen to withhold its services as a bargaining tactic (i.e., to strike for some period of time).
Allow Competition with the Government’s Non-Enforcement Ventures: Some functions of Ontario’s government concern themselves solely with purely governmental functions, such as policy research and law enforcement. Such positions, by their nature, require the employer to be the government. They are roles akin to the referees of a game, not akin to the players. However, Ontario currently involves itself as a player in numerous areas previously the sole domain of the private sector, including health care insurance, education, liquor distribution and retailing, gambling, and electricity production and distribution. In some cases (health care, gambling, liquor) the government has banned competition. In other cases (e.g., education) the government has tilted the playing field in its favour by requiring consumers to pay taxes for government services even if the consumer would rather purchase the same service from a private vendor. Privatization of such segments of government endeavor are not necessary. However, allowing and facilitating fair competition with such government services will ensure that government involvement does not introduce wages and prices that are not globally competitive. To that end, the government must take steps to eliminate barriers to fair competition from the private sector in all such areas of endeavor. Among the required steps: eliminate government monopolies on health care, liquor, and gambling; eliminate tax funding to government ventures that are in competition with private sector suppliers; provide subsidies to neither public nor private sector suppliers of the same good or service; restore the consumer’s role as payor, so that public and private providers of the same good or service will attempt to win the business of the consumer by better meeting the needs and demands of each consumer.
Eliminate the Minimum Wage: Ontario’s minimum wage law makes it illegal for an employee to work for less than the rate set by the government of Ontario. The effect is that the government of Ontario literally sends to other jurisdictions all work having a value, on the world labour market, of less than that set out by the minimum wage law. The government should not be in the business of sending labour opportunities abroad. It should repeal the minimum wage and allow Ontario workers to compete with those living everywhere else on the globe.
Tax Consumption, Not Production: A primary benefit of taxing consumption is that earners can save and invest any unspent earnings in wealth-producing endeavors paying interest or dividends. As the old saying goes: You can’t take it with you. Returns on money so invested ultimately will be used to buy goods and services and those transactions can all be subjected to a single transactional tax (i.e. a tax on the purchase of goods and services). More money saved and invested will lead to more production and higher tax revenues without tax increases.
Replace Goods and Services Welfare Provisions with Monetary Payments: There is no advantage to consumers, or to the economy, or to those who do not provide fully for themselves (i.e., the underproductive), of providing the underproductive with goods and services instead of with the money they need to buy goods and services. Provisions of governmental assistance should take the form solely of the provision of money to recipients. The government should not be building, owning and operating houses, transportation systems, daycare facilities etc. and providing them to the poor at below-market rates. Assistance currently given in the form of such goods and services should be monetized and provided as money to recipients who can then allocate their financial assistance in accordance with their needs. This will reduce the likelihood over over-assistance, and reduce the size and cost of the government’s welfare administration.
Reduce, Focus, and Redefine the Role of Municipal Government: All authority held by municipal governments is delegated to it by the province. In practice, the provision to municipalities of broad by-law making powers has led to a province-wide patchwork quilt of irrational and, in some cases, arguably unconstitutional by-laws, such as laws against camping and barbequing on ones own land, against cutting down ones own trees, against parking ones car on ones own land, against using ones house as a place of business, against selling children squirt guns (see Port Perry) et cetera. Whatever the reasons in each given municipality, it is clear that irrational laws are most prevalent at the municipal level. The Ontario government should reduce the breadth of the law-making authority it grants to local governments, leaving municipalities primarily an administrative role, rather than a legislative one.
The Drummond Report essentially recommends that the budget be balanced by increasing the efficiency with which the government does just about everything it currently does. The Commission, our Liberal, PC, and NDP MPPs, and almost all of Ontario’s journalists think that implementing all of the recommendations will or would balance the budget by 2017-18. The reality is that if the Ontario government were actually to become more efficient at doing what it does, it would do more of what it does. It would make Ontario even more uncompetitive. Yes, the budget must be balanced, but – even if it could be balanced by implementing the Drummond Report – the result would be an ever-decreasing standard of living, and an ever-less globally competitive Ontario. Socialism got us into this mess. Better socialism will only get us into a worse one. It’s time to try capitalism, for a change.