Ontario's Fiscal Freefall: Liberal vs. PC = Feet-first vs. Head-first

The more some things change, the more other things stay the same. The Liberal premier, finance minister, and energy minister have all announced their resignation from politics. The Liberal Party of Ontario is imploding. The province has fallen into a fiscal crisis. But Ontario’s Progressive Conservatives are doing a replay of the “we’re liberals too” campaign that left that party with opposition status in the 2011 election.

In the Progressive Conservatives’ 2011 election platform, the party duplicated the Liberal Party’s plank of balancing Ontario’s budget by 2017-18: “We will set priorities – and stick to them – to balance
the budget no later than 2017-18.” The platform did not show how the PCs would accomplish that. It did not provide information about what spending would be cut, or how revenues would be raised, sufficiently to balance the budget. In truth, the PCs had no plan, just like the Liberals.

Apparently, the 2011 election has taught the Progressive Conservatives nothing. The party recently has released a document titled “Paths to Prosperity” which sets out the party’s alleged vision heading into Ontario’s next election. Here is a complete quotation of what the party says in respect of balancing Ontario’s budget:

“Balance the budget before 2017. Ontario is scheduled to be the last province in Canada to balance its books. The others have made tough decisions. We must too.”

How much will the party cut spending? Silence. Will it raise additional revenues? Blank-out.

Here we go again. In it’s 2011 election platform, the Progressive Conservatives provided no explanation of how it would balance the budget by 2017-18. Now, still lacking a plan, it wants you to believe it could balance the budget before 2017.

What about the Liberal-PC 2017-18 original target date? Durham Region News reports on Progressive Conservative Party leader Tim Hudak’s comments yesterday about the budget deficit:

…the current plan of eliminating it by 2017-18 is “unacceptable. It’s too long. Ontario should be first. If we’re not first, we should be close to first” in eliminating its deficit. “We’ll be last.”

So, the Progressive Conservative’s own 2017-18 target is now being condemned by the Progressive Conservatives as “unacceptable”. Such a flip flop hardly inspires confidence. What might be an “acceptable” to the Progressive Conservatives next year? Balancing the budget in 2021? Who can say? With absolutely no plan to balance the budget in the first place, the Progressive Conservative budget balance target date is not a target date at all. It is, rather, a moving target.

The fact of the matter is that distant target dates are a scam. Parties that use them are implicitly admitting that they either do not know how they would balance the budget, or that they do not plan to balance the budget. In almost every case I have witnessed, all proposals to balance the budget by some future date are based upon a mere hope that there will be such great economic growth and inflation as to allow revenues to rise relative to expenses. Indeed, even the Harris government did not cut spending overall, and instead – like the federal Liberal government of the time – balanced the budget only because of increasing tax revenues.

Such a growth in revenues cannot be relied upon in the near or intermediate term. The world is in economic chaos. Industries and well-paying jobs are fleeing from North America to countries in which labour costs are relatively low. At home, our population is aging and, as a result, health care costs – the biggest item in the Ontario budget – are skyrocketing.

The Liberal Party has lost its privilege to govern this province, to be sure. However, the Progressive Conservatives appear to remain as undefined and hollow as ever as the next election approaches. Ontario is currently falling further into economic crisis. Replacing outgoing Liberals with Progressive Conservatives would be like crashing head-first instead of feet-first.

Of course, there is an alternative to staying the course and floating the province into bankruptcy. Earlier this year, I penned Freedom Party of Ontario’s “2012 Opposition Budget“. In recent days, the Ontario government released its economic update, setting out the latest budget figures. I am happy to announce that Freedom Party will soon release its 2013 Ontario Budget, incorporating the new data set out in the economic update. It will provide an honest and unambiguous explanation – with actual figures – of how a Freedom administration will balance the books if elected in the next provincial election (which many expect will be held in May, 2013).

There is hope folks. Stay tuned.