Drummond Report: Tough Choices the Result of McGuinty’s Failures

February 15, 2012

KITCHENER — Today, Don Drummond’s report exposed a Liberal spending crisis more severe than anything previously disclosed, requiring immediate action to start reversing the damage – and straight talk from political leaders, said Kitchener-Conestoga MPP Michael Harris.

“Mr. Drummond confirmed today what many Ontarians have known for some time – the relentless spending and confused priorities of this government are the root of the crisis we face,” Harris said.

“For years, the Liberal government spent money we didn’t have. The McGuinty/Duncan duo’s compulsive borrowing has put key programs and services families in Kitchener-Conestoga count on at risk.”

“Yet for months now, the Liberals have shown fear that if they level with people they’ll fall in the polls. I believe that if we don’t level with people now, Ontario will fall off a cliff.”

Further delays will only worsen the situation, Harris added, saying the task now is to hold the government to account and champion the changes needed.

To kick start a recovery and avert Ontario’s bankruptcy, the McGuinty government must:

• Declare a “quarantine zone” around the public purse. No more new, uncosted, one-off spending initiatives.

• If Dalton McGuinty declines any of Mr. Drummond’s recommendations, a new idea to save money must be put forward in its place.

• Act on the ideas put forward by the PC Caucus including a public sector wage freeze, introducing competition in public services and implementing pro-growth policies such as apprenticeship reform.

Longer term, Harris said, Ontario governments need to return to first principles: spend only what you have; set spending priorities on essential programs and services such as health and education; and exit all other areas of business that government has no business being in.

“It’s time to say the things Ontarians need to know – not just what they want to hear: We’re running out of money, and running out of time,” Harris said. “And, as we fight for a smaller, smarter government, we must also grow the private sector economy.

“The roots of Ontario’s current fix lie in both the economy and in the province’s record of failing to keep growth in government spending in line with revenue growth.” – Page 81, Commission on the Reform of Ontario’s Public Services


The Drummond Report

Drummond is only the latest person to sound the alarm about the Liberals’ spending habits:

• In December 2011, Moody’s Investor Service revised the outlook on Ontario’s current credit rating from “stable” to “negative” – a warning that the province’s rating could drop.

• In his 2011 report, the Auditor General signalled a possible credit rating downgrade, citing the Liberals large borrowing requirements as one of the main reasons.

• The Conference Board of Canada has said the Liberals are unlikely to reach their balanced budget target of 2017-18 if they maintain their current planned program spending growth of 1.7 per cent (Ontario’s Economic and Fiscal Prospects: Challenging Times Ahead, Feb. 2012).

McGuinty now has ideas from the Ontario PC Party and Drummond. It’s time to act.

• Drummond’s report repeats the Ontario PC Party’s call for arbitration reform, citing the need for specific, clearly-defined objective criteria for arbitrators.

• In particular, he states that “‘ability to pay’ criteria should be broadened to include economic and fiscal environment, and productivity criteria in arbitration awards/decisions” (373).

• The Ontario PCs and municipalities have repeatedly asked the Liberals to enact this change.

• Managed competition is another Drummond recommendation that the Ontario PCs have long championed. As an example, Drummond states “a significant opportunity exists for ServiceOntario to find new capital and expand services by leveraging private-sector investment and participation through competition” (389).

• Managed competition would require public sector unions to compete with private sector unions, not-for-profits and businesses to provide and deliver government services – producing savings of between 10 and 30 per cent, according to studies by Deloitte and the San Diego Institute for Policy and Research.

• With the goal of finding greater efficiencies, Drummond’s report further recommends that “the government should review existing agency mandates and functions” to determine which ones can be consolidated and which can be terminated (390).

• The Ontario PCs continue to call for an assessment of every one of the 630 provincial agencies, boards and commissions.

The Ontario PCs continue to offer a number of ideas to reduce wasteful spending:

• Put an end to year-end spending blow-outs and unnecessary grants;

• Reduce spending in all areas but health and education by 2 per cent annually until the budget is balanced;

• End corporate welfare, which costs over $2.5 billion a year; and • Shrink the size of Cabinet by 20 per cent.