Ontario waits with bated breath as the budget gnomes toil away in the bowels of Queen's Park. The big question is, who's going to get hurt the most?
With last year’s fall session truncated by the election, Ontario MPPs finally took their seats this week in the first real session of the new provincial parliament. Beyond the first-day-of-school excitement (“Kegger at Hudaks!” “OMG did you see what Dalton is WEARING?”), the dynamic will be different this year, with the Liberals being a more vulnerable minority and the Drummond Report dangling over everyone’s head like a pinata full of dog crap; nobody wants to wreck the party but it’s just going to hang there stinking up the place until somebody takes a swing at it.
The upcoming Big Event will be the provincial budget in March. In that regard, the Liberals are already backing away from some of the more aggressive belt-tightening measures proposed by Drummond, with the government press release advising that the report “will inform the 2012 Budget. The McGuinty government will decide how to move forward.”
Thus far, the Liberals have been able to postpone hard decisions on service cuts by setting up commissions and announcing a few easily digestible initiatives, like selling the LCBO headquarters and ending horse racing subsidies.
The budget, however, will force the government to prove whether they’re serious about deficit-fighting, or whether they’re willing to sacrifice fiscal stability to try and keep their poll numbers up. The premier may have already picked out the corner he’s going to paint himself into, saying the Liberals won’t heed the Drummond Report and scrap the expensive all-day kindergarten that has become one of McGuinty’s signature programs. The report, of course, says that if all its recommendations aren’t followed, Ontario won’t see a balanced budget in five years, which, if accurate, (and this is by no means agreed upon) means McGuinty will have to find efficiencies elsewhere if he wants to keep his taxpayer-funded babysitting service. It also prompts questions as to what other Drummond advice the Grits will find too spicy for their dainty palates, and what they might do instead.
Other options are limited. Burned by the “Taxman” label the Tories slapped on him during the election, McGuinty said on Tuesday that there will be no tax increases (although the door seems to be open to cancelling next year’s planned corporate tax cut). Whether the “no new taxes” promise applies to other revenue tools that still cost you lunch money, like program user fees and Drummond-recommended hikes in hydro and water rates, isn’t clear.
What the budget won’t do is spark an immediate election. Opposition, both left and right, is shrewd enough to recognize that the Drummond-based budget scenario should be a political bonanza for them and a train wreck for the Grits, no matter how it plays out.
If McGuinty takes a hard line, he loses the public’s love and the next election. If he doesn’t, our tumescent deficit keeps growing, with even nastier effects down the line. There’s no benefit to Tories or NDP in forcing an election while McGuinty is still measuring the rope, when in a couple of years his feet will be dangling over the floorboards. Even better, whichever party succeeds in salvaging the province from the wreck of the SS Grit can stay Teflon for a good decade or so by blaming the Liberals for everything from high gas prices to genital warts.
Aware of this, the parties are already positioning themselves. This week, Tory finance critic Peter Shurman called for the premier to implement all of the Drummond recommendations or announce what he’d do instead, while his boss Tim Hudak warmed up for some Harrisball, demanding an immediate public-sector wage freeze.
NDP leader Andrea Horwath played the populist from the other side of the chamber, decrying Drummond recommendations that would “load up families with all kinds of extra cost burdens.”
Welcome to 2012: even if we don’t get smitten by some Mayan tsunami or supervolcano, we’re still going to take a hit from the (metaphorical) asteroid of austerity budgeting. And while that may be tough on you and me, it could put the government right out of a job.