Queen’s Park Watch: Drummond Report Calls for Lean Mean Public Service Machine

Yesterday, Don Drummond's Commission on the Reform of Ontario's Public Services marched down from Mount Doom to tell Ontarians that unless we put the brakes on spending we could be eurozoning by 2017. Fortunately all we have to cut is everything.

By Patrick Metzger • Illustration by Matthew Daley

If economics is the dismal science, Don Drummond is Ontario’s alpha geek of misery. His Commission on the Reform of Ontario’s Public Services report, released yesterday, was just as gloomy as promised, calling for major cuts to services if Ontario is to avoid a fiscal fiasco by the end of the decade.

Overall, the Commission estimates that if spending continues unchanged, not only will the budget remain unbalanced by 2017-2018, the deficit will grow to $30.2 billion, more than twice last year’s gap. So to avoid econo-pocalypse, something’s gotta give and it’s going to be services.

The report kicks off by examining the McGuinty austerity budget of March 2011, noting that “The Auditor General surmised — and we have confirmed — that there were no fully developed plans at the time of the Budget to secure all of the depicted restraint. If there are now plans under development within government to secure all of the fiscal restraint, they have not been provided to the Commission. ” In other words, the pain-free savings predicted were aspirational only, political fairy dust that looks pretty but doesn’t buy much in the reality-based economy (In defense of the Liberals, despite the triumphant anti-McGuinty crowing from the National Post and the Sun, the report says that Ontario spending as a percentage of GDP over the last eight years has been lower than than any other province except Alberta).

Drummond also takes issue with the budget revenue projections, saying that our economy has issues that aren’t going away anytime soon, and that incoming cash by 2017-2018 will only be $132.7 billion versus a predicted $142.2 billion (the Commission was specifically told they could not propose tax increases and thus have no wiggle room on the revenue side).

At a high level, the report recommends these annual program spending changes over the next five years: health care increases capped at 2.5 per cent, education (primary and secondary) increases capped at 1.0 per cent, post-secondary education increases capped at 1.5 per cent, social services increases capped at 0.5 per cent, and all other programs down 2.4 per cent.

Note that only health care gets an inflation-sized increase, but that’s a kick in the teeth for a portfolio that’s been seeing 6.5 per cent annual growth over the last eight years.

In total, the report recommends 362 reforms, pronouncing ominously that all of them must be implemented to get to a balanced budget in five years. Among the required changes are the scrapping of some programs close to Liberal hearts, including all-day kindergarten, tuition rebates for post-secondary students, and the “Clean Energy Benefit” that gives Ontarians a ten per cent rebate on electrical bills. (Of all the recommendations, McGuinty has so far taken just one off the table—all-day kindergarten.)

There’s much more than that, of course; the report is six hundred-odd pages of cheerless cost-cutting. That said, many of the recommendations are genuine efficiencies and not simple slash-and-burn savings, particularly in the area of health care. For example, with 1 per cent of Ontario residents accounting for almost half of health care expenditures, there there’s considerable opportunity to save by treating high-volume health care consumers at home rather than through expensive hospital visits. However, change itself takes planning, and costs time and money, of which we don’t have any.

While the premier has yet to respond officially to the report, enough was leaked out earlier to put him on his guard; high-ranking Liberals assured the public weeks ago that the next budget would be drafted by the government, not by Don Drummond. Commenting yesterday, Finance Minister Dwight Duncan referred to the Drummond recommendations as “part of the mix” in building a budget, not entirely aligned with the all-or-disaster message of the report’s authors.

It remains to be seen what this will mean to the Liberal minority, with the public likely disinclined to engage in the kind of belt-tightening that’s being demanded, an outraged and opportunistic Tim Hudak waiting to enter stage right, and an outraged and protectionist Andrea Horwath warning that the proposals are extreme at stage left. Election, anyone?