Ontario Budget - Balancing the Books

[haljackey]

We all know our province is deeply in debt and is bleeding even more these days. What can we do to balance the budget, and eventually run a surplus to pay off our debt?

I for one think it's time to get rid of niceties and operations that are not essential to the public well-being. For example, getting rid of the Catholic School System is a start... Think about the amount of money we would save and there would be no loss to public education.

We also know Ontario municipalities are in bad shape financially, many pledging to keep taxes low to attract investment during these troubling times. They don't have a dime to spare, and need to find new sources of revenue. How about getting just about everything, including religious institutions, to pay property taxes?

Things like health care cuts, transit fare hikes or road tolls would face huge public opposition.

I don't want us to take on any more debt. If they want to spend more, then they must find more sources of revenue to pay for it.

The Baby Boomers put us into debt, now it's up to us to climb out of this hole they dug for us!

End rant.


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Responses to former comments:

Rebuilding Infrastructure is a +, maybe even some new stuff too. We have been planning high speed rail since the 1960's... Also is London ever going to get a freeway?

Decriminalize ALL drugs? I don't know about that one, but there are certainly some that CAN be decriminalized and legalized.

As for free trade, globalization is now the norm. Our employment sectors need to change and modernize... putting up walls might not be the best idea IMO.

Voting conservative? I may be a centrist when it comes to politics, but that won't stop me from voting for a party that will do a lot of good for society. IMO all of Ontario's political parties suck, and I think we did a good job last year deciding who sucks the least... no one, it's a minority government.

Update, modernize, get with the times. Sustainability and efficiency is now the norm. Embrace it while balancing the books and you'll both put this place back on track and make your citizens happy.

[SteelTown]

Cost-cutting Ontario will privatize services, sell LCBO property

http://www.thespec.com/news/article/...-lcbo-property

To raise money and cut costs Ontario will sell the downtown Toronto LCBO warehouse and privatize more Service Ontario operations, Finance Minister Dwight Duncan said Monday.

The government — which is preparing for the release of Wednesday’s Drummond report on cost-cutting — will also look at scrapping horse racing subsidies that have cost taxpayers $3.4 billion since the previous Progressive Conservative government started them in 1998.

Selling the LCBO warehouse and head office on valuable waterfront land ripe for redevelopment is expected to generate over $200 million, Duncan said in a luncheon speech.

“We can make better use of the property to maximize the value of this taxpayer asset,” he told a crowd of 500.

“A flagship retail store will remain in the vicinity, while head office and warehouse could be moved.”

Duncan warned that the former TD bank chief economist Don Drummond had warned him that the government’s annual deficit — slated for $16 billion this year — could balloon to $30 million by 2018 if the way public services are delivered are not “transformed.”

In last October’s election campaign, all three major parties promised to slay the deficit by 2018.

“It is clear that this serious challenge requires a serious plan,” Duncan said.

For Service Ontario, about two-thirds is already privatized with online transactions costing about $1 each — much lower than the $3 to $8 for in-person transactions such as renewing drivers’ licences or getting birth certificates.

“Obviously, greater efficiencies can be gained by driving customers to a lower-cost, online channel,” Duncan said.

The horse racing subsidies topped out at $345 million last year through the Ontario Lottery and Gaming Corporation’s “slots at racetracks” program.

“It’s more support than we provide for water protection or road safety to protect our families...that kind of money would pay for over 9 million hours of home care,” said Duncan.

The contract lasts another year and will be honoured until then, a ministry official said.

[haljackey]

I don't understand why governments have such a hard time balancing budgets. It's simple math, income - expenses should equal 0. Try to run a surplus during good times so you can afford to go into debt during bad times.

[flar]

It's not hard to understand why the budgets aren't balanced, it's politics.

Of course, politics can be pretty hard to understand. The simplified understanding is that every political decision creates winners and losers. The government of the day has to weigh the political equation. Can we afford to piss off this group of people? What do we have to spend to not piss off this other group of people? This is why many of the toughest decisions don't get made, or in other cases, a situation is engineered that forces someone else to do it.

[vid]

They have to spend money they don't have to retain seats. It cost the Liberals a highway twinning project in Thunder Bay to retain two of their seats.

This is the primary downside of living in a democracy: the people who are responsible for spending the money must also do things that convince us to let them keep their jobs.

[Highinthesky]

The reason governments have problems balancing their books is the same reason so many individuals have the same problem. People want instant gratification because they want to feel good now, governments want instant gratification because they want to win the next election. It is much easier to achieve both if you spend now and worry about the consequences later.

First step to a balanced budget in Ontario with Dalton at the helm; have him divorce his wife so he can have an objective view at education spending.

[eternallyme]

Some things I would do:

1) Eliminate the Green Energy boondoggle.

2) Eliminate full-day kindergarten, or hand it over to private sources and defund it.

3) Reduce the four school boards per area to one - no more language-specific or Catholic boards. (Catholic schools would be either private or brought into the public system)

4) Sell the LCBO, with all proceeds going to pay down the provincial debt to reduce interest payments.

5) Control health care spending by allowing private money into the system, either by user paying or corporate/individual involvement.

6) Scrap the flawed 30% tuition rebate which most students aren't eligible for anyway.

7) Cancel the corporate tax cuts, or at least postpone until the budget is balanced.

[reidjr]

Green Energy
While there are major issue's with it i think just dumping it would not be wise we need to make sure long term and short term if can offer us energy and does not put us in the poor house.

full-day kindergarten
While i want this cut it won't be as a fair amount of people like it and if they were to chop it that would not go over well.

Schools
While i want just one school board if you said were chopping the francophone school board there would be outrage so much like kindergarten they won't touch this.

Health Care
I like the idea of having some private health care but my fear is you would have people say only those with money can afford care when the need it.

Lcbo
Short term sure your going to pay off a bunch of the debt but long term is it best no it would not be.

Tuition rebate
No question this has to be cut sure some will be upset but this has to be cut if we want to be serious about cutting down the debt.

corporate tax cuts
I would not want them to scrap it but have strict rules such as a company can't just pick up and move.

[haljackey]

Rebuttal to reidjr

Green Energy
-This will benefit us in the long term. I am glad Ontario is doing something about it and while it may not be the most efficient system cost-wise, the fact that we have the balls to do this says something.
-I, however would support building more nukes to replace fossil fuels as while it may not be green, it is clean (0 greenhouse emissions).

full-day kindergarten
-The problem with this is that people have already made plans relative to putting this program in place. I don't think it's needed, but it's no big deal, at least in my opinion.

Schools
-I fully agree. Merge the Catholic board and get rid of the costs of having two school systems.

Health Care
-Perhaps having to pay for a preventable health problem (smoking, obesity etc) might be do-able.

Lcbo
-I am for selling alcohol like cigarettes. Let's sell some weed too, lots of money to be made from that!

Tuition rebate
-Stupid thing. He originally said this would be for all full time students, but look at it now. Reducing tuition fees is a plus, but it has to be fair for everyone.

corporate tax cuts
-This isn't as needed as it once was. Changes to this would be a plus in my mind.

[reidjr]

haljackey
I know some people don't like the idea of a junk food tax but i really think it has to be looked at not a huge tax start at 2% and then increase it down the road if needed.

[haljackey]

Well our health care system is overloaded with people who have preventable health problems.

Getting people to pay for preventable treatment, at least part of it, would do a lot for the system and society as a whole.
-People may pay attention to their health more (stop smoking, eating big macs)
-The number of patients may be reduced
-Revenue will go up
-Increased efficiency
-More workforce dedicated to people who actually need care

Adding things like a junk food or soda tax shouldn't be that bad in my mind, as these things are cheap to begin with.

Maybe making healthier food more affordable and crap food more expensive may work, but that might involve interfering with the market, something governments shouldn't do too much of in a capitalist country.

[reidjr]

Originally Posted by haljackey

Well our health care system is overloaded with people who have preventable health problems.

Getting people to pay for preventable treatment, at least part of it, would do a lot for the system and society as a whole.
-People may pay attention to their health more (stop smoking, eating big macs)
-The number of patients may be reduced
-Revenue will go up
-Increased efficiency
-More workforce dedicated to people who actually need care

Adding things like a junk food or soda tax shouldn't be that bad in my mind, as these things are cheap to begin with.

Maybe making healthier food more affordable and crap food more expensive may work, but that might involve interfering with the market, something governments shouldn't do too much of in a capitalist country.

Could healthier food be a bit cheaper sure but its really not that bad as it is i think the issue is some people just don't want to eat good they want junk food now that could be in part due to its easy but still to eat good it does not cost that much.

[lrt's friend]

Originally Posted by reidjr

haljackey
I know some people don't like the idea of a junk food tax but i really think it has to be looked at not a huge tax start at 2% and then increase it down the road if needed.

This is a cop out. The fairest thing to do is to simply have a general tax increase. Let's stop social engineering, which usually impacts the poor much more than the rich.

Part of the problem and this applies to the federal level as well, is that we have been sold tax cuts for the last 10 or 15 years as if it was a freebie. It isn't. It costs just as much as buying votes with highway projects etc. As we have done this, we have shrunk the tax base to the point that we have little room when the economy goes sour. In many respects, tax cuts are worse as they are very difficult to reverse and it is a permanent loss of revenue whereas infrastructure projects are a one time cost for the most part.

The first thing to do is to eliminate a lot of the little tax breaks and rebates that were targeted at certain groups (to buy their votes). These things often never served their purpose or were totally ineffective or just puts money in the pockets of certain people at the expense of others.

[eternallyme]

Carbon taxes might play well in downtown areas but it would hurt them in suburban areas like the 905 (where they have higher transportation costs regardless of mode and higher heating and electrical bills) and DESTROY them in rural Ontario, where the majority believe global warming is a scam.

[reidjr]

Originally Posted by lrt's friend

This is a cop out. The fairest thing to do is to simply have a general tax increase. Let's stop social engineering, which usually impacts the poor much more than the rich.

Part of the problem and this applies to the federal level as well, is that we have been sold tax cuts for the last 10 or 15 years as if it was a freebie. It isn't. It costs just as much as buying votes with highway projects etc. As we have done this, we have shrunk the tax base to the point that we have little room when the economy goes sour. In many respects, tax cuts are worse as they are very difficult to reverse and it is a permanent loss of revenue whereas infrastructure projects are a one time cost for the most part.

The first thing to do is to eliminate a lot of the little tax breaks and rebates that were targeted at certain groups (to buy their votes). These things often never served their purpose or were totally ineffective or just puts money in the pockets of certain people at the expense of others.

The issue is people want all types of goodies but don't want to pay for them from free college to free day care even thing such as free transit i could go on and on.

[vid]

Originally Posted by eternallyme

Carbon taxes might play well in downtown areas but it would hurt them in suburban areas like the 905 (where they have higher transportation costs regardless of mode and higher heating and electrical bills) and DESTROY them in rural Ontario, where the majority believe global warming is a scam.

Yeah, the sixth consecutive year of Northern Ontario ski hills opening in January (in the 90s they opened in late November) has really convinced us that the climate is not getting warmer.

Ski-doo sales here are down sharply, a couple businesses are considering closing up for good because of it.

If any region has reason to believe that global warming exists and is affecting us, it's the north. No where in Ontario is the change in climate so dramatic and noticeable than the Northwest and the lowlands. It has been nearly consistently 2 to 7 degrees warmer during winter for the past few years. All the records for these days were set in the 1950s and 60s but they were exceptions. Today, plus temperature highs in January and February appear to be the norm.

And with the way trees are factored into the equation, the North can be sneakily calculated as carbon neutral no matter how much energy we consume.

[shreddog]

Well for those that haven't done so yet, I suggest a good read - Drummond's Analysis of the province's fincancial situation - here.

Going forward I expect that the next budget will be somewhat moderately severe - a minimum amount of slower growth to healthcare and education and freezes/delays on everything else. Expect big ticket items like the FIT, transit allocations, and some of the social reforms to be delayed/deferred. Expect that anything not currently seen as "key" to provincial future (and Liberal re-election!) will be off the table (bye bye Olympics, future transit funding, tax cuts, etc). I would also expect to see a reasonable increase in sin taxes and user fees - nothing too major though.

Expect there to be screaming from the Cons and Dippers but no move to bring down the government as who would want to inherit this mess?!?!

Next year though I expect to see the "hard" budget - significant tax increases (HST up by 2%, all user fees growing faster than CPI, health co-pays, income tax surtax starting at the second tier, increase in corporate taxes and possibly a hefty inheritance tax) and more and wide ranging spending cuts.

IMHO, I think we're in for 4-5 years of tough budgets in Ontario until the finacial model changes.

The most interesting thing for me in the report is the magnitude of the financial gap. For those that love to bitch about Harris and his "Common Sense" revolution, he only cut the overall budget by 4%. In Drummond's scenario Dalton will have to cut the budget by over 12% to reach a balanced budget - or 3 times as much as Mike! While no doubt taxes will go up, will we see in 5-10 years people referring to Dalton as the reall cutter (and cursing him for all the defered spending on things like transit) and Mike as being the one who used the velvet gloves??

[reidjr]

Should there be massive cuts yes but there won't be look at most of the polls people don't want major cuts so what i think will happen is the sin tax will be increased other taxes as well maybe a carbon tax.

[eternallyme]

Originally Posted by reidjr

Should there be massive cuts yes but there won't be look at most of the polls people don't want major cuts so what i think will happen is the sin tax will be increased other taxes as well maybe a carbon tax.

That will kill the Liberals in the suburban areas. They don't want social conservatism or anti-immigration policies in those areas (a major reason why the PCs lost there in 2011), but don't want higher taxes either. Those areas had the lowest turnout as well as many centrist swing voters stayed home.

That is the big difference between the rural areas and the suburban areas - the rural areas want things like abortion laws, gun rights (i.e. killing the gun registry for ideological - and not fiscal - reasons) and elimination of everything "green" (which is why John Tory did really bad there in 2007).

[vid]

And then there is a difference between rural and north, where aside from the opposition to gun legislation and hypocritical want of socialized energy, we're the political opposite of the rural south.