Paying down the deficit: here’s how


Well, it’s 2010. Happy New Year!

As you read this, staff at the Ontario Ministry of Finance are hard at work to put together the 2010-11 provincial budget.

This year’s budget deficit has grabbed a lot of headlines, with Finance Minister Dwight Duncan saying it will hit $24.7 billion. To no one’s surprise, the Premier has mused about tackling the deficit through privatization and wage cuts.

Both approaches will hurt Ontario. Both approaches are the wrong way to go. Here’s why:

  • First of all, Ontario’s overall program spending is the second-lowest in Canada. It’s so low it’s embarrassing. To take just one example, Ontario ranks 54th out of 64 jurisdictions in North America when it comes to per-student funding of our schools. And Mr. McGuinty calls himself “The Education Premier”!

  • Second, selling off profitable assets like the LCBO is a money-loser, not a money-maker.

  • Third, the province is currently spending $32.5 billion over two years “to stimulate economic growth and to preserve and create jobs across the province.” This is a great idea. But if we are spending billions to create jobs, it hardly makes sense to cut billions out of public services and cut public sector jobs. It would be like driving with one foot on the gas and one foot on the brake.

Cutting spending now will only prolong the real crisis Ontario is facing, and that’s the shortage of good jobs. We are in deficit because too many people are not working. We are in deficit because too many people can’t make ends meet on part-time, temporary low-paid jobs. As a result, they can’t pay taxes.

This recession is not over when the stock market rises. It is not over when housing sales pick up. It is over when people are making a decent living. That’s why good jobs – not the deficit – must be government’s number one priority, not just at Queen’s Park but on Parliament Hill as well.

The good news is that, although paying down the deficit will not create good jobs, creating good jobs will pay down the deficit. When people are working, they pay taxes. When they pay taxes, they pay for the public services we all need.

This shouldn’t be hard to explain to Dwight Duncan. Unemployment in Ontario is at 9.3 per cent right now. That’s far too high. But in Windsor, where Mr. Duncan lives, it’s over 13 per cent.

People are hurting.

So tell your friends and family, tell your neighbours, tell your MPP: We don’t need cuts. We need communities that work. The next budget must be all about good jobs. 

In solidarity,

Warren (Smokey) Thomas, President

For the latest report on school funding in Ontario, click here. To see United Steelworkers economist Erin Weir explain why privatizing the LCBO is a bad idea, click here.

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