The Fraser Institute is out with a new study criticizing the record of the Progressive Conservative government under Premier Doug Ford. The major theme of the study is rhetoric versus outcomes, noting that Ford promised to restrain spending, balance the budget, and cut taxes, but has failed on all three fronts.
In its introduction, the report’s authors note that Ford pledged “to reduce the size and cost of government, resulting in lower taxes and less debt.” Ford came into office promising a line-by-line audit of government spending, a one-percentage-point cut to the corporate tax rate, and reductions to several personal income tax brackets. All of this, Ford insisted, would position Ontario as once again “open for business.”
The authors also quote the Ford government’s fiscal update from 2019, which asserted that “this government believes balancing the budget and reducing Ontario’s debt burden is not only a fiscal imperative, it is a moral one.”
The Ford government in its infancy, therefore, outlined a clear and consistent fiscal vision: one of cutting taxes, balancing the budget, and reducing debt.
Unfortunately, the rest of the study shows that the government’s rhetoric has failed to match reality. Over the Ford government’s first seven years in office, inflation-adjusted per-person program spending actually increased by 5.4 per cent. Had Ford been serious about reducing government spending, that number should have been flat or negative.
Given the fact that per-person spending actually increased by nearly $700 per person, after adjusting for inflation, over the course of the Ford government’s first seven years in office shows the government came nowhere close to restraining public spending.
The study’s authors then look at tax revenue and note that real per-capita tax revenue increased by 7.5 per cent over the Ford government’s first seven years in office, despite weak economic growth. One of the major reasons why government revenue has increased so significantly is that the Ford government has not cut taxes as promised: corporate taxes remain the same and the income tax cuts Ford once promised have failed to materialize.
In terms of balanced budgets, the Ford government has only run a single balanced budget during its first seven years in office, spilling predominantly red ink. And even though the Ford government has repeatedly promised to balance the books by 2027-28, the report’s authors note that this should be met with significant skepticism, as Ford has repeatedly pushed back his plans to balance the books in recent years.
While Ontario’s net debt-to-GDP ratio has declined somewhat since Ford became premier, it is projected to increase over the next few years, undoing whatever progress has been made to date. Ford inherited a net debt-to-GDP ratio of 39.2 per cent, but that number is expected to be 38.7 per cent this year, indicating minimal progress overall in reducing the province’s debt burden. And that could worsen still if Ford fails to keep his promise to get the fiscal house in order by 2027.
The Fraser Institute report, taken as a whole, shows that the Ford government’s rhetoric has failed to match reality. Government spending and tax revenue are up, while the province’s debt situation has improved marginally at best. This is a far cry from what was promised to Ontario voters in 2018.
If Ford doesn’t want to be remembered as a fiscal manager in line with the likes of former premiers Dalton McGuinty and Kathleen Wynne, it’s time for him to get serious about keeping the promises he made to voters some eight years ago. Now is the time to cut spending, cut taxes, balance the books, and pay down debt. After eight years in office, Ford should be thinking about what his legacy will be. And if the premier doesn’t change course, he won’t have much of one to leave behind.
Jay Goldberg is the Canadian Affairs Manager at the Consumer Choice Center. He previously served as the Ontario Director at the Canadian Taxpayers Federation and a policy fellow at the Munk School of Public Policy and Global Affairs. Jay holds a Ph.D. in Political Science from the University of Toronto.
