Taxpayers Federation cautiously optimistic about Ontario budget

Christine Van Geyn

Christine Van Geyn is the Ontario director for the Canadian Taxpayers Federation.

The Canadian Taxpayers Federation is cautiously optimistic about the provincial budget recently tabled by Ontario Minister of Finance Vic Fedeli. The budget includes a plan to achieve a balanced budget by 2023, which is one year after the next provincial election. The current deficit is $11.7 billion, down from $15 billion when the government took office.

“Today makes it clear that balancing the budget is a core goal of this government,” said CTF Ontario Director, Christine Van Geyn. “We are concerned that the commitment will not be fulfilled within this government’s first term, but the government is moving in the right direction without imposing any new or higher taxes. While more restraint should have been shown in the first year, overall, the plan looks good for taxpayers.”

While the deficit number is down, this is because revenues grew faster than predicted since the fall, the government used a billion dollars in reserve funds, and projects lower interest charges on debt.

Program spending is rising by 5.3 per cent this year and it rose by $752 million more than the government estimated it would back in the fall.

Projections for next year show strengthening spending controls with planned program spending held stable at 0.07 per cent growth.

The budget includes new commitments, including financial accountability legislation, initiatives to limit the size and cost of the provincial bureaucracy, and a new tax credit for child care.

“The government’s new proposed financial accountability legislation is fantastic,” said Van Geyn. “The new legislation uses common sense by requiring the government to release its budget before the start of the fiscal year. Taxpayers will also get the transparency they deserve, because the new legislation will impose a personal fine on the premier and minister of finance for failing to meet deadlines for financial disclosure – deadlines the last government regularly missed or ignored completely.”

The government outlined plans to reduce bureaucratic bloat by reducing the size of the government payroll and its cost. Initiatives include: a hiring freeze; a freeze on discretionary spending; ending the “use it or lose it” end-of-year spending practice among bureaucrats; eliminating automatic pay increases for government executives; eliminating 10 redundant government agencies; and, a consultation with non-management government bureaucrats designed to limit wage growth.

“Salaries for government workers are the number one cost driver in government and must be addressed if the government is going to balance the budget,” said Van Geyn. “If the government succeeds in driving these costs down, who knows, it may actually beat the projections in today’s budget. We are cautiously optimistic.”

The government has also announced a new childcare tax credit for families with household incomes under $150,000. The government estimates the new credit will cost $390 million per year.

“The new childcare tax credit is a useful initiative for families and we are pleased to see that the provincial childcare tax deduction remains in place,” said Van Geyn. “The new credit is rightly targeted at the families who need it the most, and allows parents to make flexible choices about the kind of child care that is right for them. A giant government-run daycare centre that would cost taxpayers billions is not the best way to make childcare affordable, and we are happy to see the government acknowledge that different families have different needs.”

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