On Ontario finances, PCs find what everyone knew was there
By STAR EDITORIAL BOARD
Fri., Sept. 21, 2018
Quite predictably, the commission set up by Premier Doug Ford to raise concerns about the Liberal government’s accounting of Ontario’s finances has delivered exactly that. This really is one of the oldest tricks in any political playbook.
When the Liberals came to power in 2003, after eight years of Progressive Conservative rule, they uncovered a “hidden” deficit of $5.4 billion.
Now the PCs have their turn, and they’re touting a deficit $8.3 billion higher than what the Liberals claimed ($6.7 billion), to total the eye-popping number of $15 billion.
Finance Minister Vic Fedeli was quick to accuse the Liberals of being responsible for a “crippling hidden deficit,” and engineering a “cover-up.”
But in reality there is very little in the financial report released Friday that wasn’t already publicly known.
The biggest piece of the increased deficit number has to do with how the province records pension assets, and that’s never been a secret. It’s the subject of an ongoing, contentious and very public disagreement among accountants on what constitutes the best practice.
Ontario Auditor General Bonnie Lysyk decided two years ago that pension assets should be counted in a new way, adding billions to the deficit, instead of how it’s been done in Ontario since 2002. A panel of independent experts appointed by the Liberals said Lysyk was wrong, and now the commission appointed by Ford has said the government should adopt her view on “a provisional basis” until an agreement can be reached.
The other elements of Liberal “deception” that Fedeli pointed to include accounting for borrowed money to reduce electricity bills on the books of the Crown-owned Ontario Power Generation; $1.4 billion in efficiencies not yet realized; and a reduction to the reserve fund, which was publicly itemized in the Liberal budget.
As interim Liberal Leader John Fraser put it, Fedeli “was pretending that he didn’t know something that he already knew.”
Indeed, there has been plenty of debate, and no doubt there’s room for more, around these various accounting practices. But no matter how many adjectives Fedeli pulls out to describe the commission’s report, it does not amount to the financial malfeasance that the PCs suggest the Liberal government was guilty of while in office.
Ford promised voters an audit to uncover spending that was so “reckless and inappropriate” that he suggested a few Liberals might head to jail for it. There’s nothing here that justifies Ford’s election rhetoric, or what is undoubtedly yet to come.
For this was always a political exercise far more than a financial one. And what’s really concerning is that the commission’s report is just the opening act. The real show starts when Ford moves on his election promise to cut $6 billion out of the budget.
And, right on cue, Fedeli said this: “The hole is deep and it will require everyone to make sacrifices without exception.”
Who and what will be sacrificed in Ford’s Ontario is something many Ontarians are deeply concerned about.
To recap, the PCs’ overarching election promise was to find $6 billion in “efficiencies” without cutting programs or jobs, while reducing taxes and hydro bills, increasing spending on a variety of files and balancing the books.
But when it comes to the details of how any of that will supposedly happen Ontarians aren’t much farther ahead than they were during the election, when these were just campaign slogans. Although the government did manage to find $150 million toward that total on the backs of the poorest among us by cutting a planned 3-per-cent welfare increase in half.
Where will $6 billion in government spending reductions come from? When will the promised income tax cuts come? When will the budget be balanced?
Ford and his finance minister still won’t say.
What we do know is that the PCs are banking on the fact that a suddenly ballooning deficit sounds like the Liberals did something terribly wrong and that they’ll use that as cover when they try to turn their impossible election math into a real provincial budget.
