March 29, 2011
The McGuinty government has a proven track record of prudent fiscal management. It eliminated the $5.5 billion deficit it inherited and delivered three balanced budgets. Then the global recession hit.
The government chose to lessen the recession’s impact on people and to protect education and health care. As a result, the province incurred a deficit.
The government has laid out a realistic and responsible plan to eliminate the deficit. Through prudent fiscal management, the government has improved upon the deficit targets outlined in the 2010 Budget. As a result, the 2011 Budget is projecting deficits of $16.7 billion in 2010–11, $16.3 billion in 2011–12 and $15.2 billion in 2012–13. This represents an improvement of $4.7 billion over three years from the projections outlined in the 2010 Budget.
These results are in large part the outcome of the government’s continued efforts to reduce growth in program expense while protecting the public services that matter most to people.
As a share of the economy, the Ontario government’s program spending in the 2010–11 fiscal year was the third lowest among Canadian provinces. In 2008–09, Ontario’s spending per capita on general government services, including administration, was $134 per person. This is the second lowest among the provinces and 28 per cent below the $186 average per person spent across all provincial governments.
Returning to a balanced budget requires reduced growth in program expense. This year, program expense is expected to be $2.6 billion below the 2010 forecast. Continued expense management, while sustaining economic growth and protecting education and health care, will require a greater focus on reforming the way government does business.
Other approaches, such as arbitrary, across-the-board reductions, would require deep cuts to education and health care, which would hurt Ontario families and could cost more in the long run.
In December 2010, the Minister of Finance announced additional measures to reduce waste, eliminate duplication, strengthen oversight and find more savings. Measures announced since then include:
In order to protect health care and education while eliminating the deficit, the government must reform the way it delivers services to people. The 2011 Budget builds on the government’s record of success in reform and finding savings by accelerating its plan to improve productivity and efficiencies.
Initiatives announced in the budget and since December 2010 would help realize savings of nearly $1.5 billion across government over the next three fiscal years (see table, page 4).
Specific actions to find efficiencies and reform public service delivery include:
To provide advice on reforms that would help accelerate its plan to eliminate the deficit while protecting education and health care, the government will also establish the Commission on the Reform of Ontario’s Public Services. Chaired by respected economist Don Drummond, the commission will examine long-term, fundamental changes to the way government works. The commission’s work will include exploring which areas of service delivery are core to the Ontario government’s mandate, which areas could be delivered more efficiently by another entity and how to get better value for taxpayers’ money in delivering public services.
The commission will report to the Minister of Finance in time to inform the development of the 2012 Budget. The commission will not make recommendations that would increase taxes or lead to the privatization of health care or education.
|Operational Efficiencies and Consolidation|
|Across Government||Direct operating expense savings||271|
|Across Government||Enterprise-wide Information and Information Technology savings||36|
|Across Government||Capital project savings||14|
|Major Agencies||Agency efficiencies||200|
|Infrastructure Agency Consolidation||Merging Infrastructure Ontario (IO) and the Ontario Realty Corporation (ORC).||10|
|Community Safety & Correctional Services||Prison modernization||16|
|Children and Youth Services||Consolidation of children’s aid societies||9|
|Research and Innovation||Streamlining research talent and business support programs||76|
|Attorney General||Service efficiencies||20|
|Efficiencies in the Health Care System|
|Community and Social Services||Savings in the Ontario Drug Benefit program resulting from existing drug system reforms||249|
|Health and Long-Term Care||Expansion of bariatric surgeries, reducing the need to fund treatments provided out of country.||21|
|Health and Long-Term Care||Proposed changes to improve alignment of funding for out-of-country services with services delivered in Ontario.||86|
|Health and Long-Term Care||Evidence-based management of health care spending and further savings from prescription drugs||455|
FOR MEDIA INQUIRIES ONLY:
Andrew Chornenky, Minister’s Office, 416-325-9819
For public inquiries call 1-800-337-7222
(Toll-free in Ontario only)