: Ontario Finance Minister Dwight Duncan, Remarks to Toronto Board of Trade
March 24, 2011

Thank you for that kind introduction.

When I table Ontario’s Budget next week I will be pointing to many positive signs in the economy.

We’ve reported five consecutive quarters of economic growth and growth is continuing.

That’s meaningful. 

To me, as finance minister, and to the economists who watch the Province’s progress.

Something more meaningful to people is whether or not they’ve got a job.

A job to feed their family and to put a roof over their heads.

As you know, Ontario has recovered 91 per cent of the jobs we lost during the recession.

Statistics Canada data tells us 86 per cent of those jobs created have been full time jobs.

That’s progress – and we would like to continue that progress.

That’s why we continue to work hard to give businesses the tools they need to create even more, high paying jobs.

Like most governments around the world, when the recession hit, we took action.

We stimulated the economy through infrastructure investments.

We protected public services.

Together, with the US and Canadian governments, we invested in one of Ontario’s largest employers – the auto sector.

We invested in new training programs to get laid off workers the skills to compete in the job market.

The good news is the economy is turning the corner to a brighter future…our investments, and the hard work of Ontarians, are paying off.

We also have to be realistic about the fact that those investments, designed to help our families, came at a cost to our government.

As a result, we face a challenge.  It’s a challenge we can’t gloss over.

The truth is that the deficit and debt challenge belongs to everyone, regardless of age, gender and yes, political stripe.

Let me offer a little history lesson about Ontario’s debt.

In the early ‘90s the NDP faced some real challenges in the global economy.

Their responses led to an increase of Ontario’s debt.

Through the late ‘90s and into the early 2000s, the Harris and Hudak Tories experienced a period of unprecedented economic growth and still managed to increase provincial debt.

More recently, Ontario, like much of the world has experienced a severe economic downturn and debt has increased.

For a generation now, parties of all political stripes have increased the size of Ontario’s debt.

Each will tell you their own reasons for doing so and why those reasons make sense – or as some might say “common sense”.

Or they might tell you that spending in and of itself is a means to an end.

I, of course, will tell you that the challenges facing us over the last two years are far more justifiable than those of my predecessors.

I’m not here to win that argument – today – and we’ll let the voters and history decide.

So, having established that there is a debt challenge and that, for now, no one party is generally more or less responsible than the others, the conversation must turn to how to address the fiscal challenge.

We have some experience in this area since we eliminated the deficit we inherited and balanced the budget three years in a row prior to the global recession.

Economic growth will help us confront the fiscal challenge created by the recession. 

That’s why we’ve worked so hard to change the fundamentals of our economy by cutting the tax rate on new business investment in half. 

Nevertheless, economic growth isn’t enough on its own to eliminate the deficit.

There are far too many pressures on the system for that to be possible.

As a proportion of government’s total program expense, the health care budget is already approaching close to 45 per cent.

Add education, a well-known key priority of the McGuinty government and, I must add, a key building block of a competitive, growing economy, and we approach 70 per cent of total government program expense.

There are different ways to bend the cost curve.

There are choices – two distinct paths towards eliminating the deficit and then paying down debt.

The first is simple – program cuts.

You could slash benefits for our low-income people, let our infrastructure age and allow our universities and colleges to fall into disrepair.

There are plenty of specifics that could be cut. 

You could lay off about 33,000 teachers.

You could reduce the number of doctors in Ontario by 12,000.

You could eliminate funding for 37,000 nurses.

You could cut funding for 80 per cent of all the beds in long-term care homes.

Any one of these actions would save about $3 billion.

By the way, $3 billion is equal to a one point cut in the HST.

If the goal is cutting, the task is actually pretty easy.

Find a costly program – most of them are in education and health care – and get rid of it.

The majority of the costs associated with these programs are tied to salaries.

Salaries that pay for jobs.

Jobs and people.

Our education system is now recognized as one of the best in the world.

A government intent on simple cuts could eliminate that advantage in one fell swoop.

Obviously, simple cutting carries obvious downsides.

The cuts that would be involved would undermine our competitive advantages.

I’m proud to say that 80 separate delegations from around the world came to visit us last year to see what they could learn from us.

In a competitive world where many developing countries are now pouring billions of dollars into their education systems, we need to ensure we continue to build the best public education system in the world right here in Ontario – from kindergarten right through to graduate school – so that our kids are positioned to compete with kids around the world.

A cut to education would amount to a missed opportunity Ontario now has to seize a brighter future in a changing and competitive world.

Anyone who tells you the budget can be balanced through un-specified efficiencies alone is not leveling with you.

And they’re not being upfront about the impacts that would have on a fragile economic recovery…look at the UK experience.

Thoughtless, across the board cuts would stop the economic recovery in its tracks.

So we turn to the second approach to tackling the deficit.

It pursues a more complex goal than simple cuts.

Just as we as a government and you as taxpayers cannot afford permanent deficits, Ontario cannot afford straight, across-the-board cuts to programs and services.

We have set a goal to protect, in these lean times, our schools and our hospitals.

In order to meet this goal, we must continue to find new ways of doing the things we do.

We in the public sector have been asking our friends in the private sector to increase productivity for years. 

The pressure is now more than ever on us to increase productivity in the public sector too.

Pursuing more value requires a change from trying to do everything for everyone to focusing resources on higher priority programs that directly impact front line services for people.

Separating core services from something that would be nice to offer is especially important in an era of limited resources.

Government will have to find new ways of delivering high quality public services.

We will examine services and whether the provincial government should continue to deliver a specific program or if someone else can do it better, more efficiently and in a manner that delivers better results for people.

We took this approach with our tax system and are now saving $440 million over the next five years by transferring tax collection to the federal government – all while making life easier for business people who have to comply with the complex rules of corporate and sales taxation.

In December of last year, I announced the beginning of a series of updates on what we’re doing to ensure we’re delivering maximum value for taxpayer dollars.

We talked about everything from eliminating unnecessary perks to eliminating more than 15,000 printers and servers.

Imagine, in our world of high speed, high tech communications, the number of fax machines and fax lines that were in all the government offices.

So we got rid of almost 1,300 fax lines.

Two weeks ago I announced that we had exceeded our target to reduce the number of agencies by five per cent.

A lot of these changes we’ve made have relatively small savings in terms of dollars.

Yet our work with agencies offers a glimpse of how reforming the fundamentals of how government works is also about doing things smarter – and making dealing with government easier for people.

One of the agencies we are eliminating is the Ontario, Eastern Ontario and Northern Development Corporation. 

The government also has the Eastern Ontario Economic Development Fund.

Last week, we eliminated the Corporation.

It existed in name only since 1995.

Imagine being a small business looking for access to the agency. 

Now, the confusion and frustration are gone and we continue to support local small businesses across the province. 

Individually, and compared to Ontario’s $125 billion budget, these recent measures may sound rather small.

We’ve found ways to save $1.3 million by consolidating websites.

Another $30 million by reducing travel last year and another $10 million this year.

However, they add up.

There are also some bigger targets and savings to be found.

With the work we’ve been doing over the last few months and with some new initiatives I’ll be announcing in the Budget next week that we’ve identified nearly $1.5 billion in new savings over the next three fiscal years.

One of the areas where we’ll be finding these savings is in our corrections system.

Many of our jails are old.

They are inefficient and because they are, we don’t fill them with as many prisoners as they could hold.

We’ve decided it doesn’t make much sense to keep prisoners in a jail that was built in the 1850s.

For the last few years, we’ve been building newer jails in places like Windsor and Toronto.

New jails have a much more efficient ratio for prisoners to staff.

This means the newer jails are bigger and more cost effective.

During the construction process, we are creating hundreds of jobs.

Once these modern, efficient jails are complete, we can move prisoners there from the old and inefficient jails.

Then we’ll take the savings that we will realize from having fewer but more efficient facilities and use those savings to fight crime.

The savings would be applied to investing in policing and victims’ services.

This is just one example of how we are changing the way government does business.

We will continue to get rid of duplication.

Finding value for money in new ways cannot be accomplished overnight.

Anyone who tells you it is easy is not telling you the truth.

True reform of government requires openness to new ideas from all sources:  labour, business, the left, the right, the broader public sector and the private sector.

The deficit and debt challenges facing Ontario are real.

The question is not, “Should these challenges be addressed?”

The question is, “How should they be addressed?”

Blanket references to “waste” are easy to digest but do nothing to balance the budget.

Such references sound trite in the context of poorly thought-out tax cuts that are not part of a focused plan to create jobs and growth.

Those of us who talk about eliminating the deficit, balancing the books and paying down debt have a responsibility to explain specific ideas on how to accomplish these goals to people.

You won’t save $3 billion by reducing paper use or travel, cutting the use of consultants and sunsetting agencies.

I know – because we’ve already done those things.

In next week’s Budget, I will have more to say about Ontario’s finances – and our plan to eliminate the deficit.

Not long after that, the Auditor General – because we made it the law that he have an opportunity to do so before an election – will report to the public about whether or not that plan is reasonable.

All of these steps are part of an ongoing conversation that Ontarians deserve to have.

It deserves serious attention, fairness and transparency.

It is a conversation that will and must continue.

Standing behind this conversation is the responsibility to explain what values are driving the choices we’re making.

Our government cares about public services.

People in Ontario want the best education for their kids so they get the opportunity for good, high paying jobs when they grow up.

They want reliable public health care to be there for them when they need it.

While these services provide help and support to us as people, they also underlie a competitive economy.

Achieving these goals requires a balanced approach. 

That’s why the strategic investments we make today in infrastructure and to protect health and education, are producing the results we need to build a strong economy.

Ontario has faced a number of challenges in the recent past.

The people of Ontario confront challenges and we beat them.

We’re facing another very real challenge and we’ll beat this one too.

We have a plan to get there.

Implementing that plan will require much more work in the years ahead.

Working together, we will protect our schools.

We will protect our hospitals.

We are eliminating the deficit.

We are building a strong, competitive economy that creates jobs and ensures the ongoing success of Ontario in a global economy.

Thank you.