Restoring Trust, Transparency and Accountability
After 15 years of waste and mismanagement under the previous government, Ontario’s Government for the People is restoring trust, transparency and accountability in the Province’s finances. To provide a clear picture of Ontario’s books, the government established an Independent Financial Commission of Inquiry (the Commission) and launched a line-by-line review of government spending.
The 2018–19 deficit is now projected at $14.5 billion in the 2018 Ontario Economic Outlook and Fiscal Review. That is $0.5 billion less than the $15 billion deficit reported by the Commission. The Province has saved $3.2 billion or about two per cent in program expenses by reducing spending — while not reducing front-line services. At the same time, measures taken by the government, such as cancelling the cap-and-trade carbon tax, have resulted in significant savings, keeping almost $2.7 billion in the pockets of people and business.
Inheriting Debt and a Structural Deficit
For 13 of the last 15 years, the previous government ran deficits, spending more money than it received in revenues. Structural deficits led to mounting debt. Today, Ontario has the highest subnational debt in the world. This year, the Province will owe $347 billion in net debt. That’s over $24,000 for every man, woman and child. In 2018–19, the government is forecasting $12.5 billion in interest payments to service this debt, costing the province more than $1.4 million an hour, or every person almost $900 this year. This makes it Ontario’s fourth largest expense line item after health care, education and social services. Every tax dollar that goes to servicing the debt is one less dollar going to vital public services that benefit the people of Ontario.
Restoring Transparency in Government Accounting
Restoring trust and accountability in Ontario’s finances starts with a clear and transparent reporting of the state of the Province’s books. The Commission examined the accounting practices of the previous government and confirmed the position of the Auditor General of Ontario that the previous government’s 2018 Budget numbers were “not a reasonable presentation of Ontario’s finances.”
The Commission’s report determined that the deficit inherited from the previous government for 2018–19 was $15 billion.
Examining Spending Practices
The line-by-line review of government spending over the last 15 years was conducted to identify ways the government could transform programs and services to ensure sustainability and value for money. The review demonstrated that Ontario taxpayers have funded significant and unsustainable expenditures.
The Province has already saved $3.2 billion in program expenses, while maintaining front-line services. This has reduced spending by about two per cent. These actions included:
- Freezing discretionary public-sector spending, including travel and meal expenses, as well as implementing a hiring freeze with the exception of essential front-line services.
- Making existing government programs more effective; for example, providing families more choice in child care programming.
The government has found savings and efficiencies, while giving individuals, families and businesses important tax relief. The government is proposing to stop the previous administration’s planned tax increases, such as the three-cents-per-litre increase on beer, and has cancelled the cap-and-trade carbon tax to strengthen Ontario’s economy.
The Path to Balance
The people of Ontario now have a clear picture of the province’s finances. While the road ahead will not be easy, the government is already taking action to make programs and services more efficient, and is working towards balancing the budget on a modest, reasonable and pragmatic timetable. In addition, the government will be adopting a debt reduction strategy.