Letter to the editor – Budget

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Dear Editor,

A previous article by Colin Creasey, titled “What’s the big picture on the carbon tax?” makes some points about the new Ford government and their carbon tax fight with the federal government. For example, one point concerns fines of $10,000 on gas station owners for not displaying carbon tax stickers on their gas pumps. I agree that the fines, if true, are a mistake. Other points the author makes I may, or may not, agree with, but I’m very alarmed by his implication that our large provincial government debt is not such a bad thing. The 2019 interest expense of the Ontario provincial debt is $12.5 billion. This is money that the province is losing every year, and projected to rise to $16.5 billion in 2024. How many services (including climate mitigation) could be funded by this interest expense? What if interest rates increase substantially?

What’s the big picture on the carbon tax  by Colin Creasey

The $12.5 billion interest expense works out to about $867 per resident of Ontario, or about $1,650 per person employed in the labour force. What could you do with an extra $1,650 per year in your annual household budget?

The new Conservative government is cutting the budget and making some mistakes. I personally don’t agree with cutting the 50 million tree program and the large cut to the SOLS budget. In general though, any fiscally responsible adult must recognize that we can’t keep growing this massive debt pile. To eliminate the deficit, you would need to cut the budget by 8.34% across the board. Budget cuts proportional to this percentage – with some adjustments in critical areas – would be more appropriate, rather than wholesale elimination of vital programs.

Some studies show that the average provincial employee salary premium over the private sector (for comparable work) is around 21% (from CFIB 2015), if you include benefits. The Sunshine List shows that over 130,000 provincial employees make well over $100,000 per year. If you add the pensions and benefits, it’s substantially more. Since wages, benefits, and pensions are by far the largest expense of the provincial government, maybe this is where the province should focus its cost cutting programs. You don’t even have to lay off any provincial employees. A salary, benefit and pension freeze would be a good start. After all, MPP’s have had their salaries frozen for the last ten years at $116,000 per year.

I support the effort by this government to be fiscally responsible, keeping in mind that this effort requires criticism and debate.

Stephen Hammond

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