ONTARIO BUDGET BLUES

It’s always a pleasure to go to Toronto on business, as I did last week for three days, and be reminded why we don’t like to go to Toronto on business for three days.

Toronto loves Toronto in a way that puts the word ‘smug’ out of work.

That is why it was so much fun to be there when the report by highly respected former federal public servant and later TD Chief Economist Don Drummond landed with such a shudder last Wednesday on the corner of both Bay Street, and main street.

To recap: Eleven months ago, Premier Dalton McGuinty, knowing that his economic and fiscal forecasts were almost criminally demented, appointed a commission headed by Drummond to review the state of Ontario’s finances, with a mandate above all others to tell the truth, and oh, by the way, to do so after McGuinty’s Liberal government was safely re-elected in the fall of 2011.

Tragically for the Ontario Liberals, Drummond did his job.

Executive summary:  Dear Ontario, you are Greece.

Economic growth won’t save you.  Higher taxes won’t save you. Manufacturing won’t save you.  Hope is not a strategy.  Your budget and fiscal plans are the equivalent of a pathetic comic book, and all your best and brightest young people are moving to the West.

The reason?

The Ontario government and public service is a grotesque, immense, bloated, overpaid, underperforming, dysfunctional, uncoordinated behemoth that is killing the dream.

The government itself is devouring the province it purports to serve.

A Japanese movie from the 1960s comes to mind about a rampaging dinosaur that ate Tokyo.

In response, McGuinty was courageously unavailable for comment, his Finance Minister Dwight Duncan downplayed the 385 recommendations, and the Toronto Star, doing their usual turn on the Comedy Channel, begs the government to be cautious lest we force seniors to choose between their pets, and rent.  (Actual headline).

What to make of all this?

Ontario is becoming Greece.

Election timing matters more than fiscal planning.

Taxpayers are treated like 8 year olds who don’t know what is going on.

And we have all built (or are building) governments we cannot afford.

But what Don Drummond told the Ontario government, and the Ontario people, is that after 145 years, it’s over.

Not a bad run for an empire, but over nonetheless.

Get out of Business Class, get back in economy, eat your peanuts, and get back to work, longer, and for less.

In the immortal words of the Poet Laureate of my generation, Bruce Springsteen, “…the foreman says those jobs are leaving boys, and they ain’t comin’ back”.

All this came on the same day that Alberta Finance Minister Ron Liepert delivered a speech in Toronto to the Economic Club of Canada where he announced that the Government of Alberta is “spending too much”.

He also told the audience that Alberta’s budget has to “get off the roller-coaster ride of relying on oil and gas revenues”.

By an unfortunate coincidence noted by many in his audience, this year’s Alberta budget relies on the roller-coaster ride of oil and gas revenues.

And next year.

And the year after that.

Alberta is poised to make the same disastrous bets we have seen before on using tomorrow’s oil and gas revenues to pay for today’s spending.

Anyway, between thinking about Ontario, Greece, and Alberta, it is always fun to be in Toronto with the CBC, the Maple Leafs, Mayor Rob Ford, traffic on the Gardiner Expressway, Pearson Airport, and February gloom.

And the Fairmont Royal York is still the best hotel in the country.

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