It's official: Ontario is completely broke

[turningrite]

Was anybody really surprised by today's news that Ontario's deficit is now pegged at $15 billion? The number is eye-popping, to say the least. Okay, the accounting rules have been changed to reflect the system favored and promoted by Ontario's auditor general, but even if Wynne's deficit figure had been adjusted to the higher level it would have stood at $11 billion and change, leaving a whopping discrepancy of more than $3 billion dollars. Given this mess, I think we now need to rethink the way government functions here in Ontario. With an abysmal health care system, a declining education system and a counter-productive social services system eating up the lion's share of tax and deficit dollars, can the current regime be maintained? My recommendation is major surgery. Otherwise, Ontario will be consigned to the dustbin of being a failed jurisdiction.

https://www.theglobeandmail.com/canada/article-ontario-deficit-at-15-billion-this-year-pcs-say-not-67-billion/

Edited September 21, 2018 by turningrite

[Hal 9000]

Sounds rough!

[Zeitgeist]

5 hours ago, turningrite said:

Was anybody really surprised by today's news that Ontario's deficit is now pegged at $15 billion? The number is eye-popping, to say the least. Okay, the accounting rules have been changed to reflect the system favored and promoted by Ontario's auditor general, but even if Wynne's deficit figure had been adjusted to the higher level it would have stood at $11 billion and change, leaving a whopping discrepancy of more than $3 billion dollars. Given this mess, I think we now need to rethink the way government functions here in Ontario. With an abysmal health care system, a declining education system and a counter-productive social services system eating up the lion's share of tax and deficit dollars, can the current regime be maintained? My recommendation is major surgery. Otherwise, Ontario will be consigned to the dustbin of being a failed jurisdiction.

https://www.theglobeandmail.com/canada/article-ontario-deficit-at-15-billion-this-year-pcs-say-not-67-billion/

Ontario has maintained better than the Canadian average growth and employment gains.  Our government services have been quite strong.  Having said that, the McGuinty-Wynne legacy includes big increases to Ontario's debt.  Cuts are necessary.  As long as the cuts are across the board, say 5-10% across all departments, then the government isn't picking winners and losers.  Going broad also means the government doesn't have to cut as deeply.  Hopefully most of the cuts can simply happen over time through attrition: Basically freeze hiring except where there's insufficient skill.  Also look at government assets.  Modest tax cuts should also provide some stimulation for the economy.  Some debt isn't a bad thing as long as interest rates are low and the debt to GDP ratio doesn't rise, especially if the spending is on infrastructure, as this kind of spending generates wealth in both the short and long-term.

[Michael Hardner]

So... if the Province was a person making $60K a year, they would be going into debt at a rate of $1,500 per year.  Actually it doesn't sound bad, except that we're in boom years and increasing debt rather than paying it down.   Stephen Harper's biggest deficit was $55B but that was at the height of recession and for all Canada, which has 2x to 3x the size of Ontario's economy.  And out debt 5x or 6x the annual GDP.

Are we broke ?  No.  We need to redesign our economy, though, and shutting down hospitals and schools isn't the answer.

Is Rob Ford the person to take us through the coming tough times ?  My God, no... He has already gone out of his way to piss off the largest city and GDP generator in the province/country so how is he going to unify the province when it comes time to cut ?

Few Premiers have the whiff of failure in their first weeks of governing.  This one does.

[Zeitgeist]

8 minutes ago, Michael Hardner said:

So... if the Province was a person making $60K a year, they would be going into debt at a rate of $1,500 per year.  Actually it doesn't sound bad, except that we're in boom years and increasing debt rather than paying it down.   Stephen Harper's biggest deficit was $55B but that was at the height of recession and for all Canada, which has 2x to 3x the size of Ontario's economy.  And out debt 5x or 6x the annual GDP.

Are we broke ?  No.  We need to redesign our economy, though, and shutting down hospitals and schools isn't the answer.

Is Rob Ford the person to take us through the coming tough times ?  My God, no... He has already gone out of his way to piss off the largest city and GDP generator in the province/country so how is he going to unify the province when it comes time to cut ?

Few Premiers have the whiff of failure in their first weeks of governing.  This one does.

I don't like DoFo's positions on the environment, and using the notwithstanding clause was a bit draconian.  On the other hand, we were living in la la land for 15 years under the Liberals.  Don't get me wrong, the Liberals accomplished a lot of positives.  I don't think Ontarians regret that period.  However, the debt has grown too high.  Raising the minimum wage, while progressive for workers, is a costly adjustment for businesses.  There needs to be a rebalancing wherein government and the public side of the economy are tightened so that businesses and consumers can pick up the slack.  However, we still need government spending, especially on infrastructure.  Ford shouldn't go extreme.  That would inflict unnecessary harm.  You're right, his actions on TO's city council are troubling.  Let's hope he shows moderation on other files.

[Michael Hardner]

I got it wrong also - the GDP is $830B in Ontario.  Also the budget is $141B so the deficit is >10% in boom times.

And we spend 10% of our budget servicing debt.

Edited September 22, 2018 by Michael Hardner

[turningrite]

3 hours ago, Zeitgeist said:

 Hopefully most of the cuts can simply happen over time through attrition: Basically freeze hiring except where there's insufficient skill.  Also look at government assets.  Modest tax cuts should also provide some stimulation for the economy.  Some debt isn't a bad thing as long as interest rates are low and the debt to GDP ratio doesn't rise, especially if the spending is on infrastructure, as this kind of spending generates wealth in both the short and long-term.

I think more radical surgery is required. And the transition needs to be completed quickly even though this will entail considerable pain. Infrastructure spending might not be the best idea at the present time, at least in the GTA, because the current construction boom is straining access to labour and materials and therefore the cost of building infrastructure at this time would likely be higher than under normal circumstances. And interest rates are predicted to rise, meaning that already stretched financial resources are going to become even more difficult to obtain. The situation is so bad that I can't help but think that this province is on the brink of collapse if something isn't quickly done to set the ship on a sustainable course.

[Zeitgeist]

We're fine.  A crisis would be a manufactured one because the fundamentals for Ontario are strong.  The important thing is that we stop spending more than we take in, or at the very least, that the trajectory for our debt is downward, even if only as a proportion of GDP.  This is possible if the economy continues to grow at a reasonable level and spending is modestly reduced.  We don't have a mess like the one the NDP left behind in the early 90's.  We're in a position of relative strength.  Tax cuts would modestly increase growth.  So would infrastructure spending.  Economic growth helps reduce the debt to GDP ratio.

[eyeball]

Quote

It's official: Ontario is completely broke

So just tax the snot out of the rich.

Problem solved.

[GostHacked]

12 hours ago, Michael Hardner said:

So... if the Province was a person making $60K a year, they would be going into debt at a rate of $1,500 per year.  Actually it doesn't sound bad, except that we're in boom years and increasing debt rather than paying it down.   Stephen Harper's biggest deficit was $55B but that was at the height of recession and for all Canada, which has 2x to 3x the size of Ontario's economy.  And out debt 5x or 6x the annual GDP.

Are we broke ?  No.  We need to redesign our economy, though, and shutting down hospitals and schools isn't the answer.

Is Rob Ford the person to take us through the coming tough times ?  My God, no... He has already gone out of his way to piss off the largest city and GDP generator in the province/country so how is he going to unify the province when it comes time to cut ?

Few Premiers have the whiff of failure in their first weeks of governing.  This one does.

You are in a state of perpetual debt. NOT good for anyone, but bankers.

[turningrite]

11 hours ago, Zeitgeist said:

"The important thing is that we stop spending more than we take in... Tax cuts would modestly increase growth.  So would infrastructure spending.  Economic growth helps reduce the debt to GDP ratio.

Well, your recipe seems to be based on decreasing revenues and tying expenditures to debt but promoting more infrastructure spending. I hate to tell you this, but this is a recipe for massive cuts. This is the conundrum Ford's government faces. Personally, I think we need to phase out most subsidy programs, particularly by introducing time limits on the receipt of social benefits and housing subsidies for employable people, introduce a "public option" health insurance scheme funded by premiums accompanied by permitting the sale of private health insurance, tying education funding and salaries to performance and contracting out public service administration as much as possible. I think these things are necessary to promote long-term fiscal stability for Ontario.

Edited September 22, 2018 by turningrite

[Michael Hardner]

2 hours ago, GostHacked said:

You are in a state of perpetual debt. NOT good for anyone, but bankers.

I agree that 10% of revenue paid for interest on debt is too much...

[Zeitgeist]

1 hour ago, turningrite said:

Well, your recipe seems to be based on decreasing revenues and tying expenditures to debt but promoting more infrastructure spending. I hate to tell you this, but this is a recipe for massive cuts. This is the conundrum Ford's government faces. Personally, I think we need to phase out most subsidy programs, particularly by introducing time limits on the receipt of social benefits and housing subsidies for employable people, introduce a "public option" health insurance scheme funded by premiums accompanied by permitting the sale of private health insurance, tying education funding and salaries to performance and contracting out public service administration as much as possible. I think these things are necessary to promote long-term fiscal stability for Ontario.

Ha ha, no way.  We have an amazing publicly funded education system, the best in the English speaking world.  There's no way we're going down the road of endless standardized testing, hollowing out our most vulnerable communities of education funding because of the high level of community needs, etc.  Canada consistently outperforms jurisdictions that have taken that approach.  We're closer to the mindset of Finland than Florida, by far.  On health, there is no way we're funding HMO's and driving up the percentage of our GDP that we spend on health care.  Universal health care has virtually become a right in Canada.  Which part of the U.S. are you from?  A big part of the reason why Ontario's debt seems higher than projected has to do with new accounting rules from the Auditor General that don't allow the Province to factor in $11 billion in pension surpluses as provincial assets.  Even Ford's party doesn't want this new accounting.  Ontario's finances are fine with some spending cuts across departments (without job losses) and the right kind of public spending that spurs growth (infrastructure, targeted smart tax cuts).

[Argus]

19 hours ago, Michael Hardner said:

Is Rob Ford the person to take us through the coming tough times ?  My God, no... He has already gone out of his way to piss off the largest city and GDP generator in the province/country so how is he going to unify the province when it comes time to cut ?

Few Premiers have the whiff of failure in their first weeks of governing.  This one does.

The people Ford has pissed off are largely the same people who will be enraged at any kind of cuts, including cuts to the annual salary increases for our insanely well-paid public servants.  We only need to go back to the Mike Harris days to predict how they're going to respond to that.

[Argus]

4 hours ago, Zeitgeist said:

Ha ha, no way.  We have an amazing publicly funded education system, the best in the English speaking world.

It might well be the most expensive in the English speaking world, but there's damn all evidence it's the best at anything.

[Argus]

17 hours ago, turningrite said:

I think more radical surgery is required. And the transition needs to be completed quickly even though this will entail considerable pain. Infrastructure spending might not be the best idea at the present time, at least in the GTA,

I don't have a problem with infrastructure spending (REAL infrastructure). Most of Ontario's budget is spent on social spending, though, and in fat salaries for everyone at every level of the public service, both provincially and municipally, as well as those working for school boards.

[Zeitgeist]

26 minutes ago, Argus said:

It might well be the most expensive in the English speaking world, but there's damn all evidence it's the best at anything.

Canada performing above all English speaking countries and near the top internationally in math, science, and literacy:

Canada's 15-year-old students among best global performers in science, math

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Students in Quebec, Alberta and British Columbia among the best in the country

Nicole Mortillaro · CBC News · Posted: Dec 06, 2016 1:36 PM ET | Last Updated: December 6, 2016

Canadian 15-year-olds are among the best in the world in science and science-based technology, according to a new report from the Organization for Economic Co-operation and Development (OECD).  Canada ranked fourth among OECD countries, tied with Finland and surpassed only by Singapore, Japan and Estonia, according to the report involving 540,000 students from around the world. Among all participating countries and economies, Canada ranked fourth.

The ranking comes from the OECD's Programme for International Student Assessment (PISA), which surveys adolescents every three years for their proficiency in science, math and reading. The focus of the testing, however, is science.

The results didn't differ much from 2006, when Canadian teens also were ranked high in science. In both 2009 and 2012, however, students scored slightly lower than in 2015.

Despite the high ranking for Canada, the Council of Ministers of Education, Canada, concluded in its report on the findings "that there is cause for some concern."

"Almost one in 10 Canadian students do not meet the benchmark level of science proficiency, a proportion which has not changed since the baseline year in 2006, and students in minority-language settings achieve lower results in science compared to their counterparts in majority-language settings," it said.

When it comes to mathematics and reading, 15-year-old students in Canada also performed well above the OECD average. Only Singapore surpassed Canada in reading.

Canada was also one of the highest-performing countries when it came to equity between boys and girls.

Provincially, students in Quebec, Alberta and British Columbia performed particularly well in science, among the best with the highest-performing countries and economies. 

Approximately 20,000 students were tested across 10 provinces in both English and French.

"The results from PISA 2015 are extremely gratifying. In every domain, Canada is not only near the very top internationally, we have increased our ranking since PISA 2012," Doug W. Currie, chair of the Council of Ministers of Education, Canada, and minister of education, early learning and culture for Prince Edward Island, said in a press release.

Edited September 22, 2018 by Zeitgeist

[Argus]

16 minutes ago, Zeitgeist said:

Canada performing above all English speaking countries and near the top internationally in math, science, and literacy:

Canada's 15-year-old students among best global performers in science, math

Math has become a flashpoint in many parts of the country as falling test scores have ignited debate about how the subject is being taught in schools. The discussion has been particularly intense in Ontario, where Premier Doug Ford has vowed to introduce a back-to-basics reshaping of the math curriculum.

Now more fuel has been added to the Progressive Conservative government’s agenda after the percentage of Ontario elementary pupils meeting provincial standards in math dipped to a record low.

https://www.theglobeandmail.com/canada/article-ontario-pushes-for-more-teacher-training-as-math-score-hits-new-low/

[Zeitgeist]

Nevertheless, Ontario's education system is very strong, better than any English speaking country's.  Be wary of major changes, especially given that the new Minister of Education doesn't have an education background.

[bush_cheney2004]

4 hours ago, Zeitgeist said:

Nevertheless, Ontario's education system is very strong, better than any English speaking country's.  Be wary of major changes, especially given that the new Minister of Education doesn't have an education background.

 

Do you mean to say that educational disparities, lower graduation rates, and higher rates of suspension for "visible minorities" and "aboriginals" is something to continue in Ontario ?

[turningrite]

10 hours ago, Zeitgeist said:

Ha ha, no way.  We have an amazing publicly funded education system, the best in the English speaking world.  There's no way we're going down the road of endless standardized testing, hollowing out our most vulnerable communities of education funding because of the high level of community needs, etc.  Canada consistently outperforms jurisdictions that have taken that approach.  We're closer to the mindset of Finland than Florida, by far.  On health, there is no way we're funding HMO's and driving up the percentage of our GDP that we spend on health care.  Universal health care has virtually become a right in Canada.  Which part of the U.S. are you from?  A big part of the reason why Ontario's debt seems higher than projected has to do with new accounting rules from the Auditor General that don't allow the Province to factor in $11 billion in pension surpluses as provincial assets.  Even Ford's party doesn't want this new accounting.  Ontario's finances are fine with some spending cuts across departments (without job losses) and the right kind of public spending that spurs growth (infrastructure, targeted smart tax cuts).

I'm from Ontario and live in Toronto. And I am personally quite aware of the deficiencies in our health care system and conscious of the shortcomings of our education system. If you live in Ontario, you seem to have much more confidence in these systems than do many of your co-citizens. A recent Toronto Star article indicated that confidence in the public education system is declining and the worsening problems in the health care system are widely acknowledged. (See links regarding these matters below.) I'm not proposing that we copy the American system. I'm suggesting that we look to other countries, like Taiwan and Switzerland, that more efficiently and at lower cost provide universal care and with greater efficiency than do we. I think we should consider a government-sponsored (i.e. "public option") insurance program funded by premiums but also permit private sector competition. The current system is a mess and simply can't be tinkered with for a fix. As for the restated deficit, I believe the PCs have argued that the auditor general's approach be adopted. Where did you get the idea that Ford's party doesn't want it? They might regret adopting it, but that's a different matter.  Small measures will not resolve Ontario's massive fiscal problems. As I said previously, radical surgery is required.

 

https://www.thestar.com/news/queenspark/2018/06/27/satisfaction-with-schools-and-teachers-is-on-the-wane-u-of-t-survey-finds.html

https://www.theglobeandmail.com/opinion/now-more-than-ever-we-need-to-solve-ontarios-health-care-crisis-of-capacity/article37490512/

[Michael Hardner]

6 hours ago, Argus said:

The people Ford has pissed off are largely the same people who will be enraged at any kind of cuts, including cuts to the annual salary increases for our insanely well-paid public servants.  We only need to go back to the Mike Harris days to predict how they're going to respond to that.

Ok, well I guess we'll see.  I would have expected him to have less opposition.  

[turningrite]

6 hours ago, Argus said:

I don't have a problem with infrastructure spending (REAL infrastructure). Most of Ontario's budget is spent on social spending, though, and in fat salaries for everyone at every level of the public service, both provincially and municipally, as well as those working for school boards.

I have friends who work or have worked at all three levels of government. It's my understanding that provincial salaries and benefits are by far the most generous. While municipal salary and benefits levels are all over the map, it's my understanding that these levels tend to fall below provincial government levels. I think these salaries and benefits should undergo comparison with private sector levels.

[h102]

O I am sure Ford will raise taxes and cut discretionary spending and be responsible to improve Ontario's deficit.

[Zeitgeist]

14 hours ago, bush_cheney2004 said:

 

Do you mean to say that educational disparities, lower graduation rates, and higher rates of suspension for "visible minorities" and "aboriginals" is something to continue in Ontario ?

You can only say some of these things because we are actually bothering to tackle these challenges.  It's a thing here.  We are looking at suspension rate data to ensure that minorities aren't being suspended at higher rates than whites.  We identified it as a problem and are actively tackling it, just as carding has been tackled by most of our police forces.  If you want to talk about inner city disparities, look no further than your own backyard in the U.S. to find them.  Our education system, by comparison of averages, is among the strongest internationally. 

With regard to the small indigenous communities in the north, yes education is an ongoing challenge in these communities.  Fixing it involves attracting teachers, the best ones who have many other options.  It involves ensuring that children's basic needs are addressed, which is not a given, as much of the housing and infrastructure was built by governments and needs constant upkeep.  It involves dealing with sometimes corrupt band councils, high addiction and suicide rates, inaccessible communities (except by plane), doctor shortages, the list goes on... If you have ideas about how to really solve the problems on some of our reserves, I'd like to hear them, because it involves people who have their own opinions about how they should manage their own communities even as they seek outside help.  Not easy.  

With regard to graduation rates, this from Ontario's Ministry of Education website:

 

Ontario's Graduation Rate

Ontario’s strong graduation rate and the overall gains that have been made highlight the hard work of students, educators and the support of their families.

In 2017, the five-year graduation rate was 86.3 per cent, and the four-year graduation rate was 79.8 per cent.

The Ministry of Education continues to publish School Board Progress Reports on its website. This section provides a variety of achievement information for each school board, including the board’s graduation rates and the trend over three years. The goal is to ensure parents, students, teachers and school boards have access to data that can help improve student achievement.

Student Success Strategy and Programs

Transforming high school for all students is the focus of our Student Success Strategy. It gives Ontario students a greater opportunity to customize their high school experience to match their strengths, interests and career goals.

The government has been providing support and resources for students who struggle, and providing all high school students with more learning opportunities that match their aspirations for the future. Read more about our Student Success programs.

Edited September 23, 2018 by Zeitgeist