Turns out there was nothing crooked about the provincial government deficit - other than it was far too big.

Rivers 100x100By Ray Rivers

September 28th, 2018

BURLINGTON, ON

 

There is a 2004 provincial law on the books which mandates that the provincial auditor general (AG), an independent officer of the legislature, conduct a detailed audit prior to a provincial election in order that any incoming government should not have to do what Premier Ford has just done – commission his own financial review.

Ford with documents

Premier Ford with the budget.

As it turns out Ford’s team, headed by former B.C. premier Gordon Campbell conceded that the AG’s audit was correct. There had been a $5 billion dollar dispute over deficit numbers between former premier Wynne and the provincial auditor. And Campbell determined that this was due to a change in accounting practices being demanded by the AG. The dispute centered on the AG wanting to change how pension surplus and costs borne by a crown corporation are accounted.

But there was no payola by the Libs to their friends. There was no sign of corruption committed by Liberal politicians with their sticky fingers in the public cookie jar. There was only one set of books and they hadn’t been cooked by the Premier’s folks. In short there was no wrongdoing. If there was any conspicuous money wasted it would have been by Ford conducting his own unnecessary review at public expense – but that is another story.

Auditor General - Ontario

Bonnie Lysyk, provincial auditor general.

Of course, Kathleen Wynne was wrong. She should have listened to the AG, despite her own counsel and her obvious desire to minimize the deficit numbers for political advantage. It was the AG’s job to prepare the official audit and her results should have been the final ones. But as a consequence of the dispute the amount of the deficit became a distraction and allowed Wynne’s opponents to cast doubt and throw false aspersions on her and the entire Liberal financial record.

That turned out to be unfortunate for her and all those Liberal candidates who must have had doors slammed in their faces on the campaign trail. No question, that controversy helped propel Mr. Ford into office on a totally unjustified claim that the Liberals were dirty and crooked. Though he was on the road to winning anyway. And there was a huge deficit number to deal with for which none of the political leaders had a plan. So the NDP stuck with Wynne’s smaller numbers and Ford didn’t even bother developing a financial platform, his expensive promises were so obscene.

407_sign

$3 billion for thee 99 year lease on the 407 toll road

Some folks would argue that Ontario has a spending problem, the conclusion of another study completed for Mr. Ford by consulting firm Ernst and Young. The solution, most likely dictated by Mr. Ford, himself, is the beginning of a season of fire-sales, selling off crown assets like the LCBO and maybe other infrastructure. That is an historical Tory practice. To balance his 1999 budget Mike Harris gave a 99 year lease for $3 billion on the 407 highway.

Others say we have an income problem. We don’t charge people enough for all the services we provide. And of course getting rid of the cap and trade carbon tax has just made it worse. Ernst and Young suggested that we need to drop universality of public programs – make those who can afford the services pay. But we already have a progressive income tax which means that those with an ability to pay do so in higher taxes.

For example our provincial health tax already addresses people’s fair contribution to the health care system. Perhaps we need to augment the progressivity to help pay for OHIP plus rather than just adding to debt, though. The Ernst and Young report notes that the biggest rise in costs over the last fifteen years has been in education and health services. These are ongoing and systemic variable costs. It is not clear how the one-time income from selling capital assets like the LCBO will secure future finding for these areas.

The one thing Ford’s studies and even the AG’s report confirmed is that there was no wrongdoing by the Liberals in their fifteen years of governance. That doesn’t mean there weren’t mistakes like the gas plant fiasco, but there was nothing criminal. That means that Doug Ford was wrong to accuse the Liberals of criminal wrong doing, as he seemed to do when he accused them of giving contracts to their Liberal friends.

And for all of that misinformation during the campaign and even afterwards, Ford owes the former premier and the people of Ontario an apology. Though instead of being contrite for his outrageous behaviour, Mr. Ford appears to be taking a page out of the US president’s playbook. Much like Trump, Ford is holding rallies, presumably to prolong his victory celebration and build his following. He won the election, Wynne lost, isn’t it time he moved on. Wynne is being a good loser, why can’t he be a good winner?

Ford Fest 2018

Ford Fest – held in Vaughan this year.

At his last rally, the so-called Ford-fest or Ford-stock, last weekend, with five thousand cheering fans on hand, rockstar Doug couldn’t help himself from going way over the top. He over-spoke that the previous government had committed the “largest financial cover-up in history”. And the response to that piece of hatred was predictable – his flash mob couldn’t restrain themselves from chanting an enthusiastic Trumpian “Lock her up”.

Seriously? What has happened to civility in this country, fair play and sense of justice? Didn’t Premier Ford just make a public statement on hate speech. Do the bullies in that Ford flash mob, and their leader, really think the former premier should get jail time for using an arguably inappropriate set of budgetary statistics in her campaign for re-election. It’s not like she was a drug dealer, crack cocaine addict or drunk driver.

Rivers hand to faceRay Rivers writes regularly on both federal and provincial politics, applying his more than 25 years as a federal bureaucrat to his thinking. Rivers was once a candidate for provincial office in Burlington. He was the founder of the Burlington citizen committee on sustainability at a time when climate warming was a hotly debated subject. Ray has a post graduate degree in economics that he earned at the University of Ottawa. Tweet @rayzrivers

 

 

Background links:

Ernst and Young –     Auditor General –     Pre-election Report

Ford-Fest –     Hate Speech

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5 comments to Turns out there was nothing crooked about the provincial government deficit – other than it was far too big.

  • Connor Fraser

    Interesting article Mr. Rivers. While I am saddened that the Ontario Conservatives have regrettably taken a turn towards the nasty partisan politics of our southern neighbours, it is important to remember that years of liberal government were marked by several scandals. FOR EXAMPLE, please refer to this article from 2009 (e-health scandal):

    https://www.cbc.ca/news/canada/toronto/ehealth-scandal-a-1b-waste-auditor-1.808640

    In reviewing how the Liberal government of Dalton McGuinty (under which Kathleen Wynne was a cabinet minister at the time) awarded contracts for developing an ehealth framework to consultants, auditor general <>

    If you carefully read between the lines (seriously, it’s really easy to miss), this translates into plain english <>.

    So, I don’t understand why you think that Fords allegation that the Liberal government was <> is an outright lie. There is obviously some truth to the matter.

    Perhaps the [principle] reason why the Liberals lost the election is because they consistently demonstrated a sorry lack of respect for Ontario taxpayers ($1 billion blown for e-helth, $1+ billion for the gas plants, Ornge, etc.) who finally called them out. Maybe Mr. Ford had a role to play with his own diatribe of lies, but I suspect any Conservative leader with would’ve won the election handily.

    Oh and by the way, Kathleen Wynne is a sore loser. Recall Wynne asking for Liberal official party status immediately after she lost the election (https://www.nationalobserver.com/2018/06/08/news/wynne-hopes-official-party-status-liberal-rump), again demonstrating the same sort of arrogant entitlement which lost her so much support, much similar to Hillary Clinton south in the 2016 (if I may draw a parallel of my own to the US elections south of the border as you have, Mr. Rivers).

  • Mike

    On the 407, the reality is that is was a great deal. Regardless of the finances and how they are helping pension funds or private companies, the main issue which the government at the time understood, was that if left in public hands, it would cease to provide the value it was constructed for – traffic relief. To managed traffic to keep it moving, the price is adjusted (upward) to to point that only those willing to pay for the service at that level use it which keeps it moving …basic economics. The government could never do this as there would be picketing, cries of unfairness for the disadvantaged, etc. etc. So it works but it is a 2-tier system. If Ontario was transit to work, there is likely more of this model needed.

    In the sins of the Liberals and their finances. I believe everyone would surmise that there is not criminality at play, that said, the general surmising is that there was lots of favoritism in how deals were done even though we are supposed to have an impartial procurement process in the government. This can be diminished however with transparency of information. Remeber McGuinty and his Green Energy Plan and all the jobs – what happened and where are they? Remember the secret Samsung deal, rumoured to be worth Cdn$5 billion – what is the real deal. The tragically un’Fair’ Hydro Plan – provide real disclosure of the cost of this deal and when then rates go back up how this affects Ontarians (it is a straight refinance of debts owed so claiming through accounting it is an asset is just political BS).

    Transparency of information has a way of letting folks decide on their own. If Wynne was truly smart politically, she would have stood by her principles and provided fair and accurate information. Instead she choose the other, typical political direction of feeding people what she and he pundits thought would save her seat, forgetting being the Premier is about leadership too and on that account, she failed.

  • Bill statten

    I believe the 407 is 40% owned by our very own Canada Pension Plan. So, every time someone drives on it, our pension is further enhanced.

    Also, a Canadian public company , SNC Lavalin, owns 17% too. We are free to invest in the shares of that company if we wish.

  • Gary

    I live on a pension (not a politician level pension) and I drive the 407 from time to time. Life is short and I don’t want to spend 2.5 hours trying to get home or to an appointment on the 401 when I can do it in less than an hour on 407. I have no way of gauging whether the prices charged are “outrageous” compared to the costs of maintaining and improving the highway, but I am willing to pay them to transit across the top of Toronto conveniently.

  • Steve D

    Selling of the 407 was a mistake. It’s not a highway for the people anymore, it’s a highway for the well off. What the owners,, who don’t have to be reelected, quickly figured out was that by charging outrageous prices to use the highway, they can make more money since the wear and tear on the highway would be drastically reduced by cheap volume.

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