The Ontario Budget: Now Comes the Hard Part

3 minute read

By: Brad Graham, Vice President, Toronto

When the Ontario government released its first Budget on April 11th much of the talk was about what the government didn’t do as opposed to what it did. What the Ford government didn’t do was present an aggressive timetable to eliminate Ontario’s deficit.

The Ford government has said it will balance the budget by 2023-24. The balance target year is just beyond the next provincial election and only one year earlier than had been promised by the previous Liberal government.

Why didn’t the Ford government move more swiftly and deeply in cutting expenditures? Because it is hard.

In its first year, the Ford government reduced the projected deficit of $15 billion in 2018-19 to $11.7 billion. This was the result of rollbacks and cancellations of programs announced by the previous government, a freeze on all discretionary spending and new hiring and improvements in some revenue streams.

That was the easy part. The hard part? What is going to come next.

Two things are inevitable over the next four years: valued public services will be reduced or eliminated and there will be lay-offs in the public sector. The fact that three quarters of Ontario’s $163 billion in annual spending goes to health, education and social services assures the former, and the fact that wages and benefits constitute about one half of all government spending guarantees the later.

This will present many challenges for both the public servants at Queen’s Park as well as over 200 transfer partners, agencies, boards and commissions that make up the broader public sector (BPS). At Queen’s Park, attrition initiatives will continue and there will be very limited new hires into the Ontario Public Service. This will mean doing much more with much less for those left.

At the same time, public servants will have to work with the BPS to redesign services, identify efficiencies and develop new policies to lessen the impact of declining resources for important public services. This will mark a huge sea change from the previous 15 years. It is much easier and professionally more satisfying to design new programs with new money than it is to find ways of doing more with less, or doing nothing at all.

And make no mistake: the BPS will bear the vast majority of the fiscal restraint as about 80 per cent of all government spending goes to the transfer partners, agencies, boards and commissions that provide services directly to the people of Ontario. The sector can expect a mix of continued hiring freezes and restrained spending, significant reforms, program eliminations, across the board reductions and an expectation to do more with less.

None of this is to say that spending restraint should not occur. However, at the end of the day, the entire governance ecosystem in Ontario can expect to feel the pain. The key challenge is how the public sector responds. Public servants at Queen’s Park and those in the broader public sector are going to have to work together and be diligent, innovative and imaginative to continue to provide valued services on behalf of the Government to the people of Ontario.