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Cutting to the chase on the Drummond report

Is Ontario really headed for doomsday? The stench of austerity in the air since Don Drummond released his report last week is so stiff you can cut it with a knife.

Should the McGuinty government follow through, it will absolutely damn Ontarians to more poverty and inequality. It could also drive the province’s fragile economic recovery into the abyss.

Is this really the medicine we need? Go beyond the big numbers at the top and the storyline of the Drummond report itself becomes decidedly contradictory. Many of its detailed recommendations read much more like a call for innovation than for austerity. In many ways, Don Drummond has actually dressed a sheep in wolf’s clothing.

Who involved in administering or receiving health care does not want to see better patient-focused coordination of health care services? Who in social assistance doesn’t want people receiving welfare (OW) and people on disability (ODSP) to have equal access to employment services?

The report repeatedly places explicit value on forward-thinking public policy. Of course this is where the province must head.

In fact, McGuinty should embrace this part, Drummond’s inner sheepishness, and make Ontario the soft, cuddly place we deserve.

Meanwhile, he should throw Drummond’s wolfish calls for the flesh to be ripped off the bones of government into Grandma’s oven where they belongs.

The report itself hints strongly that McGuinty’s “no new taxes” rhetoric is a bust. It notes that the province has been very responsible in the way it’s dealt with tough times so far. In addition to the global meltdown, he says the biggest issue for Ontario’s economy has been the ascent of Canada’s dollar, which has hovered around par with the U.S. greenback for the last four years, making Ontario’s exports increasingly uncompetitive. That would be how we here are sadly hobbled by Alberta’s petro-fuelled economy. But no matter the cause, the report couldn’t be clearer that Ontario’s spending is not the critical problem.

He clearly notes that “by current international standards, Ontario’s debt is relatively small. We are a very long way from the dreadful fiscal condition of countries that have dominated the news over the past two years.”

Here’s more essential Drummond: “No one should get the impression from all this that spending is out of control or wildly excessive. Indeed, Ontario runs one of the lowest-cost provincial governments in Canada relative to its GDP and has done so for decades. We must also recognize that important steps have been taken in recent years to help manage costs, improve prospects for future economic growth and enhance services to the public.”

So what do we do to continue in this relative balance as the economy transitions into a very different future?

Even though taxation was explicitly excluded from his commission’s mandate, Drummond can’t resist mentioning that there is room for the province to increase revenue even without raising taxes, through measures like tightening up on the underground economy and earning more from Crown corporations, for example.

And he can’t help noting, “as an aside,” that over the next five years, for a variety of reasons, the “overall tax burden” in Ontario relative to the GDP (gross domestic product) will go down. And, yes, by the way, it turns out that number of these reductions will favour the 1 per cent.

They include lower corporate income tax rates and revenue losses from the increased use of Tax-Free Savings Accounts, for example.

What’s wrong with this picture?

Among its 362 recommendations, everyone can find something in the massive document to confirm their own perspective. That said, there’s plenty here to affirm the idea that our minority government can successfully find a sweeter balance, relying on both innovation and taxation, not austerity, to keep government debt in check and prepare Ontario for a smart and caring future at the same time.

alice@nowtoronto.com

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