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McGuinty’s unbalanced budget

After months of dire warnings that had Ontarians bracing for an economic squeeze, the provincial government released its 2012 budget Tuesday.

Dalton McGuinty’s financial blueprint is based loosely on economist Don Drummond’s report, and while it’s not quite as gloomy as that document, it sticks to the premier’s edict to leave Ontario’s tax structure unexamined in his quest to fix the province’s budget.

Instead the premier plans to balance the books by 2017-2018 with a mix of spending cuts and increased non-tax revenues like user fees. The plan is to reduce spending by $17.7 billion over three years and increase government revenues by $4 billion.

In a nod to the NDP, corporate taxes would be not be lowered, but planned increases in Ontario Works and Child Benefit payments would be put off. Meanwhile, public sector employees are being asked to accept a two-year wage freeze and contribute more to their pensions while accepting reduced payouts.

Already the Registered Nurses Association of Ontario is warning that failure to raise Ontario Works and Child Benefit assistance rates will only result in increased health care costs, “as there is overwhelming evidence linking poverty with increased illness and premature death.” The nurses are however praising the government for committing to improving access to same-day and next-day appointments with primary health providers in an effort to unclog ERs, and for ignoring Drummond’s recommendation to look into for-profit health care.

The Ontario Council for Hospital Unions is also slamming McGuinty’s failure to raise social assistance rates, calling the budget’s impact on social inequality “Victorian.” Council president Michael Hurley says current Ontario Works payments are below subsistence levels and those on welfare, the majority of whom are women and children, cannot afford adequate food or shelter. The budget “will cost us all in the future,” Hurley says. “People’s health is adversely affected and the long-term health system costs are tremendous.”

Ontario Federation of Labour presidentSid Ryan says that unless taxes for corporations and the financial sector are increased, Ontario’s budget will be balanced on the backs of the poor instead of on those of the groups that directly contributed to the provinces recent economic woes. “What we’re finding is that workers, some fairly low paid in the public sector, and on the top of that those who are most vulnerable and are on welfare, have to bear the brunt of paying down this deficit,” Ryan told CBC Radio Tuesday. “That’s grossly unfair.”

The Coalition for Better Child Care is sounding the alarm that unless McGuinty puts money back in the budget for child care, the system could collapse. “When I hear about austerity, I reflect on the child care sector, where funding has been frozen for 15 years,” says coalition president Tracy Saarikoski. “We have been operating under austerity for these years, and the sector cannot be sustained any longer.” The coalition is seeking $287 million to “stabilize” child care, a new affordable fee structure for parents, and a hold on any new licences for for-profit facilities.

There is already speculation that the Liberal minority government could fall over this budget. Conservative leader Tim Hudak immediately announced his party will vote against it, charging that by canceling corporate tax cuts, the budget “puts up roadblocks to the very economic growth its assumptions are pinned on.”

NDP leader Andrea Horwath says the budget “falls short on the challenges facing families” but pledged to consult with the public before deciding whether to support it.

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