ontario liberals - kathleen wynne and dalton mcguinty era - january 2018
TRANSCRIPT
Paul Young - Bio
• CPA, CGA• Academia (PF1, FA4 and MS2)• SME – Risk Management• SME – Close, Consolidate and Reporting• SME – Public Policy • SME – Financial Solutions• SME – Supply Chain Management
Contact information:[email protected]
Summary / Ontario
Ontario GDP will grow at pace of 1.8 to 2.3% for the next decade or so.
Ontario has spending a problem - https://www.fraserinstitute.org/studies/spending-is-the-source-of-ontarios-deficit-and-debt-problem
Moodys has downgraded bonds and put Ontario on watch (http://www.metronews.ca/news/canada/2015/02/23/ontario-has-a-serious-spending-problem-finds-credit-report.html)
Budget watchdog also doubts Ontario will balance the budget -http://business.financialpost.com/news/economy/ontario-watchdog-says-balanced-budget-unlikely-for-several-years-despite-liberals-pledge
Healthcare professionals are saying the system is max (https://cupe.ca/1000-hospital-staff-travel-great-distances-kingston-rally-end-funding-freeze-choking-ontario
Ontario has issues with delivery of precious tax dollars to programs like healthcare, education, etc.
Hydro rates are schedule to go up after 2019 - https://globalnews.ca/news/3827189/hydro-ontario-plan-cost/
Government Revenue/Ontario
Source – Government of Ontario, Stats Canada and Federal Government of Canada
Commentary and Analysis• McGuinty introduced harmonized sales tax• McGuinty introduced Ontario Health Premium tax• Ontario is recipient of equalization payments• Wynne is selling of assets, i.e. Ontario Power Generation• Wynne is introducing carbon taxes / 2017• McGuinty cut corporate tax rates • Ontario loss over 300,000 manufacturing jobs• Ontario growing public sector jobs greater than private
sector
Government Spending/Ontario
Source – Government of Ontario, Stats Canada and Federal Government of Canada
% of Expenses /Spending
Analysis Commentary• Harris spent close to 40% on healthcare as compare to McGuinty and
Wynne that spend approximately 38% on healthcare• LHINs and CCAC were created but have done little in terms of improving
wait times and/or controlling of costs• Education received more money, but we have more grads having hard
time finding jobs. Meanwhile. Ontario has significant skills gas that could influence FDI
• Wynne pledge to bring the debt down to 26% of GDP. If Wynne were to bring the debt down then should need to reduced the debt by $10B per year.
• Drummond report was virtually ignored and it was succinct in terms of Ontario has spending problem. Ontario is spending from 18.5 to 17.5% of GDP of government and only taking in 16.8% in revenue. More taxation is not the answer
Cap and Trade
http://www.torontosun.com/2017/04/11/wynnes-cap-and-trade-lacks-transparency
First, cap and trade doesn’t just impact the cost of home heating fuel and gasoline, but almost all consumer products. Food, for example, is grown and transported to market using fossil fuel energy, so when the price of gas goes up due to cap and trade, so does the price of food. So does the price of fertilizer.
The second problem is that Wynne’s government was 34% low in predicting monthly natural gas bills for average homeowners would rise by $5.
The average price increase since Jan. 1 has been $6.70 per month, according to natural gas suppliers, while many homeowners report their bills are rising faster than that, as the actual increase depends on the amount of natural gas a household consumes.Meanwhile, the Wynne government refuses to break out the new cost of cap and trade on home heating bills, although it tells hydro ratepayers in every bill, down to the penny, how much its 8% rebate on the provincial portion of the HST is saving them.
Toronto Sun – Lorrie Goldstein – April 11, 2017
Key areas of waste
P3 Costs $8B (source: http://www.thestar.com/news/queenspark/2014/12/09/publicprivate_financing_cost_ontario_taxpayers_8_billion_auditor_says.html)
Equalization $10B (http://www.fin.gc.ca/fedprov/mtp-eng.asp#Ontario)
Gas Plant Cancellation $1.1B (http://www.thestar.com/news/canada/2013/10/08/liberals_power_plant_cancellations_cost_11b_auditor_general.html)
eHealth $1B (http://www.cbc.ca/news/canada/toronto/ehealth-scandal-a-1b-waste-auditor-1.808640)
Selling excess power $1B/year http://kitchener.ctvnews.ca/ontario-paid-1-billion-to-export-surplus-power-in-2013-ndp-say-1.1647299 - 2013 amount only)
Wind Subsidies $1B/year (http://www.netnewsledger.com/2014/03/05/ontario-wind-energy-plans-costing-1-billion-annually/)
Ontario capital Expenditures $11.8B (http://www.fin.gov.on.ca/en/budget/paccts/2014/)
Ontario shares of gas tax $750M (http://www.infrastructure.gc.ca/alt-format/pdf/GTF-FTE-20140905-eng.pdf)
Municipalities Capital spending $6B (http://www.amo.on.ca/Advocacy.aspx?searchtext=capital&searchmode=exactphrase&date=0;&issue=0;&category=0;)
Wynne’s AIT Issues - http://www.cbc.ca/news/canada/saskatchewan/saskatchewan-premier-brad-wall-concerned-about-ontario-quebec-position-on-energy-east-1.2848930.
Oliver and Wynne barb over infrastructure - http://www.canadianmanufacturing.com/procurement/ontario-ottawa-trade-barbs-infrastructure-funding-plan-142206/
Broken Arbitration system - http://www.lfpress.com/2014/02/22/small-municipalities-across-ontario-crushed-by-soaring-opp-policing-costs - Wynne was McGuinty’s right hand person - https://www.theglobeandmail.com/news/politics/mcguinty-defends-85-per-cent-pay-hike-for-opp-in-2014/article1360155/
Forest Management cuts - http://www.torontosun.com/2013/12/17/liberals-latest-disaster-in-works-leaves-northern-ontario-vulnerable
Drummond Report
Source - http://www.cbc.ca/news/canada/toronto/drummond-report-on-ontario-calls-for-cutbacks-1.1138568
The Ontario government must curtail its spending with the kind of cuts not seen since the Mike Harris years, according to a report by former TD Bank chief economist Don Drummond.
Released Wednesday, Drummond’s report calls for extensive spending reductions and warns that without his recommended belt-tightening, the province will face a crippling $30-billion deficit by 2017-18.
Drummond warns that failing to follow such severe austerity measures could cause Ontario’s debt, which currently stands at $215 billion, to balloon to more than $411 billion in five years.
February 15, 2012
Moodys / Spending Ontario
https://www.thestar.com/business/economy/2015/02/23/moodys-says-ontario-has-a-spending-problem.html
Education
https://www.thestar.com/yourtoronto/education/2017/05/04/121-ontario-schools-slated-to-close-report.html
Education Funding
Source – Government of Ontario
2015-2016A 2016-2017A 2017-2018
25.1 25.7 26.5
% change 2.4% 1.6%
• Ontario Government includes the pension adjustment that AG disputes -https://www.thestar.com/news/queenspark/2017/02/13/pensions-are-an-asset-expert-panel-concludes.html
• Rural school closing continue to happen due to declining enrolment • Students are failing in areas like math and sciences -
https://www.thestar.com/news/canada/2017/08/30/math-scores-flat-falling-among-ontario-elementary-students.html
• Government has allow school boards to handle pay increases and/or other costs -https://tvo.org/article/current-affairs/the-next-ontario/ontarios-school-boards-are-a-mess-we-made
Education / cuts
https://www.thestar.com/yourtoronto/education/2017/05/04/121-ontario-schools-slated-to-close-report.html
http://www.thepeterboroughexaminer.com/2012/06/14/catholic-school-board-laying-off-10-library-support-specialists
http://www.lfpress.com/2013/04/23/london-district-catholic-school-board-says-declining-enrolment-behind-reductions
http://www.newswire.ca/en/story/141683/sixty-percent-of-school-boards-to-cut-jobs-more-expected-liberal-failure-to-fix-faulty-
funding-formula-creating-another-year-of-crisis
http://metronews.ca/news/toronto/260938/toronto-and-peel-school-boards-prepare-for-biggest-cuts-since-harris-years/
http://campaignforpubliceducation.ca/?p=1416
http://www.therecord.com/news-story/2594137-catholic-school-board-cuts-20-full-time-jobs/
http://weareontario.ca/index.php/windsor-essex-catholic-school-board-cuts-11-2-million/
Ontario Healthcare
Source – Government of Canada and Ontario Government
2015-2016
2016-2017
2017-2018
$13,095 $13,899 $14,362
Change 6.1% 3.3%
Federal Transfer for Healthcare
2015-2016
2016-2017
2017-2018
$51,011 $52,206 $53,753
Change 2.3% 3.0
Ontario Transfers to Healthcare
• Hospital funding issues - http://healthydebate.ca/2015/02/topic/politics-of-health-care/philanthropy• Hospital costs - http://www.lfpress.com/2017/03/21/hydro-london-health-sciences-centre-electricity-use-
falls-but-costs-up-30-per-cent• Funding - https://www.thestar.com/life/health_wellness/2015/04/22/budget-will-see-tough-decisions-in-
health-care.html• LHINs and CCAC - https://www.thestar.com/life/health_wellness/2015/11/06/community-care-access-centres-
likely-to-be-dismantled.html
Healthcare
PBO - http://cupe.ca/canadas-health-care-system-about-lose-36-billion. Yet nothing is said on the waste with healthcare, why? http://www.nugget.ca/2015/03/31/workers-rally-for-new-health-accord. It seems like unions are complaining at funding from the Feds, but say nothing on the LHINs or CCAC - http://blogs.windsorstar.com/opinion/the-stars-view-time-to-audit-ccacs-and-the-lhins or revenue like Ontario Health Premium that does not go to healthcare -http://www.fin.gov.on.ca/en/budget/paccts/2014/14_cfs.html#operations
Arbitration
Ontario has never fixed its arbitration process - http://business.financialpost.com/opinion/the-ontario-laws-that-force-cities-to-keep-spending-more-on-unionized-workers
Firefighting Costs
http://www.theobserver.ca/2015/10/29/confusion-swirls-over-impact-of-fire-service-cutbacks or http://www.owensoundsuntimes.com/2017/01/17/owen-sound-aims-to-stem-fire-costs
Jobs and Prosperity Fund
Source -http://www.auditor.on.ca/en/content/news/15_newsreleases/2015news_3.04.pdf
Fair Hydro Plan
Liberal supporter,
So, Fraser Institute is wrong, right? So, is the AG report wrong as well? http://www.auditor.on.ca/en/content/news/11_newsreleases/2011news_3.03.pdf
Ontario AG http://www.auditor.on.ca/en/content/specialreports/specialreports/FairHydroPlan_en.pdf or http://www.cbc.ca/news/canada/toronto/ontario-hydro-auditor-general-report-fair-hydro-plan-wynne-1.4358168
I have done my own work through reviewing different information and high hydro rates have driven out business -https://www.slideshare.net/paulyoungcga/failed-clean-energy-policies-ontario-wynne-and-mcguinty
Ontario businesses are at the breaking point with the Liberals as they have seen carbon taxation, elimination of EHT threshold, high hydro rates, planned hikes to minimum wage, etc. Business can adjust to government policies, but not when they continue to be slammed by Wynne with bad after bad policy!
Jobs replaced by manufacturing have been lower in pay, like retail/transportation/etc. https://beta.theglobeandmail.com/report-on-business/economy/census-2016-statscan-income/article36242392/?ref=http://www.theglobeandmail.com&
Mistake that broke Hydro
https://www.pressreader.com/canada/national-post-latest-edition/20161124/281681139477783
“Your new government will restrain program spending to reduce Ontario’s debt-to-GDP ratio, while recommitting itself to eliminating the deficit by 2017-18.And after that, it will restrict overall spending increases to 1% below GDP growth until the province’s debt-to-GDP ratio returns to the pre-recession level of 27%.Sources:http://tvo.org/transcript/2098464/video/programs/the-agenda-with-steve-paikin/kathleen-wynne-ontarios-25th-premier or http://www.ontla.on.ca/web/house-proceedings/house_detail.do?Date=2013-02-19
Mining Investment – 2016 Ranking
Source - http://www.mining.com/canadas-saskatchewan-manitoba-worlds-new-top-mining-destinations/
Ontario rank 18th a fall of three spots from 2015
Automotive Sector / Ontario
Source - https://apma.ca/auto-sector-can-drive-ontarios-economy-forward-again/
Article did not mentioned the following areas
• Carbon Taxation• Elimination of the EHT
threshold for large payrolls• Hikes planned for CPP • Hikes to property tax
Sensitivity Analysis - Ontario
• Ontario would need to both increases in revenue as well as cuts to spending. This would mean running surpluses between $5B to 8.5B for five years to bring the debt to gdp to 27%.
Dear LPC or NDP supporter,
I also work in fortune 500 for many years and that is also not the case in terms of adding 100K salaried employees. In fact there has been cuts to high salary as part slashing middle to senior management positions with firms.
The bulk of the business are small to medium size as such they do not pay 100K salaries very often as they cannot afford the costs.
The government goes by its own drum as such does not necessarily align their pay scales with the private sector.
Public Sector workers on average are paid 13% more than the private sector. The compensation earned by government workers is theissue with me! http://www.cfib-fcei.ca/english/article/6301-a-closer-look-at-private-public-sector-wage-gaps.html
There many reason why system is broke:
arbitration is not align with ability to pay
Government pay grid is out align with private sector
pension funding is not sustainable
Government does not operate in competitive environment as such there is no pressure on wages other than internal restrictions.
There are too many duplicate departments as such they add cost to the system (LHINs, CCAC, etc)
Approximately 50 cents of any dollar spent by government is related to payroll. Ontario has $11B deficit as such half of the deficit goes to compensation. http://www.slideshare.net/paulyoungcga/ontario-tax-and-spend-analysis
Homecare
Wynne created the mess through focusing money on new departments. Wynne has no clue what it takes to deliver dollars to patients!
https://www.slideshare.net/paulyoungcga/healthcare-crisis-in-canada-january-2018
AG – LHINs and CCAC - https://www.theglobeandmail.com/news/national/auditor-general-finds-wide-variation-in-home-care-supports-across-ontario/article27565501/
Wynne and the Economy
How about the fact your government has lost 75,000 mfg jobs?
http://business.financialpost.com/opinion/75000-manufacturing-jobs-lost-thats-the-price-of-ontarios-electricity-disaster
How come incomes have grown only 3.8% for 10 years?
http://www.cbc.ca/news/politics/statistics-canada-census-2016-income-hightlights-1.4287179
Wynne Failed Policies
http://www.cbc.ca/news/canada/toronto/kathleen-wynne-ontario-election-2018-1.4455076?cmp=rss
“More to come, right?”
Minimum Wage will see job losses – https://globalnews.ca/news/3736740/ontario-minimum-wage-hike-job-losses/
Hydro Rates are going up after 2019 - http://business.financialpost.com/opinion/a-whole-new-way-screw-up-hydro-is-underway-in-ontario-and-b-c
Hospital continue to cut - https://www.baytoday.ca/local-news/hospital-to-cut-another-30-40-jobs-560905
School closings - https://www.thestar.com/yourtoronto/education/2017/05/04/121-ontario-schools-slated-to-close-report.html
http://www.cbc.ca/news/canada/thunder-bay/thunder-bay-ring-of-fire-1.4442435 - Ring of fire is moving very slowly, especially since the Liberals kept saying they would develop the Ring of Fire
Rate payers - http://www.cbc.ca/news/canada/toronto/ineligible-power-generator-costs-ontario-auditor-general-1.4435954
http://www.ourmidland.ca/news/police-service/yet-another-police-service-finds-no-savings-switching-opp-2017-05-18 - I bet the OPP gets raises in 2018 as way to support the Liberals
More money handout to companies - https://betakit.com/ontario-investing-up-to-5-million-in-think-research-to-create-228-jobs-in-toronto/
More shifting to government jobs from the private sector - http://www.cbc.ca/news/canada/ottawa/ontario-home-care-ccac-lhin-1.4082732
Government control of pot - http://www.cbc.ca/news/canada/toronto/province-cannabis-plan-1.4280484
I bet there will be more carrots dangles to voters for Wynne to buy more votes from the People of Ontario. Source -https://www.slideshare.net/paulyoungcga/issues-facing-ontario-2018-election
Summary
Ontario is less competitive in 2017 than it was when Liberals took power in 2003
Ontario has some highest hydro rates in North America
Carbon taxation does not reduce emissions, but does increase overall costs to consumers
Ontario continues to drag its feet when it comes to developing natural resources, like Chromite or Lithium or other areas
Ontario productivity has worsen due to fact many companies are starting to make investment in other jurisdiction
Ontario debt is highest of any sovereign place in the world
Systemic issues with real estate have not been addressed all levels of government as well as the private sector