The following guest post was written by Chris Watson, legislative liaison for CUPE Ontario based in Toronto:
In stark contrast to the austerity budget strategy of Don Drummond, Dalton McGuinty and Dwight Duncan, a plan premised on Drummond’s core belief that strong economic growth in Ontario is not possible and should not be the goal of Ontario budget policy, the new Premier has publicly committed to “make Ontario # 1 for economic growth” in Canada.
That is a great start and exactly what so many Ontarians, including both labour and many business leaders, have waited to hear.
The challenge, however, is will the government understand that achieving that bold growth goal requires a strategic shift away from the now discredited “austerity” agenda of the previous administration?
Further evidence that we might dare hope for a new direction came in remarks by the (now) Finance Minister of Ontario, Charles Sousa, in his January 26th speech to the Liberal Leadership Convention.
“What did I learn from twenty five years in business?” Sousa asked the crowd. “If you can’t buy – I can’t sell.”
Point? Our economic health is largely dependent upon consumer demand, but if we continue to use government policy to drive down Ontarian’s real earnings, they will have no choice but to either reduce spending (which will only damage the economy and government revenues even further) , or they will try and maintain spending levels by driving up their personal and household debt even higher than it is now. If policy makers allow that to continue, we will hit a catastrophe point. Is it worth the risk? RBC’s Gordon Nixon told the Ontario Economic Summitt last November: Stop being afraid of high wages.
Is anyone listening?
- Great Divergence or Financialized recovery ? (April 22nd, 2013)
- Austerity through infrastructure Cuts: Budget 2013 (March 22nd, 2013)
- Stay the course (November 15th, 2012)
- The Austerity Trap (October 25th, 2012)