CCPA Comparison of 3 Ontario Election Platforms

Hugh Mackenzie of the CCPA has prepared a comprehensive comparison of the election platforms of the three major parties in Ontario’s election. It reveals an enormous fiscal “hole” in the Conservative platform, that will inevitably result in dramatic reductions in public spending if that party wins the October 6 election.

The report, released yesterday, added up the value of the campaign promises (for tax cuts and new spending programs) made by the three parties, and compared those to their corresponding plans to pay for those promises.

It found that the Conservative platform is by far the most aggressive of the three parties, featuring promises that would cost $4.4 billion per year by 2015-16.  That’s almost as much as the value of the promises in the Liberal and NDP platforms put together.  Nearly 80% of the cost of the Conservative platform goes to tax cuts.

Most dangerous, the Conservatives rely almost exclusively on spending cuts to pay for their promises, yet they have not explained where most of those cuts will come from.  Mackenzie’s calculations show that unspecified additional spending cuts worth $4.1 billion in 2015-16 (and a cumulative $10 billion over the next four years) will be required to make the Conservative plan “add up.”

Mackenzie concludes, “There’s a $10 billion hole in his budget that can only be filled by public service cuts that [Mr. Hudak] isn’t prepared to tell you about right now.”

The Liberal and NDP platforms are less expensive than the Conservatives’ ($1.8 billion and $2.9 billion per year by 2015-16, respectively), contain a mixture of tax cuts and new spending, and are paid for by varying combinations of offsetting spending cuts, revenue measures (like the NDP’s corporate tax proposal), and more optimistic economic assumptions.

Another interesting (and sobering) finding in the report: the fiscal platforms of all three parties are based around the same fiscal forecast that was contained in the 2011-12 Ontario budget.  That forecast, in turn, is based on a rather austere outlook for base-case program spending — growing by less than 2% per year (and hence falling in real per capita terms).  They all balance the budget in 2017-18 (which strikes me as a reasonable timetable).  But they are all counting on significant restraint in spending to do it — even before considering the impact of their incremental election promises.  That means that whoever wins the election, Ontarians will have to be “on guard” against the temptation for the next government to squeeze spending hard.  That risk, obviously, is enormously amplified if Hudak’s Conservatives win next week, since their $10 billion in cuts is on top of the already-austere spending baseline that implies falling program delivery in its own right.

On the bright side, it seems that all the forecasts still have some “wiggle room” built into them, in the grand tradition of “strategic budgeting” pioneered by Paul Martin in the 1990s.  Debt service costs are clearly overestimated; revenues may be underestimated; and various “prudence” cushions give a little more breathing room.  However, the pressures of electoralism seem to be leading all the parties to downplay the importance, and the difficulty, of preserving the fiscal base for our existing public programs through the coming challenging years.  Those who support public programs had better be polishing up their marching boots, no matter who wins next week.

4 comments

  • “The Liberal and NDP platforms . . . are paid for by varying combinations of offsetting spending cuts, revenue measures (like the NDP’s corporate tax proposal), and more optimistic economic assumptions.”

    While the offsetting spending reductions are a point of similarity, the two platforms should not be conflated.

    The Liberals (like the Conservatives) bank on extra revenue from more optimistic economic assumptions.

    Only the NDP actually raises revenue by reversing Liberal corporate tax cuts.

    It is an issue not of “varying combinations,” but of two different fiscal directions.

  • Hey Erin, to be fair, the NDP platform counts on $175 million per year from lower interest costs than planned in the 2011-12 budget, and $695 million per year in lower baseline spending than planned in the 2011-12 budget. Those defintely qualify as “more optimistic economic assumptions” — not in the form of directly assuming higher GDP (as the Libs and Tories modestly do), but nevertheless assuming that the baseline will be better than the 2011-12 budget projected, before any campaign promises are factored in. That’s also before adding the effect of the incremental spending reductions proposed in the NDP platform (consultants, CEO salaries, etc.). Of the money raised in the platform from the CIT rate measure and the input tax measure, most (over three-quarters) is given back in offsetting tax cuts, so the net impact on provincial revenue is small: $0.5 b in the 4th year, according to Hugh’s Table 3. That’s a revenue increase of under 0.4 percent on the $129 b base, so the difference in “fiscal direction” (while positive, and I’m all in favour of raising the CIT) is not dramatic.

  • As noted, I agree that the expenditure reductions are a point of similarity. However, you had (correctly) listed them as an item separate from “more optimistic economic assumptions.”

    Lower interest costs reflect the fact that the province has borrowed less, and done so at lower interest rates, than projected in Budget 2011. This item is a fiscal reality, not an economic assumption.

    Unlike the Liberals and Conservatives, the NDP’s economic assumptions are no more optimistic than Budget 2011.

  • My reading of Hugh’s Table 3 is that the NDP platform would increase revenues by $0.7 billion in the fourth year. By contrast, the Liberal and Conservative platforms would both decrease revenues.

    Those are two different fiscal directions. However, I agree that all platforms are fairly small compared to the overall provincial budget.

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