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Here's how the Liberals, NDP and PCs want to spend your money

Can Kathleen Wynne, Andrea Horwath and Doug Ford afford the promises they are heaping on Ontarians?

by Vanmala Subramaniam
May 23 2018, 5:53pm

Canadian Press

When Ontarians got to the polls on June 7, they'll be choosing between an incumbent party that has overseen the sharpest rise in the cost of living in Ontario in four decades, and two other parties on opposite ends of the political spectrum — one promising greater equality, and the other guaranteeing short-term pocket book gains.

VICE News has broken down each party’s platform, to see where they stand on issues like healthcare, education, income taxes and electricity, but more importantly, whether they can afford their campaign promises, without saddling the province with a larger-than-life deficit for decades to come. The general rule is, incurring deficits are not necessarily bad if the government has a feasible long-term plan in place to get back into the black, and if that spending actually trickles down to taxpayers.

The Ontario Liberals

Just for context, the Ontario government, mostly under the governance of the Liberals, has run deficits since the early 2000s, but those deficits steadily decreased, up until 2017, when finally, Ontario charted a slight budget surplus. Although the Liberal government of Kathleen Wynne had pledged to continue running budget surpluses, the looming threat of a tough election year thrust the party back into deficit territory, as they rolled out a budget in March that committed billions on social programs and infrastructure.

Wynne’s party is using Budget 2018 as their party platform — it projects six consecutive deficits — $6.7 billion in Year 1 — and an eventual return to balance by the 2024-25 fiscal year. The big ticket spending items for the Liberals are public services like education, healthcare and transit.

For the 2018/2019 fiscal year alone, the government is allocating 18.3 percent of their budget, or $29.1 billion to the education sector, which includes hundreds of millions to improve the current school curriculum (including the contentious overhaul of the sex-education curriculum), and $3 billion over 10 years in grants to post-secondary institutions to upgrade their facilities and technology within classrooms. When it comes to student loans, unfortunately the Wynne government isn’t committing to anything, although since September 2017, students from families with a cumulative annual income of less than $50,000 were promised free tuition.

A good chunk of the Liberal spending platform is going to healthcare. From August 1, 2019, seniors will no longer have to pay for 4,400 prescriptions drugs, a program that is costing the Wynne government $575 million a year. This is in addition to the province’s OHIP+ pharmacare program which launched last year, and provides free prescription drugs to those under 24.

When it comes to public transit, the Liberal’s 2018 budget pledged a whopping $79 billion for multiple public transit projects that will materialize over the next 14 years. They include a high-speed train line from Toronto to Windsor, subsidized prices for GO train users and an LRT expansion in Ottawa.

And then you have electricity rates, an issue that might just cost Kathleen Wynne her entire government altogether come June 7. After hydro bills for the average Ontario resident started soaring post-privatization of Hydro One (an increase of over 150 percent for off-peak rates), the Wynne government figured out that something had to give. They've now pledged to cut hydro rates by 25 percent, through a policy tool called the Fair Hydro Plan, which critics say will actually end up seeing electricity bills temporarily go down, and then jump back up again in four years.

In terms of revenue, the Liberals have no real plan to cut income taxes or corporate taxes — in fact in an attempt to simplify the personal income tax system, which is one of their key campaign promises, the Liberals will end up getting $200 in additional taxes per year from 1.8 million Ontarians in certain upper middle class tax brackets, which will bring in $360 million in tax revenue.

The Liberals claim that all these spending policies will still enable them to reach a balanced budget in six years, but the Financial Accountability Office of Ontario begs to differ. The watchdog is forecasting that the Wynne government will actually see their deficit jump to $12 billion this year. In fact, in order to achieve a balanced budget by 2025, the financial agency says that the Wynne government would have to somehow find $15 billion in savings over the next six years — or an eight percent reduction in program spending.

Andrea Horwath and the NDP

The party platform predicts five consecutive annual budget deficits of between $2.9 billion and $5.9 billion. The bulk of this deficit comes from a big promise to invest in services like province-wide dental care and pharmacare, child care for families who earn less than $40,000 annually, a cut in electricity bills and the assurance that middle class Ontarians will not face additional tax hikes.

According to the NDP’s party platform, which is the most extensive and detailed out of all the parties, province-wide dental care will cost approximately $1.2 billion a year. The first stage of the plan will extend dental care to all seniors who don’t have retiree benefits, while the second stage of the plan would ensure dental benefits are provided to all workers.

A province-wide pharmacare plan, that aims to provide 125 essential drugs to every single Ontarian, regardless of insurance plan will cost $475 million a year, according to the NDP platform. The NDP plans to eventually expand this program to include all prescription drugs, which will no doubt cost a future NDP government tens of billions of dollars. But NDP leader Andrea Horwath argues that in fact out of the current total provincial expenditure of $136 billion, only an additional 0.35 percent will go to pharmacare.

In terms of the very contentious issue of electricity, Horwath’s party is pledging to overturn the privatization of Hydro One and cut hydro bills by 30 percent, in addition to putting an end to time-of-day pricing that charges consumers more during certain peak hours. The NDP claims that it will take four years to bring Hydro One back to public ownership, and that provincial revenue will increase by $1.6 billion over 10 years if electricity is a public asset. It is unclear however, how this entire process will result in an immediate reduction in hydro bills by 30 percent.

But there will be a substantial source of increased revenue for the province under an NDP government — taxes on the rich. The NDP is pledging to increase taxes by one percent for those who earn more than $220,000 and by two percent for those who earn more than $300,000. This will result in a tax revenue growth of $3.4 billion by the 2024/2025 fiscal years.

Doug Ford and the Ontario PC Party

Doug Ford is campaigning on the promise to put “more money in your pocket”, but there is scant evidence on how exactly his party plans to go about doing this. In April, Ford said that his government, if elected, would run a deficit in their first year, but eventually “return to black”, though no timetable as to when that will happen has been provided. What Ford has promised, however, is an independent audit into the Liberals’ spending, calling it one of the “largest financial scandals in Canadian history”.

There are three key platforms on the Ontario PC Party’s website: cutting the price of gas by 10 cents, saving the average Ontario family 12 percent on their hydro bills, and making sure “your tax dollars will be respected”.

Ford’s pledge to reduce gas prices is derived from a plan to scrap Ontario’s cap-and-trade program and reduce the provincial fuel tax, which is currently at 14.7 cents per litre. The latter cut would actually result in a $1 billion loss of annual provincial revenue, while getting rid of the cap-and-trade program will cost the province $1.9 billion in revenue from businesses that are incentivized to reduce greenhouse gas emissions.

He has also promised an income tax cut for those who make more than $46,000 annually, which is projected to cost $2.3 billion, as well as a reduction in corporate taxes from 11.5 percent to 10.5 percent which will cost the province $1.3 billion.

The PC Party’s 12 percent cut to hydro bills will result in an $800 million loss in revenue, but in fact, it’s the least invasive hydro plan considering the NDP’s pledge to reduce electricity bills by 30 percent and the Wynne government’s promise to reduce rates by 25 percent.

In fact, one can conclude that Ford’s platform is so heavily focused on cutting government spending and reducing taxes, that there really is no clear path ahead to ever balance Ontario’s budget.

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