Tim Hudak says he’ll reduce the million-plus broader public sector by 100,000 jobs using attrition over 4 years and outsourcing—though, I suppose, they’ll inevitably be some layoffs. This, Kathleen Wynne says, will will drive Ontario back into recession.
But why? Tens of thousands of public sector workers retire each year. Some of these retirees will not be replaced, but much of their spending/consumption will continue to benefit the economy because they’ll be receiving some pretty hefty pensions.
Furthermore, some of those jobs lost through outsourcing will be replaced in the private sector, and so too will their spending/consumption. And remember, this jobs reduction program will only roll the public sector back to 2009 employment levels.
Let’s face it, public sector jobs need to be cut.
Even Ontario Public Service Employees Union president Warren (Smokey) Thomas has complained that 60,000 management jobs in the public sector could be eliminated. Now that’s just management jobs. What’s the chance that only management jobs are redundant?
Moreover, there’s the simple fact that we need to eliminate the deficit, before the credit agencies downgrade the province’s bonds. Such a downgrade will add hundreds of millions to the $11-billion or so we’re already paying to service our debt.
Remember that Moody’s Investors Service issued a warning in May that we had better get our act in gear before our credit rating faces downgrading pressure. Moody’s noted Ontario’s net debt as a percentage of revenue is 237.7 in the 2014-15 fiscal year, the highest in Canada. (Note: Ontario’s credit rating was downgraded in 2012 by Moody’s Investors Service.)
Our deficit-debt situation may not be a crisis, but it looks certain to become very much more expensive if we do not address it soon. Debt servicing charges (interest) are already the third largest item in the Ontario budget.
A spineless Liberal government and greedy public sector unions are the ones more likely to drive Ontario back into recession.
Furthermore, Wynne is such a hypocrite on the subject of the deficit, for her own budget shows this year’s $3-billion spending increase will be followed by the deepest freeze in two decades. Taking population growth into consideration, a 2017 Liberal government would be cutting spending on a per-person basis by Mike Harris-like levels.
Mike Harris had to address the province’s record high deficits after a disastrous term of NDP government and the cuts in transfer payments from the Chrétien-Martin government in Ottawa. This time around it’s the Liberals who have inflicted the damage on Ontario’s fiscal health.
Some unions have recognized the Liberal government’s dilemma. They fear the Grits will eventually come after them.
Linda Haslam-Stroud, president of the 60,000-member Nurses’ union, reportedly said in May, “The government that’s going to be in play is going to have to take a long hard look at how much they believe they can continue to squeeze out of the hospitals.” Haslam-Stroud also noted, “The nurses of Ontario already took a two-year wage freeze, I believe we have done our duty.”
James Ryan, head of the Ontario English Catholic Teachers Association, has also made noises that sound a lot like, we won’t accept a freeze.
I won’t bet on any goodwill from the unions. Think back to how they savaged their own political party during Bob Rae’s term. It took years for the former NDP premier’s political career to get back on track—in a different party. Kathleen Wynne’s nuts if she thinks she’ll fare any better, unless, of course, she continues to knuckle under to the unions.
So what will she cut? Have we no right to know?