Has Wynne The Guts To Cut Spending?



Premiers Kathleen Wynne and Dalton McGuinty gambled with Ontario’s debt and maybe, just maybe, they have won.

The Bulldog’s defence of government spending in bad times has not been popular on this website. That’s understandable given the fact that the province’s debt has risen to $298.9 billion making the province the most indebted sub-national government in the world.

We’re No. 1.

But recent economic reports show that Ontario’s growth is running at three per cent a year. That’s the highest in North America.

Now some of that can be traced to the interrelated conditions of cheaper oil driving down the Canadian dollar making manufacturing exports less expensive. Also Ontario’s biggest export market, the United States, is beginning to recover after a decade in the doldrums.

But then government spending helped, too. Some of that spending resulted in saving the Ontario economy during the critical Great Recession of 2007 and 2009. Canada and the world were close to catastrophe. It was much nearer than most people think. And Ontario is much closer to becoming a rust-belt economy than most are ready to admit.

So the three-per-cent growth is welcome, though very frightening for conservatives given how it was created.

It’s hard to tell how much Ontario government spending has contributed to this province’s economic turnaround … if that turnaround is real and long-lasting. But it certainly has had an effect.

Spending to that extent, and certainly McGuinty was not comfortable with it, was a brave thing to do. But it has resulted in economic growth, help with education, support for business and better hospitals than during the Mike Harris years.

So now Wynne must decide if the spending must continue to hold this expansion in place and how long it must run.

If happy days are really here again, Wynne and McGuinty have shown great bravery in spending in the face of overwhelming criticism. The easy thing would have been to cut back and retard the economy. That would have lowered the level of opposition.

But they didn’t and as of now, the economy is beginning to recover for a number of reasons including government spending.

It took guts to spend in bad times but it was the right thing to do. Now Wynne will soon need to show guts to reduce government spending in good times if they have arrived. Let the private sector carry the economy after the government has primed the pump.

If the economy has turned around … and that’s not a sure thing … Wynne must begin the process of reducing government debt.

It’s a big job, too, and will take much political bravery. But that’s what leadership is all about.

Is Wynne up to the task?


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13 thoughts on “Has Wynne The Guts To Cut Spending?

  1. Stimulus spending , negative interest rates, Brexit, the Donald, part time employment up, full-time employment down, massive wealth accumulation at the top, service sector jobs increase as manufacturing jobs flee to unregulated jurisdictions with low wages, governments defaulting on debt or are about to default and this list just scratches the surface of economic woes.

    What we are experiencing is commerce that creates wealth but not jobs. The government patches that are being applied helter-skelter all over the world, have managed to mask the problem but not the cure.

    Individual jurisdictions may be able to continue to prolong the downfall but this recession has been ongoing for a decade and it is not over yet.

    Ontario had no choice. Anyone at the helm would have been forced to do what Ontario has done. We sold part of our most valuable public trust (hydro) and we will be forced to continue to sell more. Our tiny population’s economy isn’t even a decimal point on the global balance sheet and we’re merely small players in a rigged game. In that regard I give no credit the player who is holding the dice and it’s their turn to roll.

    It is not over yet.


    1. Ken,
      I would like to add that I am not an end of the world predictor. I only see the end of the status quo.
      I truly believe that the economic/social injustices can be fixed and not just bandaged.
      It will however take global leadership and some outside-the-box solutions.

      1. Chaz,

        What do you mean by “outside-the-box” solutions? Are you talking about an economic system like Social Credit?

        1. Sheridan:

          We have to head away from a system that gives out money for labour. As technology proceeds there will be fewer and fewer jobs. We are only seeing the beginning of a computerized world. We either let people live without or we figure out a way to inhumanely distribute resources.

          Allowing the disenfranchisement that comes from being unable to have basic needs met and then further allowing the inability for people to go forward with improving one’s standard of living beyond mere survival is not going to fly.

          Social credit, guaranteed income, Marxism (not the bastardized forms tried by various Communist governments to date). Call it any name and combine any elements but things need to change.

          Henry Ford said: “It is well enough that people of the nation do not understand our banking and money system, for if they did, I believe there would be a revolution before tomorrow morning.”

          1. Chaz:

            Funny … four years ago when I started The Bulldog, I thought I had pioneered the “living without” model.



                1. Ken:

                  You are going to love the income distribution model that kicks in at age 65. Post CPP and OAS. Makes getting up to work a joy. I want more.


  2. How do you suggest that Premier Kathleen Wynne cut the provincial debt?

    We know that her government is committed to spending $50-billion on transit by 2021 (part of a 12-year $160-billion infrastructure program). And the Opposition critics have pointed to the sale of Hydro One and raiding of various reserves to potentially eliminate the deficit by 2018 as a short-term and shallow election ploy. But what next: the sale of the LCBO? Does the cutting only start after all of our assets have been sold? (n.b. This does not even take into consideration how poorly provincial assets have been managed, i.e. the scandals regarding the Ontario Green Energy projects, Ornge, etc.)

    What exactly are these debt-reducing initiatives that Wynne might undertake?

    1. Sheridan:

      Public service employee and structural review. The big money is to be had in salaries.

      Hopefully attrition can deal with the employee review.

      It would be controversial and would take leadership.



      1. Ken,

        You mean like the leadership that Wynne displayed giving the executives of the 2015 Pan-Am Games their millions in performance bonuses, even though the Ontario Auditor General claimed that these games went over budget by $342-million.

        And we saw last election how Wynne pandered to the civil service/unions and crucified Tim Hudak for suggesting any reduction to the Ontario bureaucracy.

        Can a leopard change its spots?

  3. Wynne doesn’t have to cut. She is dreaming up schemes to get more revenue. She tried with the Ontario Pension Plan (province receives revenues and doesn’t have to pay out for many years) and now will be putting in a carbon tax plus HST on the carbon tax. Ontario citizens seem to go along with this and she seems happy to keep on shearing the sheep.


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