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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