Liberals' Anti-Social Budget

- Dan Cerri -

May 15, 2014 - Finance Minister Charles Sousa tabled the budget on May 1. In much the same manner that PC Leader Tim Hudak is using the election to advance his party's version of austerity to represent the program of the rich, the budget is being described as the Liberals' plan and as Wynne's "campaign promises." A debate immediately broke out about whether it is a "progressive" budget because it contains some "positive" measures, but this is diversionary. Wynne and the Liberals will not abandon austerity and its corollary, privatization, and the budget makes this clear.

When he tabled the budget, Sousa referred to the government's continued implementation of the recommendations of the Commission on the Reform of Ontario's Public Services (also known as the Drummond Report). The Commission was established in 2011 by the McGuinty government and it formed the framework of the austerity budget delivered by then-Finance Minister Dwight Duncan. Under the pretext of making public services "more affordable and effective" and eliminating the deficit, all sorts of anti-social and anti-worker attacks were unleashed, including more cuts to public sector jobs and public services, especially in education and health care, concessionary compensation parameters for public employees, and new "partnerships" with private, for-profit companies. At the time, Ontario Political Forum pointed out that these were methods to privatize public assets and to justify driving down the wages and working conditions of all workers in the name of "equity."

Sousa boasted in his speech on the budget that more than 80 per cent of Drummond's recommendations are now being acted on by the Liberals, up from 60 per cent in the 2013 Budget. He said: "These actions are enabling sustainable transformation and supporting successful expenditure management. The government is continuing to implement the Commission's recommendations as part of its commitment to deliver the most effective and efficient public services."

More Austerity for Working People

This year's budget continues in the direction of the Commission's recommendations, particularly when it comes to imposing more austerity. Sousa made it clear that public services would continue to be the focal point of austerity measures over the next several years. He said: "We will continue to review expenses through a special Treasury Board subcommittee. We are introducing a new annual program review savings target of $250 million for 2014-15 and $500 million for each of the next two years. This target will focus on maintaining or enhancing the delivery of public services while reducing costs that are not essential to delivering services." The direct experience of public sector workers is that this means more attacks on their wages and working conditions.

Sousa referred specifically to how the government will impose austerity in health care by continuing to move from a guaranteed funding formula to a performance-based one. He said: "Ontario is entering the third year of a major reform of how it funds the health care sector: moving from a provider-centred global funding approach to a more person-centred, activity-based approach for hospitals, long-term care homes and Community Care Access Centres." The Liberal government has used a similar approach in its attempts to legitimize austerity that has forced public programs and services to close or be taken over by private providers.

Sousa went on to say: "Under the reform, hospital budgets will be aligned so that 30 per cent of their funding is based on the types and volume of services and treatments they deliver, at a price that reflects evidence-based best practices after factoring in the complexity of patients and procedures. Hospitals have an incentive to pay attention to how services are provided, at what cost, and to find efficiencies and improve quality, in order to be able to deliver procedures at the best-practice price."  It will be hospital workers who will bear the brunt of the continued attack on health care through increased workloads, longer hours and related issues such as physical and mental stress.

Sousa also referred to controlling compensation in the public sector, referring specifically to senior executives; but this is meant to justify demanding that all public sector workers accept retrogression in their wages and benefits. He said: "Proposed legislation would allow us to establish compensation frameworks, including the use of sector-specific hard caps. We have also introduced legislation to continue the salary freeze of Members of Provincial Parliament. This began in 2009 and would not end until the budget is balanced. We are also continuing to manage compensation and we will work with our partners to ensure that all costs are addressed within Ontario's existing fiscal framework. We are continuing to make agencies more accountable to further ensure that costs are controlled across government."

More Privatization to Pay the Rich

The budget also proposes more ways to "transform" the delivery of public services by turning them over to private interests in the name of "efficiencies." According to Sousa, "Ontario will continue to implement and, in some cases, accelerate transformational initiatives that have generated increased efficiency and effectiveness. The government will maintain momentum as it moves forward to transform public services by changing the way programs and services are delivered, to ensure results and better value for money." This is code for more public-private partnerships (P3s) to deliver government programs. Increasing the number of P3s is something former Finance Minister Dwight Duncan made clear as Co-Chair of an Ontario Chamber of Commerce-KPMG-Maximus Canada advisory panel that recently released a report titled "Unlocking the Public Service Economy in Ontario: A New Approach to Public-Private Partnership in Services." Referring to what he called a "staggering" debt load and the need to look for lower cost ways to deliver services, Duncan said regardless of who forms the government, they would be compelled to look at these types of things in the not too distant future.

The budget proposes ways to form more P3s including through Alternative Financing and Procurement (AFP), which the government describes as a made-in-Ontario P3 model to deliver infrastructure projects. The budget also follows up on the government's previous announcement of "unlocking value from government assets," including by selling Ontario's shares in General Motors, certain government-owned real estate holdings and possibly also Crown corporations such as Ontario Power Generation, Hydro One and the Liquor Control Board of Ontario. Referring to the latter, Sousa said: "That doesn't necessarily mean we will sell them. Unlocking the full value of these assets will include improving efficiency and enhancing their performance." Sousa also said the government would review other ways to maximize efficiencies of public assets. He referred to using "expert panels" for this, including one already established to review public assets, led by the retiring President and CEO of TD Bank Group, Ed Clark.

The budget gives a clear indication of the direction the Liberals are proposing for Ontario which is much the same as the one followed in McGuinty and Duncan's days. It is more austerity for the working people at the same time as the Liberals show a willingness to spend on projects linked with private interests to deliver public services.

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