Ontario Government's Pay-the-Rich Schemes
Why Not Declare a Moratorium on Debt-Servicing Payments and Increase Investments in Social Programs
In a backgrounder seeking to justify its proposed new Protecting a Sustainable
Public Sector for Future Generations
Act, 2019, the Ford
government admits forecasting $13.3 billion
in
interest payments to the financial institutions holding Ontario's
debt for fiscal year 2019-20 alone. The backgrounder says this
amounts to "$1.5 million of interest paid every hour of every
day."
The government makes clear that those who hold Ontario's
debt
are the priority and must receive their pound of flesh before "a
single dollar can be spent on schools, hospitals or
transportation." Making the big financial institutions a priority
is presented as "making Ontario fiscally sustainable" and a
justification for the anti-social offensive and attack on
workers' rights. In fact it reveals that the rights and claims of
Ontarians are subject to how much is left over after paying
interest on the debt and other claims of the financial oligarchy.
This is a form of the neo-liberal trickle down theory that
demands the aim and direction of the socialized economy be to pay
the rich and not meet the claims of the people and society.
The backgrounder ignores how the provincial debt came
into
being and for what reasons, why the government borrowed money
from private moneylenders in the first place when it has its own
financial means, and how much of the private debt has already
been repaid over and over again through the magic of compound
interest.
 If the backgrounder were
really meant as a source of
information and not disinformation it would itemize how much of
the borrowed money from private financial institutions went
straight back to them in pay-the-rich handouts, bailouts,
subsidies, loan guarantees, tax cuts and other schemes -- usually
called incentives to invest, and how much of the initial debt has
already been repaid in full. The pay-the-rich direction for the
economy with its trickle down nonsense is not sustainable and
needs a new direction to meet the claims of the people and
society.
An example of how these odious public debts are racked
up in order to pay the rich is the recent write-off of $3 billion
dollars by the federal and Ontario governments to auto monopoly Fiat
Chrysler. The Ontario government wrote off its share, a $445 million
loan, saying it had "no legal recourse" to collect it while the federal
government wrote off their $2.6 billion share prior to this in March,
also claiming that it could not be collected. The loans were issued by
the governments of Canada and Ontario in 2009 as part of getting
autoworkers to accept massive concessions.
Chrysler was subsequently given to Fiat without Fiat paying a cent and
all its main debts covered by government bailouts to a spun-off "old
Chrysler." A spokeswoman for Ontario Finance Minister Rod Phillips told
Postmedia that “because of the way government financing works, we can’t
pursue, and the Feds either can’t really pursue, something that doesn’t
exist anymore [...] and because it was a joint-structured funding
bailout [...], once the feds made the decision they were writing it
off, the province also cannot recover the funding.”
Sustainability for the Ford PC government means, in
practice,
that money must be taken from social programs and public
services, and from the workers who provide them, to sustain debt
servicing payments to the biggest financial interests and to
provide pay-the-rich incentives for those same private interests
to invest.
Not surprisingly, political representatives of the
financial
oligarchy are the very ones in government bleating about cutting
social programs and public services, the necessity to violate the
rights of public sector workers, and above all else "sustain" the
current pay-the-rich direction for the economy. They are placed
in positions of authority to decide government policy either as
Ministers of Finance or government-appointed consultants.
To give a few examples, former Liberal Finance Minister
Charles Sousa worked at Royal Bank of Canada (RBC) Financial
Group for more than 20 years, primarily as Director of Commercial
Banking and Director of Marketing at RBC Dominion Securities. Don
Drummond, appointed by the McGuinty Liberal government to advise
how to restructure public services to ensure payments on the debt
and deficit were sustained, was Senior Vice President and Chief
Economist for the TD Bank from 2000 to 2010. Much of the
direction he set out in his Commission for the Reform of Public
Services is what is now being taken up by the Ford government,
especially as concerns the restructuring of wages and benefits
throughout the public service and increasing class sizes in
education.
The more the Ford PC government presents its anti-social
measures as aimed at saving the province from financial ruin, the
more it exposes itself as unfit to govern and incapable of
finding or even thinking about any alternative to the
unsustainable pay-the-rich direction of the economy. Taking into
account all the facts makes a pro-social alternative to the
government's "solution" and priorities apparent. Why not declare a
moratorium on debt-servicing payments and increase investments in
social programs instead of cutting them?
This article was published in
Volume 49 Number 25 - August 31, 2019
Article Link:
Ontario Government's Pay-the-Rich Schemes: Why Not Declare a Moratorium on Debt-Servicing Payments and Increase Investments in Social Programs
Website: www.cpcml.ca
Email: editor@cpcml.ca
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