Agenda for Growth – Balanced Budgets

November 21, 2012

Ontario can lead Canada in job creation again, but first we need to make tough decisions to balance the provincial budget and start paying down the debt.

Most people would agree that Ontario needs to balance its books. Each year the government delays balancing the budget, it adds billions of dollars to the debt – which now stands at a staggering $260 billion due to the Liberals’ incompetence with managing the province’s finances, up from $109 billion in 2003.

The question is: how quickly do we return to balanced budgets?

The PCs’ Paths to Prosperity white paper An Agenda for Growth proposes balancing the budget sooner than the current government’s plan.

The Liberals want to wait until 2017 – three years later than any other province. And the fact is: the current government has no plan to balance the budget.

The McGuinty government has increased spending from $71.6B when they took over in 2003, up to $127B in this year’s budget, a 77% increase.  Last year, the current government spent $13 billion more than it raised in revenue. That represents double the deficits of every other province in Canada combined.

The debt poses a huge risk to Ontario’s economy because businesses know that when governments are heavily in debt, taxes go up and necessary spending on infrastructure, such as bridges and transit, is put off. This threat of higher taxes and reduced services deters businesses from investing in Ontario.

Right now, 600,000 Ontarians are in search of work. Just last month, Ontario lost 40,000 private sector jobs while the public sector became even more bloated with 30,000 new jobs.

Balanced budgets, on the other hand, encourage businesses to invest in Ontario and in our region in particular due to its strategically important location. This spurs economic growth and job creation, which in turn creates more tax dollars and leads to more balanced budgets. Economists call this the “Virtuous Circle of Growth.”

The Ontario PCs believe that Ontarians know how to live within their means and build for the future. Government shouldn’t be any different. A household that was spending more than it was taking in would cut spending. Government must apply that common sense to its own budget.

Why spread tough decisions over five years when you can make them in a shorter period of time and stop living on borrowed money sooner? This aggressive approach has been tried before in Canada and has worked.

By putting Ontario on the path toward balanced budgets, we will rebuild our economy for the twenty-first century and protect the health care and social benefits that we deserve.

Balanced budgets are the first proposal in the PCs’ Paths to Prosperity: An Agenda for Growth discussion paper. To read it, visit: www.ontariopc.com.