Ontario deficit to last into 2017 [welfare costs]
Premier Dalton McGuinty’s Liberals will have to win two more elections – in 2011 and 2015 — before Ontario’s record deficit is eliminated under a plan to be unveiled in the March 25 budget.
Sources told the Star that while Finance Minister Dwight Duncan is “not going to spend as if there’s no deficit,” nor will he recklessly slash programs next week.
Despite being saddled with a $24.7 billion deficit for 2009-10, Duncan will announce hundreds of millions of dollars in new funding for 20,000 spaces in colleges, universities, and apprenticeship programs as of September.
McGuinty, who had originally hoped to get the province back in the black in five years, has said it’s more important Ontarians can hit the books than it is for Queen’s Park to balance the books.
To that end, the Liberals, leery of cutting too soon and undermining Ontario’s gingerly recovery from the recession, will outline a “responsible and credible” plan to reduce the budget shortfall over the next seven years or so.
This gradual paying down of the deficit means McGuinty, first elected in 2003 and re-elected in 2007, would have to sail through the 2011 and 2015 provincial elections on a sea of red ink.
A balanced budget might not be tabled until 2017-18 – in time for 2019 election.
Senior Ontario Liberals have privately questioned the overly ambitious deficit-reduction targets of both Prime Minister Stephen Harper and British Columbia Premier Gordon Campbell as “impractical” and “unachievable” without major cuts in jobs and services.
Ottawa has pledged to virtually eliminate the $54 billion federal deficit by 2014 while B.C., which earlier this month projected a $1.7 billion deficit for the next fiscal year, promised its shortfall would be gone by 2013.
“We simply don’t see that as realistic,” a senior Ontario official said.
Duncan’s budget next week is also expected to close a loophole and curb abuse of a social assistance program that has ballooned to $200 million a year.
About one in five people on welfare – some 162,000 Ontarians – receive the monthly extra payments of up to $250.
That has led to the program growing to $200 million from $6 million a year in 2003, which the government argues is not sustainable.
In his annual report last December, Auditor General Jim McCarten warned the allowance was being misused.
At the same time, an Ontario Human Rights Commission ruling last month found the program, which helps people coping with more than 40 different medical conditions, such as diabetes, discriminates against those with certain health issues.
Community and Social Services Minister Madeleine Meilleur confirmed earlier this month that the government was looking at the program.
“We have just received … a decision from the Ontario Human Rights Tribunal with regard to the special diets. We are reviewing this decision,” Meilleur said March 1.
“It’s a complex decision that could have a significant fiscal, policy and regulatory impact,” she said, stressing “fighting poverty is a priority for this government.”
“We have received good advice from the auditor general. We’ve received good advice about a special diet. We put forward a team to review it.”
The government, which has increased social assistance payments by 11 per cent since taking office in 2003, hopes to end the abuse without unfairly penalizing people who legitimately need help.
Duncan, who was unavailable for comment Tuesday, is expected to unveil changes to Ontario’s welfare payouts that currently range from $585 a month for an able-bodied person to $1,040 a month for a disabled recipient.
“We have to do something to ensure the system is fair for everyone,” a senior Liberal official said, noting right-wing critics of welfare often cite the allowance program as a reason for cutting benefits for the most vulnerable Ontarians.
The harmonized sales tax, announced in Duncan’s 2009 budget, takes effect on July 1, but the Liberals received a reminder Tuesday of the political headache that awaits when the 8 per cent provincial sales tax and the 5 per cent federal GST are blended.
NDP Leader Andrea Horwath brought parents of autistic children to Queen’s Park to highlight that the 5 per cent GST paid on intensive therapy for their kids will jump to a 13 per cent HST this summer.
Mother Laura Kirby-McIntosh, who in the past has paid $30,000 a year for treatment for her 10-year-old son, Clifford, said parents already have enough on their plate.
“When the government slaps us in the face like that, it’s unconscionable,” said Kirby-McIntosh.
Children and Youth Services Minister Laurel Broten, who noted the Liberals have increased funding for autism treatment to $165 million last year from $44 million in 2003, said the tax changes are Ottawa’s fault.
“Obviously, I wish the federal government didn’t apply the GST to these services but that’s up to them,” said Broten.
Only parents who pay for their own kids’ treatment would be affected. The 1,300 families receiving IBI therapy subsidized by the province are not taxed on it.
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