The real story of the former McGuinty era

Charlie Gillis on Premier Dad’s financials

by Charlie GIllis

CP/Chris Young

Dalton McGuinty resigned his legislative seat today, and appraisals of the former Ontario premier’s legacy have begun. Attention has naturally fallen on the power-plants saga and the mass deletion of emails by staff in the Premier’s Office that followed (the latter, apparently, being a ham-fisted attempt to cleanse the historical record of the former).

But the real story of the former McGuinty era lies in the financials, and it’s not happy reading. A cursory look at Ontario’s fiscal position suggests the Liberals have left a burden that, in the future, will limit the province’s ability to help those in the greatest need.

It’s a curious outcome for a leader whose political brand boiled down decency, duty and responsibility—the boy scout who grew up to be Premier Dad. And yes, a lot of subjective values feed into the essential “legacy” question, namely, whether a leader left the place in better shape than he found it. But at least one tangible measure of leadership—money—won’t flatter McGuinty. Here’s why:

DEBT

Even by the standards of bond-happy Canadian provinces, Ontario has dug itself a scary-deep hole. Between 2003-04, McGuinty’s first year in office, and 2011-12, the province’s net debt rose more than 70 per cent and now stands at nearly a quarter of a trillion dollars. That’s about $18,000 for every man, woman and child—which is second only to Quebec’s per-capita debt and not by much. According to Statistics Canada projections, Ontario’s net debt will hit 40 per cent of provincial GDP some time next year.

DEFICIT

Ontario’s bills wouldn’t be so daunting, were it anywhere close to being able to pay them down. Instead, the province faces a $12-billion shortfall in 2013 even after extensive cost-cutting. That is, by coincidence, roughly what taxpayers will shell out in interest on provincial debt in the next fiscal year—a cost that will go up because the province keeps adding to its liabilities.

The price will rise even more sharply if bond-rating agencies further downgrade Ontario’s debt.

TIN HANDCUFFS

What this means to average people: Ontario can no longer help. It can’t help the needy with augmented programs. It can’t help the sick by paying for new drugs. It can’t give its employees a cost-of-living raise. At about $8,400 per person, program spending is already lowest among provinces (though the method of calculation here can vary; some place Quebec at the bottom) and has been for the last three years. The perennial “have” province is now a have-not, and may soon need the help of its western counterparts to maintain existing levels of service.

HE ACTED TOO LATE

This seems an opportune moment to pause and consider the words of Don Drummond, the former bank economist McGuinty commissioned to draw a roadmap out of this fiscal tar pit.

Debt is costly, since interest must be paid on the province’s outstanding bonds and other obligations. Unusually low interest rates in recent years have allowed Ontario to borrow cheaply, but as interest rates rise to more normal levels, so will the cost of servicing the growing debt, and that will divert dollars away from public programs.

If McGuinty had heeded this sort of advice just a few years earlier (there were plenty of smart people offering it) he could have saved at least some of the pain Ontarians now face. Alas, he waited until 2011 to reach out to Drummond, and even then shied from the economist’s tougher recommendations.

DAYS OF WINE AND ROSES

How we got here is no mystery. Program spending under McGuinty climbed by an average of 7.6 per cent annually before the financial meltdown of ’08-09. During that period, Liberals got in the habit of saying they were backfilling a program deficit wrought by the program-slashing government of Mike Harris—costs downloaded to municipalities and a strained health-care system.

It was only partly true: billions also went out in the form of wage increases and benefits to teachers and other unionized public-sector employees. Then, after the U.S. economy deflated, and Ontario’s swooned, the province had to go cap in hand to the unions to get the money back.

Needless to say, it didn’t work and the province eventually traded its cap for a legislative hammer.

BANG FOR THE BUCK? OR A WHIMPER?

Here’s where we get to the subjective part: will Ontarians see evidence of all that spending when they look around their communities?

They’ll see full-day kindergarten, which costs $1.5 billion per year and may or may not yield the dividends promised. But they’ll also see flaking bridges, pocked streets and crumbling expressways.

They’ll see a Greenbelt protecting the lands around Toronto from sprawl. But they’ll also see a courthouses so crowded accused criminals walk free because they cannot be tried in time.

They’ll see pension liabilities; the burden of an aging population; or boondoggles like eHealth, the air ambulance system and, yes, those dastardly power plants.

We can debate all day about how a government should spend its money, but if it hasn’t got any, the whole discussion is moot. And if Dalton McGuinty isn’t exclusively responsible for landing us here, he bears at least part of the blame.




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The real story of the former McGuinty era

  1. Ontario really needs recall legislation to toss mpps from office. When McGuinty said he wouldn’t raise taxes when elected, only to turnaround and raise them almost $900 per person, he and his party should have felt the wrath of the voters immediately. Instead, with current law and human nature, citizens forget after a few years and the last year the government uses your overtaxed, hard-earned tax dollar to buy off the largest and most important supporters for re-election (in McGuinty’s case, that was the green lobby and the unions).
    Recall must come to Ontario to create more accountability.

    • I agree completely.

      We should also allow the legislature to ability to have non-confidence motions against the party in power if it feels that it must be thrown out. From what I understood, the only way opposition parties can do that now is to vote against the government on Throne Speeches and money bills (e.g. budget). So we won’t have an opportunity to turf out the Liberals for another year.

  2. We now have one of the finest education systems in the world. And therein lies our future.

    • Kind of mystifying that an evaluation of the McGuinty years would completely ignore the transformation of Ontario’s education system. That is no small accomplishment.

      • I saw several years ago that McGuinty had read ‘The world is flat’ by Friedman….and I knew we had a good premier.

        He went to India and China and then he revamped the education system and proved it.

        Penny pinchers have moths in their change purses….not clues.

        • McGuinty sold out Ontario Taxpayers….Our education system is useless…all they teach is liberalism and self-esteem…..Nobody fails….the ultimate socialist state…

          • Really?

            Well see, you have to pay attention in class, and put some effort into it.

            Knowing what words mean…..like socialism….would be a good start.

          • I know Nadine…You invented socialism…so you would be the ultimate authority, right ?

          • Well, now I know how old you are, and how ignorant you are. (Not to mention confused!)

            However, I don’t talk to the Ignoranti……waste of time….so Ciao

      • Not mystifying for an article whose central thesis is to be “there’s no money to spend on the citizenry because we spent it on the citizenry.” We may be in a crap-mess $-wise, but demonizing civil servants is never the way forward and we’d also be in a crap mess if civil services wages were what they were the day Harris came to power.

        • I notice the article title has now been changed.

      • Then why are Ontario schools producing so many idiots?

        • Export purposes…..we send them to Alberta.

          • We in Alberta will gladly take your idiots as long as the pretentious a**holes like yourself stay at home in Ontario, Emily.

          • No, we export them to Alberta as well….you already got Harper and Stockboy

          • Stockboy?

          • The guy in the wetsuit with his ass in the air….creationist and general moron.

          • Hate to break it to you but that idiot only stopped briefly in Alberta. He works out of Vancouver so apparently you in Ontario send your “idiots” everywhere.

          • ‘ He is a former cabinet minister in Alberta, and a former leader of the Canadian Alliance.’

            Hey….you guys keep taking em

          • Given that 1/3 of the people currently living in Alberta are from other provinces within Canada, of course we get our share of all kinds of people. However, seeing that your province is the home to people like Mike Duffy and Pamela Wallin, not to mention Brazeau, etc., as evidenced by the whole housing scandal, I am not sure what point you are trying to make with this ridiculous comment thread.

          • Mmm no, Duffy is PEI and Wallin is Wadena Sask. Brazeau is Quebecois when he’s not being a native.

            This sub-thread began with someone insulting Ontario…..consider yourself insulted back

          • The housing scandal PROVED they both live in Ontario. As for “someone from who knows where insulting Ontario and YOU finding the “need” to insult Alberta in retaliation….what gives with that? Especially after you claim to be disgusted with “vicious attack culture going on lately attacking our province and our country.” So when someone attacks Ontario, you respond by attacking Alberta, even if it isn’t an Albertan that attacked Ontario….wow, makes perfect sense.

          • I’m sorry HI, but that’s not going to wash and you know it.

            Find something else to do with your time

          • Yes, you are right. My time is wasted in pointing out your petty, childish behaviors in attacking Alberta whenever someone attacks Ontario. It is not as if you will ever change the behavior. It is too deeply ingrained in who you are.

          • This is why Alberta has such a sucky image HI…..you interrupted someone else’s conversation, took the victim position instantly, decided to lecture me, blamed everything on outsiders and now you’ve confused the whole thing even to yourself.

            Like I said, find something else to do with your time. Go admire your jeans or summat. Maybe buy a new cowboy hat. Flip a pancake…..but stop with this silliness. It’s boring, and it’ll only end in tears….yours.

          • Hahaha! Aw, poor Emily…did you pickup your “sucky” behavior when you were living in Alberta as one of the “idiots” that were exported to us briefly from Ontario? It’s okay. I know it’s hard to have your own home province picked on. It’s okay to lash out at others even if your are in your late sixties and should be a bit more mature.
            BTW, I wasn’t “blaming outsiders”, I was reminding you that 1/3 of those people who you are continually demeaning in Alberta, are not even from Alberta but I guess that went straight over your head. What was it Thwim called you…it wasn’t a bigoted twit….

          • HI…..I said Ciao….take the hint.

    • You are clueless…The Ontario education system only teaches liberalism and self-esteem. It is a fraud and a huge failure…….nobody fails…..nobody learns anything of any use…..with a grossly under-funded pension system…what a disaster…

      • This comment was deleted.

        • From Ontario schools.

          • Dropped out eh? Too tough for ya?

          • Nadine , I mean Emily…when were you diagnosed as an idiot savant ? Is it OK if I just call you idiot ….for short ?

        • Emilynone….is it hard to breath with your head stuck so far up your own ass ?

  3. Not many years ago, Bill Davis was Premier of Ontario, Bob Nixon Liberal Leader of the Opposition and Stephen Lewis head of the third party NDP.
    I will not compare Dalton McGuinty to Andrea Howarth or Tim Hudak neither of whom could muster even an ounce of class in saying good bye to the former premier. But I would place him in the ranks of honourable, decent, high minded political leaders of the previous generation, who were able to rise above political advantage and reach out to opponents on a human level.
    McGuinty contrary to the vicious angry hate campaigns of the Toronto Sun and Hudak’s Conservative is a decent, honest, dignified, Ontario politician of the old school, caught up in a the politics of personal destruction cleverly practiced in the media onslaughts of the new age.
    I have yet to see or hear a report of McGuinty having in any way added to his personal wealth by using his office of Premier.
    Sadly I think he was, like many others in leadership positions in this age of sophisticated attack and hate message politics, lured into a somewhat isolated presidential style of chief executive surrounded by sycophants, media experts, communications manipulators, pollsters and the like. This inevitably leads normally nerdy restrained low ego sincere politicians into a dangerous place.
    I would say the personal, vilifying, hate campaign against McGuinty unleashed by the Toronto Sun over the past few years was the lowest level of personal attack journalism ever reached in this country. It was cruel, personal, character assassination based on appearance and mannerism, and trumped up charges of corruption which were and are a total fabrication..

    • Thank you for speaking up.

      We have a vicious attack culture going on lately….and it’s harming our province and country

      • Do you have PMS today Emilynone…?

    • God, what boilerplate handwringing. Nobody went after McGuinty’s personal life, and nobody suggested he was evil. What I heard a lot of, by way of criticism, was that he was a fan of old-fashioned big government: much new spending, many new rules to limit people’s behaviour.

      And sadly, his final two years in office rather demolish your claims about his ethical integrity. Civil servants were testifying just this week that they were spiriting files out of his office in his final weeks because they were quite sure his staff would try to illegally destroy them.

      • Well Garnet, as you yourself just posted, people did indeed go after his personal life and suggest he was evil.

        Even a “evil reptilian kitten-eater from another planet” LOL

        Civil servants may have done a lot of things….so might his staff. So might your imagination. Stop trying to blame McGuinty.

        PS And nobody is ‘handwringing’. Some of us just appreciate a good leader when we get one, and say so.

      • Somebody must have been stealing your morning copy of the Toronto Sun for the last couple of years. You must be missing Lubor J Zink.

  4. Thanks a lot Dalton for turning Ontario into a have not province.

    Mike Harris was right in 1999 when he said that “Dalton is not up to the job.” McGuinty’s dismal record speaks for itself.

    Ontario voter’s need to vote the tax and spend, corrupt Lieberals out.

    • Have not?
      Make a list of the cities of Ontario ranked by population. Now take the populations of all the provinces and insert the provinces by population into the list of Ontario cities.
      Have not province? Do this yourself. I’m not doing it for you. But you could start with the number of provinces that are bigger than the GTA and go from there.

      • The Ontario Ministry of Debt is the third larges Ministry in Ontario…..Ontario Liberals piss away over $10.5 Billion per year for Interest on the Debt……Not that is a have-not…

  5. Its funny how often people forget the past Premiers Ontario has had. Mike Harris, Bob Rae, McGuinty wasn’t exactly given a full deck of cards. I’m not necessarily defending our former premiere’s record (the gas plant scandal was an absolute disgrace), but the blame of all of Ontario’s problems need not fall a single mans shoulders

    • Give it a rest. Harris inherited Rae’s problems AND had to deal with massive transfer payment cuts courtesy of Chretien. Look at the province when Harris left and look at it now after 10 years of McGuinty. I’ll take Harris all day, every day thanks very much.

      • Harris fell into the biggest economic boom of the past quarter century. Still left a deficit.

        • Thank you DR

          Harris’ terms included that late 90s boom that saw rises in all Ontario sectors, whereas McGuinty’s included that lovely 2008 recession/depression. Its not very fair to compare the two based on the debt they left.

          Why can’t we all just agree that Ontario is cursed with absolutely horrid premiers?

        • As did McGuinty and the Liberal Vote Monkeys from 2003 to 2008…In spite of that they more than doubled the provincial debt from $130 Billion to $272 Billion in last than 9 years…

          • Let’s not forget that all happened after McGuinty DOUBLING provincial revenues during his reign as premiere. I repeat, he DOUBLED provincial revenues and still ran RECORD deficits.

        • Harris also faced massive cutbacks in transfer payments under the Austerity program that was introduced by Paul Martin and Jean Creton.

  6. The Green Energy Act was not only the ultimate fraud for Crony CRAPitalism…It was the most fascist piece of legislation on Ontario’s history…McGuinty and his band of Liberal Vote-Monkeys took away the rights of municipalities and turned much of Ontario into a post-industrial junkyard with useless industrial wind turbines…He is the Father of the War Against Rural Ontario. Liberals are now forever dead in rural Ontario.

    • I like the fact that we don’t have as many “don’t breath” days anymore.

      • What haselcheck means is that s/he didn’t get paid enough to have a turbine nearby.

        • No …there are no Liberal ridings where we live….Liberals are forever DEAD in rural Ontario…

          • I’m guessing you’re very young to be that silly

          • You must be pretty old …since you have a couple types of dementia, Nadine…

      • Guess that you aren’t paying attention…Most of the pollution in SW Ontario came from U.S. border States like Ohio and Michigan…Once their manufacturing economy blew up….the pollution went away too…With businesses leaving Ontario because of the backwards labour laws and the destructive Green Energy Act…..more businesses will move to more business friendly locations….like Ohio and Michigan….Kiss the jobs good-bye….lucky you are on the dole so you won’t have to worry…

        • Wow….you’re in the last century!

          • Sure Nadine…Nostalgia isn’t what it used to be…

        • Sorry I thought Ontario shut down it’s coal plants as a matter of policy. In fact led to gas plant troubles. Also enabled Ottawa Conservatives to get better stats and claim they were actually doing something about global warming which they were not. I don’t remember of Peter Kent ever gave McGuinty any credit for that or not!!

          • The Ontario coal plants bought scrubbers to reduce to pollution in about 2004….Guess What…McGuinty told them not to install them….cause they would improve the pollution numbers….besides he had a Crony CRAPitalist Venture to give away $ Billions to fake energy companies….Guess that the pollution from the coal-fired plants wasn’t that bad since they still are operating…

  7. Let’s face it..Ontario has been governed for many decades by loser leaders of all 3 parties that were in it for no other reason than to promote their own agendas for them and their buddies,not the PEOPLE………..Ontario has basically been “milked” for all it’s worth and is now nothing more than a complete basket case that should be compared to a third world “sh*!hole”!
    Sad days for the regular hard working honest Citizen!

    • The nonsense that people believe about Ontario is amazing. Ignorance? Envy? Ideology?

      • How’s you yeast infection ? still grouchy ?

        • Attention Editor. The above comment should be removed.

  8. LOL @ whining about the spending habits of the country’s lowest spending province.

    The debt is 95% due to that rather large global economic problem that happened a couple years ago.

    The deficit is shrinking, and already small compared to the size of Ontario’s economy.

    And as another comment noted – saying they can’t afford any services for Ontario’s citizens because they spend too much on services for Ontario’s citizens is Fordian level stupidity.

    • Ont is a very wealthy province….we provide 40% of Canada’s GDP….and we’ve been through much tougher economic times than this, and made out just fine.

      • In case you weren’t paying attention…there are a tidal wave of Boomers going to flood the healthcare system….Too bad the system in Ontario is unsustainable….You may die waiting for procedures….sitting in a line-up….looks good on you…

    • Nice logic…the same logic that killed Detroit and is going to kill Chicago….Stupid legislation like McWynnity’s Green Energy Act will ensure that Ontario is a have-not for the next 30 years…The backwards Labour legislation in Ontario will kill jobs and move them across the border to Michigan and Ohio which are Right to Work States….The cost of Administrative Services like Education and Healthcare are out of control and you can bet that businesses will avoid Ontario…Pay attention…

  9. Okay – I concede – this is a great article – and I missed it on my first read-through – at least you aren’t making excuses for his outrageous misuse of his office – but this is more important than Duffy – and Rob Ford – Mcguinty quietly extended David Miller’s term to four years – it was then that you should have started reporting on him – then maybe we would have saved the $580 million he blew to keep two MPPs in office – you guys are so hot for the Conservatives and Rob Ford that you are letting the real crooks crawl under their rocks – maybe the OPP will get something – but I doubt it – someone else will take the fall and then get a nice appointment – and so it is us, the taxpayers, who will have to suffer. Come on Macleans – you can do better than this.

  10. We have been in economic doldrums for 5 years …and that’s globally, not only in Ontario. The problem we have here is that Ontario is still paying the bills for the country despite its financial situation. If all taxes collected in Ontario stays in the province, we won’t be in this fiscal straitjacket. Would you give your money to help your siblings when you are in dire strait? You won’t. So, why are is Ontario doing this? Time for Ontario to keep all the taxes collected in the jurisdiction. Ontario will only transfer to Ottawa an amount it can afford to give. The rest of the country will have to find their own solution to manage without Ontario’s largesse.

  11. Dalton stayed too long. After the unpopular health tax was brought in a acquaintance who was at that time working for the premier’s parliamentary assistant told me they expected to squeak in for a second term.Few governments last for more than 2 terms. Dalton was good, but he was helped by a weak opposition.

  12. Ontario Liberals…..Turning Rural Ontario into a Post-Industrial JunkYard….one municipality at a time…..The Ontario Liberals War Against Rural Ontario…continues…,.

    Ontario Liberals….Forever Dead in Rural Ontario…

  13. Dalton…Holds the Record for Stupid Ideas…and when he quits …..receives a $313,000 going away present…….There is no Justice…

    • I guess you missed that unlike other legislatures and House of Commons, there is no lifetime gold plated taxpayer funded pension in Ontario. That’s all he gets. Stop griping.

      • Pay attention…He was grandfathered when Harris changed the program…

  14. The Green Energy Act….Ontario Liberals = Crony CRAPitalists…

  15. Real austerity is coming….and you won’t like it…because of our Demographics…

    Save your money…and hide your money in a safe place….You will need it as expensive, inefficient government services will implode….You will need to rely on yourself…Your governments can’t be relied on to provide virtually anything..

  16. Gillies states that “If McGuinty had heeded this sort of advice just a few years earlier (there were plenty of smart people offering it) he could have saved at least some of the pain Ontarians now face. Alas, he waited until 2011 to reach out to Drummond, and even then shied from the economist’s tougher recommendations.”.
    In his 2013 book “Austerity: The History of a Dangerous Idea” Brown University political economist Mark Blyth reports how austerity has failed big time in Europe – just as it did in the U.S. in the 1930s. Why can’t Macleans get a real economist for a writer?

    • The Green Energy Act is a Financial Boondoggle…It is a $28 Billion mistake based on the lie that our coal-plants were causing health issues in Ontario and that Global Warming was real…and not a HOAX…Austerity doesn’t mean that you can’t cut ridiculous, wasteful, excessive spending on DUMB $hit !

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