Kathleen Wynne certainly has someone on staff who is working overtime coming up with bon mots for the Premier. The media reported Wynne’s comments on Tuesday about PC Leader Tim Hudak’s plan to slash 100,000 public sector jobs. She said “no one since Donald Trump has been as eager as Tim Hudak to say the words ‘you’re fired.’” The Premier likely senses that the extreme pledge to cut jobs – more than double Mike Harris’ public sector roadkill – is unpopular and likely to be a wedge issue. Last Friday she succinctly suggested that Hudak was converting “paycheques into pink slips.” We’ve noticed that our friends at CUPE also thought that summary phrase a good one and are urging their members to stop Tim Hudak’s “pink slip pledge.” Has anyone calculated just what the severance alone will be, much less the cost of recruitment when we truly find out how many really were essential?
Just prior to the Sousa budget, Kathleen Wynne had announced that the province’s lowest waged personal support workers (PSWs) were going to get a retroactive raise. The minimum wage for PSWs has been stuck at $12.50 per hour since 2006. The government said it would raise that amount by $1.50 retroactive to April 1st. The Personal Support Network of Ontario issued a bulletin this week saying they have been leaving messages with the Health Minister’s office to clarify the status of the raise. The PSNO said they spoke with a political staffer and expressed their disappointment, saying this “was a serious letdown to the sector and to the workforce.” In reporting on the original announcement, the Globe and Mail said given the first $1.50 raise is retroactive, “it would take effect even if the budget falls, forcing a snap election.” That raise is expected to cost the government $50 million this budget year.
Evidently Tim Hudak believes he can run a government for free. In addition to a whopping 30 per cent cut to corporate taxes, Hudak announced on Wednesday that he also plans to cut personal income taxes by 10 per cent once the budget is balanced. Evidently there are no other priorities a Hudak government would have by that time – no need for transit, infrastructure renewal, highways, health care, education or even that new hospital the South Niagara community has been seeking. Mike Harris wasn’t big on infrastructure. Don’t count on Timmy to build anything much either.
NDP Leader Andrea Horwath is getting in on the budget cutting too. Wednesday Horwath said she would cut $600 million in spending, complaining there is too much “waste in the system.” She would establish a “savings and accountability” minister after trimming the size of cabinet by about a third. Is this on top of the independent financial accountability office she said the Liberals had been dragging their feet on? And would such a Minister come into conflict with the independence of such an office? After referencing e-Health and ORNGE, Horwath told the media. “I think that kind of waste is happening all throughout the Ontario’s service and I think we need to get to the bottom of that waste.” At least she didn’t talk about gravy. Canadian Centre for Policy Alternatives economist Hugh Mackenzie has said in the past tax cutters often trot out government waste to justify cuts to public services. “A little perspective will tell you that, overwhelmingly, public money is spent on things that Canadians value in their everyday lives.” The stupid things that they trot out as evidence of waste “don’t add up to very much money” Mackenzie said in 2009.
How many public sector workers are there anyway? It’s a fair question to ask given Tim Hudak’s promise to whack 100,000 of them. The Canadian Centre for Policy Alternatives says the core public service only employs about 60,000 people. Agencies, Boards and Commissions add up to another 88,483. Of that group, the 9,000 that work for the OPP would be protected. There are 39,712 people who work for government enterprises – the CCPA gives the example of the LCBO, OLG and provincial parks. Of course these folks are actually generating revenue for the government, so the wisdom of whacking them makes little sense. Hudak says some of his cuts could come from privatization, which just means a different 39,712 people would be doing the job and subsequently transferring less to government. The CCPA points out that if Hudak’s job cuts were to come entirely from “administrative positions,” it would take out 78 per cent of these workers. The vast majority of Ontario workers are in the so-called MUSH sector – municipalities, universities, schools and health. Health and social services account for 238,555 people. Hudak has promised not to cut doctors and nurses, but the some of the staff cuts could come from other professionals within our sector. The other big chunk of workers are in the school boards – teachers, support staff and education administrators. They amount to 285,623 people. Asked whether the cuts would include teachers, Hudak said it does. There are another 322,357 municipal workers, although Hudak has little control over them beyond cutting transfers to that level of government. Municipalities would then have to choose between cutting staff or raising property taxes. The last group is federal government workers, who are also out of reach of Hudak. There are 181,272 directly employed by Ottawa and another 42,491 in Federal government enterprises (that also make money).
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The other point that Ontarians should be paying attention to is Hudak’s boast that he will lower corporate taxes in Ontario to the lowest in the world, from its current 11.5% to 8%. Note that even at the current 11.5%, corporate taxes in Ontario are already substantially lower than the average corporate taxes in the U. S. at about 18% (there is a wide range in different states from about 12% to 30%, I think). It is also already one of the lowest in the world.
This point of making Ontario’s corporate taxes the lowest in the world is actually quite profound, or astonishing, if one considers its full implications. For a start, if Hudak keeps his promise, Ontario’s tax will be even lower than many of the countries which do not have universal health care or social benefits (e.g. many of the poorer Asian countries). So the obvious question is how he would be able to fund our healthcare and social benefits if he decreases his revenues from corporate taxes so drastically?
Then when one realizes that on top of the above, Hudak is promising to pink slip 100,000 public sector jobs, or people with better salaries/benefits, and presumably, paying more taxes than many private sector jobs, the other obvious question is how he can balance the budget in 2016(?) as promised if he is reducing his revenues drastically through both these routes.
Quite clearly, Hudak’s numbers don’t add up. Either that, he is planning to drastically reduce services currently enjoyed by Ontarians (education, infrastructure spending, healthcare, your guess is as good as mine). Alternatively, he and his apparent ideological soulmate, that other “Economist”, Stephen Harper, are applying Economic principles that the rest of us are unfamiliar with. With Hudak, we may already be seeing some of that: apparently he can create a million putative jobs by first cutting 100,000 real jobs.