If you were hoping for changes to fiscal policy when the Ford government took over at Queen’s Park in Ontario, you are surely disappointed. With respect to spending and debt, continuity has prevailed between the governments of McGuinty, Wynne, and now Ford, a new study from Fraser Institute highlights.
Fraser Institute senior fellow Ben Eisen’s analysis (which excludes COVID-related spending measures) finds that like its predecessors, the current Ontario government has reduced the growth in government spending but has not actually cut spending (before adjustments for inflation). Instead, the same deficit-reduction strategy of McGuinty and Wynne in the 2010s is being employed: aim to slow the growth in spending and allow time for revenues to catch up to spending levels in order to balance the budget.
“After adjusting for COVID spending and federal emergency aid, the Ford government’s fiscal plan projects average nominal deficit reduction of $2.41 billion per year over five years. By comparison, from 2010/11 to 2015/16, the McGuinty and Wynne governments achieved a nearly identical annual average deficit reduction of $2.38 billion over the five years.”
Program spending coming out of the pandemic also forecasts similarly to what occurred in the aftermath of the recession caused by the financial crisis.
“Excluding emergency COVID spending, the 2021 budget forecasts that nominal program spending will grow by a cumulative total of 8.5 percent over three years. By comparison, in the three years immediately following the 2008/09 recession, Premier McGuinty’s government increased spending by a total of 6.6 percent.”
Despite the superficial differences in temperament and rhetorical style of these different governments, their policies on important fiscal matters have been remarkably similar, Eisen concludes.
“When it comes to spending, deficits, and debt, the evidence clearly shows there’s been no significant policy shift accompanying the change in government in Ontario.”
