3/3/17

Cash give-aways haven't helped the Liberals so why double down?

The government has answered the question about who might benefit from the improved fiscal situation of the province.  At least in part.


The government's announcement that they will spend $2.5 billion over three years on hydro subsidies (an average of  $833.3 M per year) takes them further down a road they have already tried, without much to show for it.  

Premier Kathleen Wynne implicitly confirmed growing government revenue but cautioned that this latest cash give-away is putting them closer to falling back into deficit.  She stated:
"Thanks to a provincial economy that is leading all of Canada growth, we can make this change and stay on track for a balanced budget next year and the years to follow.  But it’s going to be a lot harder now and we’ll remain a lot closer to the line."
So far these sort of cash give-aways have accounted for the large majority of the new, in-year spending that has marked the tentative move away from government austerity that began last fall. 

The conclusion the government seems to have drawn from their huge hydro cash give-away in the fall (the "HST tax cut") is that it wasn't enough. 

So they have doubled down.

Well it's true that the previous cash give-away hasn't helped the government's polling numbers.

But will more cash give-aways help them any better? It's pretty easy to forget about something you are no longer paying. 

In contrast, it's hard to ignore mounting problems in your public services. 

New funding announcements aimed at simply maintaining public services amount to only a small fraction of the cash give-aways announced.  

As a result, public services are still starving on an austerity diet.

Wynne's comment, noted above, seems aimed at managing expectations that there are more spending announcements to come. But with an election just over a year away, a Budget in the offing, growing government revenue, and perhaps little to show for the cash give-aways, there probably is more to come.  

But surely no more tax cuts or cash give-aways. 

For his part, Patrick Brown now feels compelled to release Progressive Conservative (PC) hydro policy in the next few weeks. This is a change from the cloak of secrecy he has put up around PC policy, whatever it is. Previously the plan was to announce PC policy at their November convention. 

But there is no sign yet that they will announce anything early about their health care policy.   Who knows what they might do -- hospital cuts? more austerity? Exactly what Brown stands for is as clear as mud. 

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