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Has the Financial Accountability Office over-estimated the deficit once again?

Buried in this week's Financial Accountability Office (FAO) report on the Ontario government books is a very quiet admission that Ontario ran a surplus of $700 million in 2017/18 (when using the government's accounting method for pension surpluses and hydro).  Just a year ago, the FAO claimed there would be a deficit of $500 million.

This $1.2 billion over-estimate is not surprising. The FAO has consistently cried wolf.   A year ago, they put the 2016/17 deficit at $2.8 billion (when using the government's accounting methods).   Now they put it at $1 billion with the same accounting methods.  

Towards the end of the 2015/16 fiscal year they overestimated the deficit for that year by $3.3 billion to $5 billion more than they subsequently admitted.  Even after that fiscal year ended, they put it at $2.2 billion more than they later admitted.

Now the FAO has changed its accounting methods (following the Auditor General) to claim a much higher deficit.  Accordingly it too forecas…
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Budget underwhelms on health care. Bait and Switch is such a nasty term

Last year the government promised a 4.64% health care funding increase in 2018/19. Then, earlier this month, they announced they would deficit spend to improve hospitals, mental health, home care, and child care.   Three of the four items cited by the government for improvement were part of health care. 

As it turned out the government did in fact promise in today's Budget to deficit spend $6.7 billion. (Due to a $1 billion fall in expected revenue, the extra spend amounts only to an extra $5.7 billion for 2018/19 programs – but that is still a significant chunk of new found cash for program spending.)  
If health care had gotten even a proportionate share of this new $5.7 billion in program spending, it would have added an additional $2.4 billion to health care  --  in other words about another 4% increase.  

But all health care got -- despite the government’s health care rhetoric -- was an extra $284 million. That may sound like a lot but with a total health care spend of $61 bill…
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Hospital funding announcement falls short

Bowing to public pressure and the over-capacity crisis in our hospitals, the Ontario minister of health and long-term care, Eric Hoskins, announced Friday hospital funding of $187 million to deal with next year’s flu season.
While this is significant it is inadequate for several reasons:
The funding is for the next fiscal year. In other words, the minister is merely leaking information that would normally be released with the Budget.Most of this is not new money. Following pressure from labour and the community, the minister announced  $100 million for hospitals last fall to fund 1,200 beds.  But the government also made clear that money may not continue in the next fiscal year starting April 2018 -- the continuation of the funding would depend on the "budgetary process".  So this announcement merely confirms that this money will continue at least one more year and, positively, that they will increase the annual funding for this hospital bed …
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Government plans to take $400 annually from every employee -- and give it to employers

The government plans to cut employer Workplace Safety and Insurance Board (WSIB) premiums $2.4 billion per year.  This is funded by cuts to workers compensation, as discussed below.  Here's the plan to cut employer premiums laid out in the 2016 Budget documents:
The WSIB has taken significant steps to reduce costs, and its finances have been improved by growth in investment returns and insurable payrolls. After hitting a high of $14.2 billion in 2011, the unfunded liability was $6.8 billion as of the WSIB’s 2015 third quarter that ended September 30, 2015.  Due to progress made to date, employer premiums have not been increased for three years. In its ‘2015 Economic Statement,’ the WSIB estimated that when the unfunded liability component is removed from the premium rate, it will be able to deliver $2.4 billion annually in premium reductions. This would represent an average premium rate reduction of about 40 per cent, with the average premium rate declining from $2.46 per $100 of p…
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Six more problems with Public Private Partnerships (P3s)

The Auditor General (AG) has again identified issues in her annual reportwhich reflect problems with Ontario health care capacity and privatization.   First, here are six key problems with the maintenance of the 16 privatized P3 ("public private partnership") hospitals in Ontario:
There are long-term ongoing disputes with privatized P3 contractors over the P3 agreements, including about what is covered by the P3  (or “AFP” as the government likes to call them) contract.The hospitals are required to pay higher than reasonable rates tothe P3 contractor for  maintenance work the contractor has deemed to be outside of the P3 contract. Hospitals are almost forced to use P3 contractors to do maintenance work the contractors deem outside of the P3 contract or face the prospect of transferring the risk associated with maintaining the related hospital assets from the private-sector company back to the hospitalP3 companies with poor perf…
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Health care funding falls, again

Real provincial government health care funding per-person has fallen again this year in Ontario, the third year in a row.  Since 2009 real funding per-person has fallen 2.6% -- $63 per person. 

Across Canada real per person funding is in its fourth consecutive year of increase. Since 2009, real provincial funding across Canada is up $89 -- 3.6%.
In fact the funding gap between Ontario and Canada as a whole has gown consistently for years (as set out below in current dollars).

Ontario funds health care less than any other province -- indeed, the province that funds health care the second least (B.C.) provides $185 more per person per year, 4.7% more.  
Provincial health care spending in the rest of Canada (excluding Ontario) is now  $574 higher per person annually than in Ontario. 

 Ontario has not always provided lower than average health care funding increases-- but that has been the general pattern since 2005.
Private expenditures on health care have exceeded Ontario government increases …
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Public Sector Unionization Grows

The composition of the labour movement has fundamentally changed over the last twenty years. The article below reviews dramatic changes in public and private sector unionization and some surprising differences that have emerged between Ontario and the rest of Canada. Potential for growth is possible, even in the public sector.

Ontario has 1.3 million public sector workers and currently 943,000 of them are covered by a union. That means that 72.2% of public sector employees have union coverage.   
Since 1997, public sector union density has modestly increased from about 70% to 72% of total public sector employees.  With a significant increase in public sector employment also occurring over that period, there has been an increase in public sector union coverage from 652,000 to 943,000 employees– about a 47% increase in 19 years.




That still leaves another 363,000  unorganized public sector employees. Assuming that 10% of public sector employees are management (130,000) then there would be r…
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