Defend Public Healthcare

The Financial Accountability Office (FAO) predicts significant deficits over the next several years - despite also predicting significant economic growth. Using the government's accounting method, the FAO is predicting budget deficits of $0.5 billion this year, increasing to $3.6 billion in 2021-22.  If   the FAO is right then we do have a problem in terms of building our campaigns for better funding. Deficits will be used to clobber popular expectations for improved public services.  Already the right has taken up the FAO report to spread the deficit alarm.   While the FAO does make some useful other points, its conclusions about the deficit are likely off base. Revenues and Expenditures: The FAO expects tax revenue to grow 3.9% on average over the next five years, slightly below their expectations for nominal economic growth.  This is significantly better than their forecast for expenditure growth of 3.3% (which, notably, is a little below the underly...

Health care and hospital funding : Despite significant new revenue and lower than expected debt costs, health care spending is almost exactly identical to the amounts planned in last year’s Budget for 2015-2018.  The total health budget for 2015/16 came in (on an “interim” basis) basically the same as planned in the 2015 Budget (that is unusual, more often they under-spend the health budget).    For 2016/17 and 2017/18, they plan to keep basically to the targets set out in the 2015 budget (plus a small increase of $100 million in each of those two years -- an extra 0.2%).  Overall, health is planned to increase 1.97% in 2016/17 and 1.93% in 2017/18. That will see health expenditures fall again as a percentage of the economy but is a little bit higher than the planned all-program expense increase (of 1% in 2016/17 and 1.7% in 2017/18).  That is far short of costs pressure due to increased utilization, aging, population growth, and inflation....

Shocker.  The Ontario government is forecasting that it will beat its deficit forecast -- for the seventh year in a row . The deficit for this year is forecast in t he province's Fall  Economic Outlook and Fiscal Review  to be $1 billion less than forecast in the spring 2015 Budget .  The forecast for next year is already $300 million less than in the 2015 Budget.  That would make eight years in a row. For this year, the decline in the deficit was driven by higher than expected revenue ($1.245 billion more revenue,  primarily due to an underestimation of revenue from the Hydro sell-off and $600 million higher than forecast revenue from personal income and land transfer taxes).  Lower than expected interest expense on debt ($140 million) has also helped.  Program spending however is $397 million higher than expected.   The major in-year increases in spending compared with the 2015 Budget are in two areas, the Hydro privatization...

In a recent long-term report on the economy , the Ontario government recognized that own-source Ontario government revenue as a percentage of gross domestic product (GDP) has declined over the last fifteen years.   The decline is equal to 2 percentage points of the province's GDP. That means the Ontario government is currently losing $14 billion annually.  With that revenue, the deficit (which was $11.3 billion last year) would be gone and we would have cash to spare. But the government also forecasts that own-source revenue  as a percentage of GDP will  continue to decline over the next twenty years as well.     The plan is to cut Ontario government revenue by another 1.2% of GDP.  In today's economy that would add $8.6 billion to the deficit, increasing the deficit by about 70%.     In total, over 35 years, the plan is to cut government revenue by 3.2% of GDP.  That is equal to an annual cut in governm...

Revenue prospects for this year:   An  earlier post  looked at poor job creation in Ontario and the impact that might have on obtaining the revenue goals the government has set for this year.  Last week's jobs report for July was  dreadful on a Canada-wide basis.  But the report noted Ontario saw some pick up in  July , with 15,100 new jobs overall.  However, the job growth in July was all part-time; Ontario actually lost 29,300 full time jobs .  That is consistent with the pattern since July 2013: all the new jobs in Ontario have been part-time, while the number of full time jobs has shrunk 0.4%.   Moreover, the first seven months of 2014 still average only 43,000 more jobs than the first seven months of 2013, less than half the Ontario government's goal of 100,000 new jobs in 2014. Update: As widely reported, the Stats Can Labour Force Survey for July got it wrong.  The corrected report for Ontario provides some ...

With the election over, pressure to cut public programs has become quite intense. In almost all of the corporate owned media someone is barking on about it. Another option -- increasing revenue from corporations and the wealthy is not mentioned.  However, data clearly indicates that Ontario does not have an overspending problem compared to the other provinces. Instead, it indicates Ontario has very low revenue.  Ontario has the lowest public spending of all the provinces on a per capita basis (see the chart from the 2014 Ontario Budget below).  So there is little reason to suspect that we have an over-spending problem.  If anything, this suggests we have an under-spending problem. The Ontario government has also now reported in the 2014 Budget that Ontario has the lowest revenue per capita of any province.  This is particularly notable as other provinces are quite a bit poorer than Ontario and therefore have a much more limited ability to pa...

In December, it was predicted that outgoing finance minister Dwight Duncan would   reduce his deficit forecast just before his departure (for Bay Street).  Duncan had somehow estimated in his fall economic statement that the 2012-3 deficit would be  $14.4 billion, i.e. higher than the 2011-12 deficit  -- and even higher than the 2010-11 deficit! Sure enough, Duncan lopped another $2.5 billion off the deficit in January. In 2010, the McGuinty / Duncan government started its campaign for a wage freeze in the provincial public sector, citing the state of the public books.  At that time they had estimated deficits totaling $74.2 billion from 2009/10-2012/3. Deficit (in billions of dollars) 2009–10 2010–11 2011–12 2012–13 Total 2010 Budget 21.3 19.7 17.3 15.9 74.2 2013 January 19.3 14 13 11.9 58.2 Reduction in Deficit 2 5.7 4.3 4.0 16.0 However, t...