June 17, 2024
On election day, Ontario should remember the importance of spending cuts
People assume cuts mean the government must be spending less than it did the previous year. This is Canada. No government spends less than its predecessor
People assume cuts mean the government must be spending less than it did the previous year. This is Canada. No government spends less than its predecessor.

Government spending cuts have dominated Ontario politics for the past year, and now they are rising to the top of the agenda in next week’s federal election. Liberal Leader Justin Trudeau likes to talk about “Doug Ford” and “cuts” at every opportunity, those apparently being the scariest three words that can be spoken to any Ontarian. With so many seats in play in Ontario and Conservative Leader Andrew Scheer promising spending cuts, the outcome of the election could well rest on how Ontarians regard such cuts.

If we are going to decide an election on cuts, it might be wise to spend a little time considering what the term really means. When people hear about cuts, an easy first assumption is that government must be spending less than it did the previous year. That seems obvious, but this is Canada. No government spends less than its predecessor.

The Ford government often reminds people that spending under the PCs is higher than it was under the Liberals and will go higher every year. That’s the same scenario Scheer envisages. His plan calls for an average spending increase of 1.8 per cent a year.

That doesn’t sound too scary, but Scheer has vowed to balance the budget over five years. That’s the same promise Ford made. People sometimes assume that budget balancing has to be accomplished through cuts but the factor that is often discounted is the increase in tax revenue created by a growing economy. In Ontario, for example, the government anticipates revenue of $154.2 billion this year. Two years from now, that will have risen by $9.5 billion. Federally, total revenue is expected to increase from $338.8 billion this year to $395.5 billion four years from now. That’s before any changes brought in by the next government. The goal, for both Scheer and Ford, is to keep spending growth lower than revenue growth, whittling down the deficit.

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See Also:

(1) The Canadian election is turning into a comedy of cringe

(2) Scheer set to win most seats, according to polls

(3) Barack Obama’s Twitter endorsement for Justin Trudeau was “inappropriate,” Peter MacKay says

(4) Will the real Justin Trudeau speak up

(5) Dark Days Ahead?

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