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Last week, the Ontario Public Service Employees Union released an interesting report by the Centre for Spatial Economics on the economic impact of proposed provincial budget cuts. It provides a timely reminder that the public sector is a crucial component of the economy, with public spending also supporting many private-sector jobs.
The Centre for Spatial Economics concludes that the Liberal budget presented last month would subtract 0.6 from provincial GDP growth and eliminate 105,000 jobs (65,000 public and 40,000 private) in 2015. Removing over $20 billion from Ontario’s economy would in turn reduce annual provincial tax revenues by over $2 billion.
It’s worth noting that the economic cost of provincial austerity would be in addition to federal austerity, which is already having a visible effect in Ontario.
Erin Weir is an economist with the United Steelworkers union and a CCPA research associate.
