Despite multiple crises that show no sign of getting better, the government of Ontario continues to dramatically underspend on public services.
On Wednesday, the Financial Accountability Office of Ontario reported that in the first three quarters of the current fiscal year (2022-23), provincial program spending had increased by just 1.9 per cent compared to the same period a year earlier.
It is misleading to call this an “increase” at all. With inflation at 6.6 per cent and population growth at two per cent, the province would have had to increase spending by 8.6 per cent just to maintain public services at last year’s levels. In dollar terms, overall program spending should have already gone up by another $7.5 billion this year.
That didn’t happen. What’s happening in health care, education, and other services tells a story of a government that simply refuses to invest in the services Ontarians need.
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Health care on life support
The current crisis in Ontario health care stems not only from the pandemic, but also from bad public policy. Emergency room closures, backlogs for surgical and diagnostic procedures, a surge in respiratory viruses in children, exhausted nurses leaving the profession—the correct response to these crises is to pour resources into the system. That should be obvious.
Instead, the provincial government only increased overall health care spending so far this fiscal year by 2.2 per cent compared to the same period in 2021-22. This is $3.3 billion below the level of spending that would have been required just to maintain inflation-adjusted spending per person, let alone improve conditions or increase the quality of care in our hospitals and across the health care system. And, at 2.2 per cent, the province’s spending on hospitals increased at the same glacial pace as overall health spending.
Education funding nearly frozen
According to the FAO, year-over-year spending on education increased by 4.6 per cent between the first three quarters of 2021-22 and the first three quarters of 2022-23. That sounds good—until you dig into the numbers. As the FAO explains, $762 million—or 89 per cent of the new education money this year—is actually going to expand child care in Ontario. As the FAO has reported elsewhere, 97 per cent of that funding is coming from the federal government, so the actual expenditure by the province is very small.
Remove child care dollars from new education spending and the actual spending increase on elementary and secondary education is 0.5 per cent. In contrast, CCPA Ontario has estimated that helping children bounce back after the pandemic will require that the province increase base funding for education by at least 13 per cent. A funding increase of less than one-half of one per cent is nothing less than cruel punishment.
Ontario government spending projections are, increasingly, works of fiction: it is no longer a surprise when the province spends less than it budgets, as it has so far this year. For those hoping to understand provincial finances, the key is to look at actual spending. Through that lens, the current government’s approach to public services comes into focus. Spending less than budgeted reduces public services for Ontarians. And, coupled with tax cuts that have been implemented, it results in a shrinking public sector and weakened public services.
That opens the door to increased private profit-making off of the public services that Ontarians hold dear. Based on the government’s latest moves—paying for-profit companies to perform surgeries and paying private tutors to educate our children, for example—that appears to be the point.
