Message to BC

Ontario learned the hard way
July 1, 2002

The recent Ontario provincial budget probably doesn't sound like exciting summer reading to most people, but British Columbians might want to pay close attention. The political message from the budget is clear: Mike Harris' so-called "Common Sense Revolution" is nearing the end of the road-just as BC's "New Era" is getting going.

Although Ontario's budget did nothing to address major public service deficits in education, housing and social assistance, it did suspend previously promised tax cuts, increase health care spending substantially, and provide new funding for water treatment. This change of direction offers some hope for the future to Ontario citizens concerned about the deterioration of public services and quality of life since 1995. It also offers an opportunity for others in Canada, whose governments have picked up "Harrisism" as an export product, to learn from our painful experience.

Mike Harris' "revolution" has been a abject failure both fiscally and socially, even on the Ontario Conservatives' own terms.

The Common Sense Revolution was supposed to be about fiscal responsibility and reducing the deficit. Yet despite the longest continuous economic expansion in the province's history, Ontario's public debt has increased by $20 billion under the Tories. Half of that increase was incurred to pay for tax cuts granted before the books had been balanced.

The Common Sense Revolution was supposed to be about tax relief for average families. In fact, most of the benefits of the tax cuts went to the wealthiest 20% of the population, and to profitable corporations. For most people, the tax cuts- looking a lot smaller than advertised-have been gobbled up by user fees and increased costs to provide services privately instead of publicly.

In the process, Ontario's revenue base has been slashed by 20%. A recent estimate by the Federal Department of Finance puts the impact of provincially-initiated corporate and personal income tax cuts at $12.3 billion for 2002-03. The Ontario Alternative Budget estimates the impact of all Ontario tax cuts, including corporate property tax cuts and employer health tax cuts, at $13.4 billion. No matter how you slice it, that's a lot of missing revenue.

This huge hole in government revenue is reflected directly in a large and growing public services deficit. In the elementary and secondary education system, the effects of over $2 billion in cuts since 1995 are being felt across the province in school closures, program cuts, and waiting lists for special education programs. Parents are being asked to fundraise for books and gym equipment. Physical education programs are being restricted. And many school boards, having hit the wall financially, will operate deficits in 2002-03 in defiance of the Education Act.

After closing hospitals and laying off nurses, the government has gone on a hospital building spree and created an emergency program to deal with a shortage of nurses. Waiting lists for basic services are growing, and emergency rooms are routinely closed to new patients arriving by ambulance.

Many working families live from crisis to crisis, as they scramble to fill the void created by child care funding cuts. College and university tuition have soared, putting post-secondary education out of reach for many families and saddling graduates with crippling levels of debt. And perhaps most shamefully, in Canada's wealthiest province, homelessness and hunger are growing and growing.

A deficit in the tens of billions in investment in public infrastructure has emerged. Our sewer and water systems have been found by public inquiry to be substandard. Roads are deteriorating. The highest profile case in the mess of Ontario's public-private partnerships-the construction and sale of Highway 407-took the people of Ontario to the cleaners, selling an asset for $1.6 billion that is now valued on the books of the purchasing company at more than $5 billion.

This is just the tip of the iceberg. Both economically and politically, the Harris Revolution is over. Every day, Ontarians are reminded that the cuts of the Harris years are not sustainable. The Conservatives themselves are now rushing back to the political center in the hopes of salvaging the next election. Unfortunately, it is difficult to take much satisfaction in the early stages of this retreat. It will take years to renew Ontario's public services, and the damage caused to the province's social fabric may never be repaired.

The same is in store for BC, only worse. Gordon Campbell's policy script is a warmed-over and speeded-up version of the failed Ontario experiment. Tax and spending cuts have been implemented faster and on a larger scale, in spite of the fact that BC doesn't have the prospect of record growth in exports to the United States to bail the government out of its self-inflicted fiscal mess.

There is an important message here for people in provinces headed down the road paved by Mike Harris: the bridge is out, and at the end of the road you will find inequality, social division, higher levels of public debt, impoverished public services, costly policy reversals, and a daunting task of renewal. Read the last chapter of the book now, and change the ending.

Hugh Mackenzie is a CCPA research associate, Director of Research at the United Steelworkers of America.