Ontario budget: Kathleen Wynne gambles voters won't mind a deficit
As June 7 election looms, Liberals promising billions in new spending on daycare, hospitals, drugs
Today's Ontario budget will be more a Liberal campaign platform than an actual budget, because the spending plan will only become a reality if Kathleen Wynne's party wins re-election in little over two months.
Wynne and her Finance Minister Charles Sousa have already revealed billions of dollars in pre-budget announcements that will form the backbone of the Liberal re-election efforts:
- Free daycare for children from age 2½ to kindergarten ($2.2 billion over three years)
- Free prescription drugs for all seniors ($575 million)
- The biggest annual increase in hospital spending in a decade ($822 million)
- Expanded mental health services ($2.1 billion over four years)
- More support for special needs education ($300 million)
And there's more to come today. In the government's throne speech last week, the Liberals also promised the budget would include "major investments in home care" and would give people who don't have workplace benefits "access to more affordable prescription drugs and dental care."
It's also quite likely the budget will include one big surprise that the Liberals have not telegraphed, the one thing that they want all the headlines to focus on later today and tomorrow.
Don't be shocked if that big surprise is a tax cut, targeted at middle- to lower-income households.
A tax cut would serve multiple political purposes for the Liberals in the campaign for the June 7 election. It would compete with the tax cut already floated by the opposition PCs, potentially outflank the NDP and help combat the Wynne Liberals' reputation as a tax-and-spend government.
It would also fit with a theme in Wynne's messaging lately that many people in Ontario are struggling to get by and need help to make life more affordable.
Despite all the hefty spending the Liberals have already promised, they could still manage to squeeze in a tax cut into today's budget because they're willing to table a deficit as high as $8 billion. Sousa flagged earlier this month that he will propose to plunge Ontario back into the red for 2018-19.
This comes even though the economy is booming, unemployment is at its lowest since the turn of the century, and tax revenues are rolling into government coffers.
The Liberals ran nine straight deficits before finally balancing the budget in 2017-18. As recently as November, when he released his fall economic statement, Sousa was still projecting staying in the black for the next two fiscal years.
So why run a deficit instead? Wynne and her strategists are gambling that Ontario voters care less about budget shortfall than they do about having more government services.
They're also making two political calculations about their opponents.
They believe the Progressive Conservatives under new leader Doug Ford will not support much of the new spending, nor be willing to run such a deep deficit. That would give the Liberals the chance to portray the PCs as cutting services Ontarians want.
Speaking to reporters Tuesday, Ford would not commit to maintaining the Liberal promise of free daycare.
'Other people's money'
"The premier's been running around like Oprah, giving everybody what they want with other people's money," said PC finance critic Lisa MacLeod in question period on Tuesday. "She's got a massive, massive deficit that's going to be coming."
The Liberals also believe their promises will match or exceed the bulk of what the NDP proposes. They hope that will bleed votes away from Andrea Horwath's party.
The budget "can have every promise under the sun that Kathleen Wynne wants to put forward," Horwath told reporters at the legislature on Tuesday. "They had a chance over these last 15 years to implement all of those things, but they chose not to."
The NDP argument is that the Liberals have starved public services for much of the past decade and are only now, with an election looming, putting money back in.
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