Utter Incompetence

If you take a close look at Doug Ford's first budget, Martin Regg Cohn argues, you begin to understand how incompetent he and his government are:

By rejecting the bureaucracy’s best advice — dismissing the non-partisan professionals as know-nothings — Ontario’s self-styled “Government For the People” shortchanged the people. Now we are all paying the price for a budget built on a foundation of false assumptions.

And flawed accounting.

On paper, the budget purports to spend a record $163.4-billion — a hefty $4.9 billion more than the last Liberal budget delivered some 12 months earlier.

But those additional billions are not all going toward front line services, nor allocated to future infrastructure. Social services, for example, will be cut by $892 million, reaching $1 billion the year after.

Instead, the money is being misallocated to a fiscal chimera, born of an obsession to redo the province’s books.

Controversial accounting changes would render worthless, for the first time, a hefty $11 billion surplus from a jointly-held pension plan long listed on the province’s books as an asset. By blowing a hole in the budget, the Tories suddenly displaced billions of dollars from regular spending that had to be found — and ultimately defunded — elsewhere.

A note in the government’s financial statements shows $2.7 billion added to the budget deficit in order to “provisionally adopt auditor general’s accounting treatment of pension expenses.” That’s a reference to auditor Bonnie Lysyk’s surprise demand that Ontario stop counting any such pension surplus as an asset — unless the fund fell into deficit (in which case, with utter inconsistency, she’d count it as a liability).

Under the last Liberal government, top civil servants had pushed back against Lysyk, noting that she and her predecessors had fully endorsed treating it as an asset since 2002 (not to be confused with raiding a pension fund, which remains illegal). Ultimately, the previous government heeded the advice of an outside panel of accounting experts who found Lysyk’s analysis fatally flawed — akin to claiming that merely because depreciation is an abstraction, it’s an imaginary number.

Interestingly, another panel appointed by the Tories landed on a similar actuarial analysis, noting that a pension surplus could not logically be worth nothing (as Lysyk had insisted). Yet in their zeal to dismiss and demonize anything that came before them, the PCs ignored all outside advice in adopting the auditor’s audacious demands.

And the damage will not just occur this year, it will be ongoing:

Another $2.4 billion in indebtedness was added to our budgetary burden, thanks to the auditor’s criticism of a 2017 hydro discount plan enacted by the Liberals under public pressure. Lysyk had argued the refinancing scheme would get lower interest rates if the borrowing went on the province’s books — underwritten by taxpayers rather than ratepayers (via OPG). Cheaper, but not fairer — henceforth the hydro bills of cottagers and affluent customers with outsized properties will be subsided by all Ontarians, rich or poor.

Another $1.5 billion in revenues were forfeited by the Tories in the last fiscal year after they killed the cap-and-trade program that required polluters to pay a price for carbon (with the proceeds going to transit investments and subsidies to schools and hospitals for energy retrofits). A further $308 million in scheduled tax increases were also cancelled.

Together, those tax and accounting changes add up to roughly $7 billion in recurring revenues that must be found elsewhere. Every year.

The Fordians did what conservatives have done for decades. They fled from expertise. Is it any wonder that Ford's support has crashed among Ontarians? They know incompetence when they see it.

Image: Times Higher Education