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Monday, July 15, 2024


Is starving Ontario’s hospitals and schools really something to brag about?

Protesters marched to Queen’s Park on Tuesday to protest the sweeping health-care cuts and reforms proposed by the provincial government. (Derek Hooper/CBC)

The root cause of Ontario’s low spending on public services is our strong aversion to raising the revenues needed to pay for them.

As budget day draws near at Queen’s Park, here’s a point to ponder: Ontario has the lowest program spending per person of any province in Canada.

That little fact first popped up in a provincial budget in 2013. Charles Sousa, then finance minister, repeated it many times after.

It was a strange thing to be proud of — a bit like bragging to your neighbours that you spend less on food for your children than they do for theirs. To the government of the day, though, it was proof that they were pinching every penny. And they were, mostly.

A decade later, Ontario’s per capita spending on public services and infrastructure is still dead last. But now, the funding gap between us and the other provinces has become a chasm.

In 2022, Ontario’s program spending per person was $3,800 less than the average of the other provinces. Put more plainly: for every dollar per person that other provinces spend on programs, Ontario spends 75 cents.

The results are easy to see. Nurses are fleeing public health care. Ontario’s funding for colleges and universities would have to double just to be average in Canada. In April 2023, the province gave school boards $1,200 less per student for the year, adjusted for inflation, than they received in 2018.

Last but not least, people are going hungry in this province.

Food bank use is at record levels. Tent cities are everywhere. Individuals receiving Ontario Works payments are expected to survive on $733 a month — much less, after inflation, than a decade ago.

This starving of public services has little to do with careful stewardship of public dollars. There’s nothing “efficient” about having too few family doctors or too few educational assistants in schools. Underfunding is just underfunding.

The root cause of Ontario’s low spending on public services is, sadly, obvious: our strong aversion to raising the revenues needed to pay for them. When it comes to finding “own-source” revenues (leaving out federal transfers), Ontario is hardly trying at all.

In 2022, the other provinces spent an average of 18.5 per cent of GDP to pay for hospitals, roads, schools, courts, and all the things government does. Ontario is simply not in that league. If we funded programs the way other provinces do, the revenue boost to Queen’s Park would be more than 20 per cent — well over $40 billion a year.

Unfortunately, being average has become an ambitious stretch goal for Ontario.

Under current plans, it’s a goal we won’t reach any time soon. Rather than finding funding to support public services, the current government has been doing the opposite, chipping away at its own revenues for more than five years.

Since 2018, almost every budget or fiscal update has included some new tax cut, tax credit, or fee cut. Remember the end of licence plate fees? That change is costing the province more than $1.1 billion this year alone—enough to pay 12,000 nurses.

In the last five years, the Ministry of Finance has brought in close to 30 measures to reduce its own revenues. All told, those changes drained no less than $7.7 billion from the provincial treasury in 2023-24.

This is not an accident; it’s a technique. In the 1980s, right-wing politicians discovered that the fastest way to cut government spending was to cut revenues first and plead poverty afterward.

This approach is at the root of our funding problems. The overarching goal is not to use public dollars efficiently, it’s to drive economic activity into the private sector so investors can turn a profit. This is why the current Ontario government has no qualms about privatizing surgeries and diagnostic procedures — even though private procedures can cost more than double what they cost in a public hospital.

Underfunding to privatize is the wrong approach. Ontario needs healthy, robust public services. Feeding them, not starving them, is the only way to go.

Randy Robinson is Ontario director of the Canadian Centre for Policy Alternatives.

Randy Robinson
Randy Robinson
  Randy Robinson is Ontario director of the Canadian Centre for Policy Alternatives.
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