The Tale of Two Budgets

This past week, taxpayers in Ontario were treated to the news of how both their federal and provincial governments will spend their money. On the surface the two budget documents were very different. The federal government document spoke of fiscal responsibility and a balanced bottom line. The provincial government document included a storyline that excused its increased spending and its deficit, and argued the need for greater transportation spending. Two very different narratives…

However, stripping away the political rhetoric of the two governments, it is remarkable how both budgets make the case for “interventionist governing” – taxpayers paying public servants (more) to manage their lives (to an even greater extent). The real bottom line is Canadians pay taxes to support government programs and services – and we have come to accept our governments to spend our money on cradle to grave institutions and bureaucratic paperwork.

Let’s look at these two budgets through the prism of us bankrolling big government.

The Federal Purse

Federal Finance Minister Joe Oliver’s performance won headlines that heralded a Conservative balanced budget. In reality, to achieve this desired equation, the federal government had to take $3.4 billion from the Employment Insurance operating surplus and another $2 billion from its Contingency Fund, set aside for a rainy day.

This financial wizardry was done because the federal Conservatives have had a hard time cutting programs and services and would not cut anything in an election year. Instead, the Conservatives sprayed dollars to a choice number of causes, and attempted to hood-winked Canadians with their creative math. Perhaps the most observant comment on the federal budget was that of Andrew Coyne:

After 10 years of Conservative rule, the federal government does virtually everything it ever did, pokes its nose into just as many areas of national life, taxes, subsidizes, and regulates very nearly as much, and at considerably greater expense (even after six years of restraint, spending is still 12% higher, after inflation and population growth, than it was when the Tories took power).

(ed. – Andrew Coyne’s article is worth the time to read – click here.)

In the end, this federal budget simply tore another page from Stephen Harper’s Conservatives playbook to pay lip service to curbing government costs while finding ways to support a bulging, interventionist government.

The Provincial Purse

Ontarians get a double dose of “big government” when looking at Queen’s Park, as the Ontario Liberals operate an unapologetic tax-and-spend-and tax-some-more government. Here’s a Provincial Government that has increased the Province’s public debt to almost $300 billion, or by 115% since taking power in 2003. This year’s budget delivered yet another deficit of $10.5 billion and upped its spending up $2.4 billion. This is the ninth consecutive deficit delivered by the Ontario Liberals.

Ontarians now pay $11 billion per year for interest on their government’s debt – and that’s money that can’t be spent on health care, education or transportation. No where is there a sign that the Ontario Liberals understand the fundamental realities of carrying this debt load. Instead, we have a Premier who talks of increasing spending and papering-over the annual deficits. Thanks to Premiers McGuinty and Wynne, the province’s debt is on track to balloon to $325 billion by 2018, or $23,000 per person in Ontario.

To help pay for the government’s spending increases and new spending on transportation (and the almost $1 billion per month debt payment), the Ontario Liberals are introducing new tax measures: the cap-and-trade carbon tax, a new pension payroll tax, a new beer tax and the additional monies collected from Ontarians’ skyrocketing hydro bills (that’s before the Liberals have to sell off 60% of Ontario Hydro to help with servicing the debt through the next election cycle.)

Here’s an alarming fact: The combined federal, provincial and territorial deficits for 2014-2015 add up to $6.47 billion, compared to Ontario’s $10.9 billion.

So, whereas the federal government is finding creative ways to move money around to support the continuation of its programs and services, the provincial government is spending its way into what will be a severe fiscal hangover once the bills come due. And neither of these governments will change their taxing ways until Canadians demand an honest, public discussion about “big government” and its costs. (ed. – In writing this, I can’t help but think of the Canadian Taxpayers Federation’s slogan: “Tax me, I’m Canadian.”)

Unfortunately, in Ontario this week, we had two budgets string up one taxpayer.