Deficit spending OK during major economic downturn, PC Leader Hudak says

TORONTO – The Progressive Conservatives would run balanced budgets once they eliminate the red ink in 2016, but deficits are OK if there’s an economic crisis, party leader Tim Hudak said Friday.

The federal Conservatives and the provinces — including Ontario — “did the right thing” when they started running deficits during the recession, he said.

“They had to spend during a significant downturn,” he said. “But they’re balancing their books.”

However, the Tories have pledged in their platform to pass a law aimed at stopping the government from spending more than it’s taking in.

The proposed Spending Within Our Means Act would “prevent the government from growing beyond a fixed percentage of the economy,” the document says.

The Tories also voted against the governing Liberals’ 2009 budget, which plunged Ontario into red ink.

Hudak now says it wasn’t wrong to run a deficit, but seven provinces have balanced their budgets and the federal government is anticipating a surplus next year.

“If there’s a major downturn like we had, that’s the proper reaction,” he said. “But then you start spending within your means after that. You don’t make it permanent.”

Hudak is promising to kill Ontario’s $12.5-billion deficit and post a modest $319-million surplus in 2016-17 — one year ahead of the Liberals.

To reach that goal, the Tory leader said he’d slash government program spending by six per cent over four years, including cutting 100,000 public sector jobs.

Nurses, doctors, police and water inspectors would not be affected, he said.

The platform lays out a plan to axe 10 per cent of the civil service, eliminate “non-teaching positions” by 9,700, increase class sizes — which could affect the number of teachers on the public payroll — and reduce the number of early childhood educators in full-day kindergarten classes.

Some of the jobs will be cut by not filling positions vacated by retiring employees and cutting administrative jobs, the document says. Other jobs will be “transferred to Ontario companies” that take over services currently run by the government, such as gambling.

“Government’s payroll will also shrink as it eliminates agencies and programs that don’t offer good value for the taxpayer,” it says.

The Tories say they’d also reduce the number of ministries, with cabinet shrinking to 16 ministers from the current 27. For example, the Ministry of Northern Affairs and Mines would be merged with the Ministry of Natural Resources.

The measures will reduce the size of the public sector to 2009 levels, it says.

Currently there are 62,960 full-time employees in the Ontario Public Service, same as 2003, according to ministry officials. About 2,250 staff leave the OPS each year.

Hudak has talked about privatizing the Ontario Lottery and Gaming Corp. — which employs 6,986 people — but still regulating gambling in the province.

He would also scrap the Local Health Integration Networks, affecting about 543 full-time workers.

One union estimates the Tories would kill as many as 19,000 positions in the education sector: 9,000 teachers and 10,000 education support workers.

The Ontario Elementary Catholic Teachers’ Association calculated the number by looking at the 2012 Drummond report, which provided advice to the governing Liberals about how they could balance the books without raising taxes.

The Tories have vowed to follow though on some of the 543-page tome’s recommendations, but on an accelerated timeline of three years.

Among them are increasing class sizes to 23 in primary grades, 26 in Grades 4 to 8 and 24 in Grades 9 to 12. The Tories plan to employ one teacher for about 20 children in full-day kindergarten, rather than one teacher and one early childhood educator for 26 students.

According to Drummond, those changes would save about $660 million. The union divided that number by the ministry’s salary benchmark of $78,000 and came up with about 8,500 teachers who might be affected by the cuts.

The Tories said they’d also follow through on the recommendation to eliminate 9,700 “non-teaching” positions, which were identified as people such as administrators, educational assistants (but not early childhood educators), principals, library, guidance and office staff.

The total is 18,200, but the union said it could be higher because many of the teachers who would lose their jobs would likely be new, lower paid instructors.

The Tories say the 100,000 job cuts are necessary to put Ontario on better financially footing and help create about half a million additional jobs in the province over the next eight years.