Drummond Report Sets Wrong Direction for Economic Recovery, CAW says

February 17, 2012, 2:45 PM EST


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Following the release of the long awaited Drummond Report on February 15 the CAW is reiterating that deep cuts and more private sector involvement is the wrong way to reform Ontario's Public Services.

The report was prepared at the request of the Ontario government by a commission led by former bank economist Don Drummond. It prescribes seven years of unprecedented reductions in public spending growth in tandem with a sweeping reform agenda advocating greater private sector involvement.

By Drummond's own admission, the scale and depth of the impact on health services will exceed the cutback agenda of the Harris-Eves era in reforming health, which largely focused on the hospital sector alone.

The 550-page report of the Commission on the Reform of Ontario's Public Services contains 362 recommendations for changes in government services to eliminate the province's $16 billion deficit by the target date of 2017-18 and put it on the path of long-term financial sustainability.

The Commission was mandated to ignore revenue measures such as fair taxes for corporations, including a financial (Tobin) transaction tax on banks.

"Fair and progressive revenue options including an increase in the tax rate on incomes above $500,000 could potentially raise $10 billion in needed revenues," said CAW President Ken Lewenza.

The Commission recommendations ignore the real cause of the Ontario deficit - the 2008 recession and the consensus amongst voters in Ontario in the 2011 election for modest but determined measures to reach fiscal balance, he said.

The commission devoted a considerable amount of its time, and 105 of its recommendations, to health care given that it accounts for over 40 per cent of total program spending in Ontario and $44.8 billion in expenditures in 2010-11.

The recession, spurred by the financial market collapse, caused the provincial deficit, after years of surplus. Renewing economic growth and especially job creation is key to eliminating the provincial deficit, as is the need to reconsider further shrinking revenues through corporate tax cuts.

"Hastily eliminating the provincial deficit through drastic cuts to public spending and job elimination will only deepen and extend the recession," said CAW Health Care Director Katha Fortier. "The province needs a balanced and equitable approach to restoring the match between revenue and spending," she said.

Ontarians voted in the last election for a measured and controlled approach to deficit reduction by restraining program spending to below inflation and population growth.

There is no public support six months later for taking harsher or more draconian measures, especially without full opportunity for the public to engage and debate the measures being considered by the government, Lewenza said.

The CAW represents over 26,000 public sector workers in Ontario including those in health, post-secondary education, municipal utilities and the urban transit sector.

A written submission by CAW urges the Commission to consider suggestions for controlling costs associated with delivery of public services, but not by handing more responsibility and control to the private sector.

The recent scandal at the provincial flight paramedic service ORNGE demonstrates the failure of permitting public services to be operated as private corporations.

Lewenza also stressed that the CAW is calling for the provincial and federal governments to use the same determination as in the case of the Drummond Commission to set up a new commission to deal specifically with the creation of a good jobs strategy.

The CAW submission to the Drummond Commission is available at http://www.caw.ca/assets/pdf/527-Drummond_Commission_doc.pdf  

CAW Economist Jim Stanford offers ten macroeconomic factoids to keep in mind to counter the claim that Ontario just can't afford its already-stretched network of public services in "Ten Points on Recession, Deficits, and Austerity in Ontario" on the CCPA's blog, Behind the Numbers at http://www.policyalternatives.ca/newsroom/updates/drummond-commission-report-countering-cutbacks-ontario  

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