Liberal Government rejects Debt Repayment Resolution

NEWS RELEASE
Ted Arnott, MPP
Wellington – Halton Hills
FOR IMMEDIATE RELEASE
April 20, 2012

Liberal Government rejects Debt Repayment Resolution
(Wellington-Halton Hills) – Yesterday, Liberal MPPs in the Ontario Legislature voted to defeat a
resolution calling upon Government to commit itself to a plan to begin paying down the provincial debt
once the budget is balanced.

The resolution, brought forward by Wellington-Halton Hills MPP Ted Arnott, was debated during Private
Member’s Business on April 19. Mr. Arnott’s resolution read:

That in the opinion of this House, after the provincial budget is balanced, the Government should
begin paying down the provincial debt by creating a new line item in the budget, committing to
making a payment on the principal of the provincial debt of at least 2.5 percent of the program
spending of that fiscal year.

While the resolution was supported by Progressive Conservative and NDP MPPs, the Liberals voted
against the resolution.

“I’m extremely disappointed that the McGuinty Government continues to refuse to acknowledge the
serious consequences of our growing provincial debt,” said Mr. Arnott. “This is a Government that
will soon have doubled the provincial debt since they took office. It will be our children and our
grandchildren who will pay the price because this Government insists on spending money that it
doesn’t have, with no plan to pay it back.”

This is the second time the Liberal Government has voted down a resolution from Mr. Arnott, calling
on it to commit to a plan to repay the debt. In 2003, the McGuinty Government voted down his
resolution calling for a 25 year debt retirement plan.

During his speech in the Legislature, Mr. Arnott recounted the words of one constituent: “…a man
I’ve known a long time, who I like and respect, came up to me. He was very angry, even livid. He
said to me, ‘You’ve got to go down there and tell them that they’re taking my grandchildren to the
edge of the cliff, and they’re pushing them off.’”

The Government will spend $10.6 billion this year alone in interest on the debt. This represents the
third highest provincial expenditure, behind only health care and education.

“This year, they will pay more in interest on the debt than they will spend on post-secondary
education, more than they’ll spend on transportation infrastructure and more than they will spend on
economic development, for example,” Mr. Arnott noted. “This is at a time of historically low interest
rates.”

According to the Auditor General’s most recent report, at Ontario’s current debt level, the province
will pay an additional $500 million in interest for each 1% rise in interest rates.

However, despite the setback, Mr. Arnott is not giving up.
“I’ve been raising the alarm bell on the growing size of the debt since I was first elected in 1990,”
Mr. Arnott said afterwards. “I believe that this is a vitally important issue and I will continue to fight to
ensure that our children and grandchildren are not saddled with a mountain of debt, because of this
Government’s inability to live within its means.”

(Attached: Hansard record of Ted Arnott’s speech in the Ontario Legislature, April 19, 2012.)

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Ted Arnott, MPP
Phone: 416-325-3880
Email: ted.arnott@pc.ola.org

Ontario Hansard – April 19, 2012

Mr. Ted Arnott: This past Tuesday’s Globe and Mail contained an article by Adam Radwanski which
was noteworthy. The title of the article was, “Ontario Set for a Top-to-Bottom Review.” The subtitle
informed readers that the Minister of Finance was about to unleash productivity teams in the hopes of
meeting deficit reduction targets. A more apt but somewhat less flattering title for the article might have
been, “Conversion on the Road to Damascus.” The only problem with this metaphor is that Paul’s
conversion was preordained, and the minister’s conversion is, well, politics.
According to the article, it would seem that our friend the Minister of Finance has finally come to the
conclusion and is finally prepared to publicly acknowledge that the government of Ontario has a spending
problem.
Let’s think back a while. Remember back to the fall of 2003, eight and a half years ago, in the early, heady
days of the McGuinty government just after they were elected. Their members were filled with
enthusiasm, but they started off whining and moaning about the deficit they claimed they had inherited,
neglecting to mention that they had assumed office in the middle of a fiscal year, that they could have
tried to reduce spending in the second half of that year-but instead they ramped it up, consistent with what
was to come-and that their so-called Auditor General’s report was in fact the report of a hired consultant
who gave them the report that they had paid him to write. Let’s remember what they did.
Our party, in our last budget in 2003, projected a balanced budget for that fiscal year. We knew it
wouldn’t be easy-it never is-but we were going to try. Then came the SARS outbreak, which hurt our
tourism industry. Then came mad cow disease, which hurt our agriculture industry. Then came the hydro
blackout, which hurt our manufacturing industry. All of these unforeseen crises were addressed one by
one by our government. None had originated in Ontario-no one in Ontario was at fault-but we faced them
head on. Leadership was necessary, and the Progressive Conservative government provided it. However,
there was an economic cost for each crisis, which impacted our revenues and obviously the budgetary
outlook that year.
The election date was fixed. It was to be October 2003, ironically about halfway through the fiscal year.
Now, if we had been re-elected, no doubt we would have sought savings in-year and made a genuine
effort to balance the budget in the second half of the fiscal year. But we were not re-elected, and the
Liberals took office. They decided to misuse the professional credibility of Erik Peters, who was by then retired as an Auditor
General and was a paid consultant, to validate their shell game. So they ramped up spending in the second
half of the fiscal year, pretended to throw up their hands and blamed the deficit on the outgoing
government. Mr. Speaker, was it a half-truth or was it an outright fabrication of the truth? I’ve drawn my
own conclusion. But it’s interesting to note that the deficit that they run today is almost three times the
number they whined about in 2003, just as it’s three times the deficits of the other provinces in Canada
combined.
The fact is, they were ready to come into this House and spend. Invest in public services, they said-health,
education, yes, which we all support-but also every other spending idea that they could think of. Year
after year, under the McGuinty Liberals, overall provincial spending went up 6% to 8%, while inflation
was about 2% and economic growth stalled and then receded. And the spending continued; indeed, it
accelerated.
When the word got out that the McGuinty Liberals had opened up the vault and they were handing out the
taxpayers’ money with abandon, not surprisingly, the interest groups lined up. Spend, spend, spend and
then spend some more, and ideally have the local MPP-or the closest local Liberal MPP, I should say,
geographically-deliver the cheque in person, with the requisite photo op and with the nice speech, all to
take credit. If anyone in the government noticed that the vault was starting to empty out, nobody had the
nerve to mention it to the Minister of Finance or the Premier. They had a formula, they had a template for
photo-op events, and they raised it to an art form through sheer repetition.
Politically, it served them well in the short term, in that they were re-elected four years later, in 2007, but
in that the government of Ontario had totally lost control of its overall spending, the people of Ontario
began to lose. This is where we’re at today.
I need to go back again, because no government spending crisis emerges overnight. It develops over the
years, as fiscal discipline is first ignored and then forgotten altogether and irresponsible patterns of money
mismanagement become the norm.
In my very first speech in this place, more than 21 years ago, I wrote my maiden speech and said these
words in this House: “We in Wellington understand the economic value of hard work and the social value
of personal responsibility. From this understanding stems a serious concern when our government refuses
to live within its means, when our government grows until it begins to inhibit overall economic growth,
when even excessive taxation does not prevent the expansion of our government debt.”
In those days, I was sitting over there, our caucus was known in the House as the third party, and Bob Rae
was the Premier of Ontario. Fiscal responsibility was not really something that initially troubled Premier
Rae, at least not until he was faced with the news, around 1993, that the province would soon be bankrupt,
which led to the social contract, which infuriated his supporters, which directly contributed to the NDP’s
defeat in 1995. But all this is ancient history, before Mr. Rae attempted to reinvent himself, this time as
the interim and now aspiring permanent leader of the Liberal Party of Canada. The fact remains that the
provincial debt essentially doubled during his five years as Premier, from 1990 to 1995.
Dalton McGuinty isn’t far behind. After just over eight years as Premier, he’s on track to soon double the
debt yet again. Last week, I had the chance to speak to a local service club in my riding. I was asked to
speak about the budget, and so naturally, I talked about the deficit and the debt, since the red ink of this
government is their signature legacy. I told them the unvarnished facts. Despite the government’s rhetoric
that this is an austerity budget, in fact, there is very little austerity in it. Spending is actually up over last
year-up by almost $2 billion, from $124.6 billion to $126.4 billion. Last year’s deficit came in at $15.3
billion. This so-called austerity budget projects a deficit of $15.2 billion. Over the past year, the overall provincial debt will rise from $237.6 billion to a staggering $260.4 billion. The net per capita debt, in
effect the amount of the provincial debt that each Ontarian owes, will rise from $17,766 last year to
$19,243 this year. It was $11,339 when the McGuinty government came to power in 2003. This
government will have increased that number by almost $8,000 for each and every Ontarian, in just nine
years. This year alone, they will pay $10.6 billion in interest to service the debt. This does not even begin
to pay down one penny of the principal of that debt. The $10.6 billion that they will pay to service the
debt this year is the third-highest provincial expenditure in the budget, behind only health care and
education. This year, they will pay more in interest on the debt than they will spend on post-secondary
education, more than they’ll spend on transportation infrastructure and more than they will spend on
economic development, for example.
This is at a time of historically low interest rates. According to the Auditor General’s report, page 29, a
1% increase in interest rates would result in an additional $500 million in interest each year at our current
debt level.
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After I’d finished going through some of these numbers with the service club, a man I’d known for a long
time, who I like and respect, came up to me. He was angry-even livid. He said to me, “You’ve got to go
down there and tell them that they’re taking my grandchildren to the edge of a cliff, and they’re pushing
them off.”
My resolution is for his grandchildren, for all of our children and grandchildren, and for anyone else who
cares about Ontario’s long-term future. It is a modest proposal, but it speaks to a larger principle that has
so often been overlooked, the old-fashioned value that our parents’ generation taught us but so many have
forgotten: You shouldn’t spend what you don’t have. You need to live within your means. It recognizes
that we simply should not continue to rack up the debt and leave the bill for our children and
grandchildren to pay.
My resolution asks that, when the budget is finally balanced, the government commit to making debt
repayment a line item in the budget. It suggests that we should commit to a goal of making a significant
payment on the principal amount of debt, not just the interest. It is endorsed by the Ontario Chamber of
Commerce and it has also been endorsed by the Canadian Taxpayers Federation.
Mr. Speaker, my constituents in Wellington-Halton Hills believe that with the right leadership and the
right policies, Ontario’s best days are yet to come-the promise of the future. But in the past few years, we
have seen Ontario, once the economic engine of Canada, become a have-not province. We have seen the
provincial debt climb higher and higher each year. This is why I introduced this resolution today. No one
on this side of House believes the McGuinty government will ever balance the budget. They simply lack
the will and they lack the wherewithal to get the job done.
In 2003, just after the McGuinty Liberals had been elected, I introduced a motion calling on the
government to commit itself to a long-term debt repayment plan. Not surprisingly, in light of the spending
spree that they planned and was to come, the Liberal members voted it down.
Ultimately the task of balancing the budget and beginning to pay down the debt will most likely fall to a
successor government, after a provincial election, when we have a government that’s serious about
balancing the books; when we have a government that offers more than just rhetoric about getting our
spending under control. This resolution makes the point that we need to start making payments, however
modest, on the principal of our debt and begin to strengthen our province’s balance sheet. It’s the right
thing to do. It’s the responsible thing to do. We have a duty to our children and our grandchildren. Let us pass this motion, and let it be said by future generations that on this day, in this place, the
Legislature embraced the promise of the future.
I ask all members to support my resolution today.