Liberal cost control plan too optimistic, Ontario auditor says
Auditor General of Ontario, Jim McCarter, pictured in this file photo, says the Liberal government’s plan to keep costs in line is far too “optimistic” given its past spending habits.
TARA WALTON/TORONTO STARThe watchdog who keeps an eye on Ontario’s books warned Tuesday the Liberal government’s plan to keep costs in line is far too “optimistic” given its past spending habits.
Finance Minister Dwight Duncan responded to the cautionary pre-election report from Auditor General James McCarter by acknowledging his plan is “aggressive” and maintained he can still balance the budget by 2018.
But McCarter told reporters the government’s plan should be taken with “a moderately big grain of salt” by citizens.
The auditor’s report is certain to spur debate as all parties at Queen’s Park jockey for advantage as the Oct. 6 vote approaches, with the plain-talking McCarter raising an eyebrow over Duncan’s predictions, taking aim at mixed results from a voluntary public sector wage freeze and rising health care costs due to an aging population.
“The government says it will spend an average of just 1.8 per cent more in each of the next three years, even though its annual spending growth over the past eight years, after adjusting for large one-time expenses, averaged almost 7 per cent,” he said.
“That’s a pretty big decrease.”
Ontario law requires assumptions be made on a “cautious” basis, McCarter added, noting many arbitrators have ignored Duncan’s push for two years of wage freezes in the public sector.
Most arbitrators have ignored the Liberals’ call for a two-year wage freeze for the broader public sector because there is no legislation to back it up, awarding wage increases to union members.
“We believe it is optimistic to assume that there will be no net compensation increases in the public sector and broader public sector in the next two years,” McCarter wrote in the 37-page report.
And with health care eating up 42 per cent of the government’s spending on programs, he casts doubt on the Liberals’ prediction that costs will rise at half the previous rate despite an aging population.
“Given that many of the assumptions underlying the expense projections are optimistic rather than cautious, there is a heightened risk that actual expenses will be higher than estimated,” McCarter wrote, adding that the government was cautious in estimating its revenues.
He did not pass judgment on the Progressive Conservative spending plans — which include more rosy revenue estimates than the Liberal ones, along with promises to match Liberal spending increases on health care and education while making cuts elsewhere.
Tory MPP Lisa MacLeod said the government’s financial plan has been “indicted” by the auditor’s red flags but her party will go “full steam ahead” on its platform, called Changebook.
McCarter said voters will have to make their own decisions given that some of the Tory numbers are based on “underlying assumptions” in the Liberal financial plan.
New Democrats have not yet released a full platform or a financial costing of their promises.
The auditor’s report was prepared under a law passed by the Liberals requiring the auditor to verify provincial finances before elections, and was spurred by the Liberal discovery of a $5.6 billion deficit when they took power from the Progressive Conservatives in 2003.
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