No 'cuts' but plenty of 'fiscal challenges' in Ontario budget

When he tables his May 1 budget again this July 14 afternoon, it’ll be clear to all who hear him that Ontario Finance Minister Charles Sousa has a soothing, kind of FM, radio voice.

It has a re-assuring quality about it. And he’s going to need every octave to convince the New York bond rating agencies that he and the government are on the right track with the budget, that he can deliver on the promise to balance the province’s books by 2017-2018 and invest in a huge range of programs and projects.

In a speech last week to Toronto’s Empire Club, Sousa made it clear to his mostly business audience that the Wynne government is sticking to its spending plan and will get "back to black," as promised, by its self-imposed deadline.

Moody’s Investors Services, for one, is skeptical and recently changed its fiscal outlook for the province from "stable" to "negative," though it left the province’s critically important credit rating unchanged.

Sousa and Premier Kathleen Wynne say publicly and privately that they are determined to do what, after all, got them elected with a majority government.

The finance minister says he accepts the view of some who see Ontario’s targets as ambitious. But inside and outside the legislature, he says it is his job and, that of the government, to deliver on the plan the Liberals campaigned on.

But just as former PC leader Tim Hudak had trouble with the math of his Million Jobs Plan and its 100,000 public-sector job cuts, the Liberal math is also, in many ways, just as breathtaking.

NDP brands it 'Trojan horse budget'

Ontario’s deficit sits at $12.5 billion. The projected Liberal spending – what they call an "investment plan" – is $130.5 billion. So, to do what they said they would do and balance the books seems for many to be a difficult, if not impossible task.

Wynne says her government will not cut and slash across government and will maintain the services and programs Ontarians expect.

But the provincial Conservatives say the Liberal plan will put so-called front-line services at risk in health and education and prompt a credit rating downgrade because of what interim leader Jim Wilson calls the Liberals' "wild spending spree."

For the NDP, they're calling the government's fiscal plan a "Trojan horse budget" that has hidden cuts the Liberals aren’t talking about, including a fire sale of government assets such as the LCBO and Ontario Power Generation.

Wynne last week flatly rejected an NDP charge that, like Hudak, she’ll have to embark on 100,000 job cuts in the public sector to keep her election commitments.

Still, the premier, while verbally stepping around the word "cuts" does say there are "fiscal challenges" that have to be met. And, to most observers, that sounds a lot like code for cuts.

Teachers looking to cash in

Already Wynne has warned the province’s teachers, preparing to get to the bargaining table next month, that the cupboard is bare, and that there is no cash for wage hikes.

The teachers argue they have done their bit to help the government in the past — both politically and fiscally — and now is the time for some payback.

Wynne has a lot of political capital right now, so the teacher federations and others will have to be careful as they approach negotiations and decide just how hard their line should be with the Liberals.

There is no appetite among parents to see teachers walking a picket line again. If that were to happen, doubtless public sentiment would shift away from the teacher federations and to the government.

But that doesn’t mean that Liberals aren’t nervous about what lies ahead, because they are keenly aware of the teachers' desire to get contract improvements.

The Liberals also know they raised expectations in the election campaign and must begin to deliver on those commitments, including infrastructure and transit spending and a made-in-Ontario pension plan.

There will be much talk of that in the budget address this afternoon by the finance minister. 

While the bond rating agencies watch the province’s deficit and the promised move to balance the books, voters across the province will be watching and waiting for the words of the budget and the Liberal plan to translate into action. 

The premier has said she will "not let you down," keenly aware that failing to deliver may well be the difference between winning and losing her next provincial election.