The Fraser Institute: Restoring Fiscal Sanity to Ontario Requires Reform of Government Programs, $10.8 Billion Spending Cut
(firmenpresse) - TORONTO, ONTARIO -- (Marketwire) -- 03/19/12 -- The Ontario government's plan to balance its budget in six years will leave the province with a debt of $411 billion, stifle its economy, and penalize the province's young. But the crisis can be avoided if Ontario's upcoming budget includes much-needed reforms to government programs and a significant reduction in spending, concludes a series of new articles published by the Fraser Institute, Canada's leading public policy research organization.
"During the 1990s, federal and provincial governments of all political stripes reduced spending and reformed government programs to avoid a looming debt crisis. Dalton McGuinty's government now faces a similar challenge," said Niels Veldhuis, Fraser Institute vice-president of Canadian policy research and co-editor of .
"Ontario needs a credible plan to address its $16 billion deficit. In this collection of articles, our authors present reforms to government programs that would enable Ontario to cut $10.8 billion in spending and eliminate its deficit in two years."
Avoiding a Crisis: Fixing Ontario's Deficit is a series of articles by 11 authors published this week in Fraser Forum, the Institute's flagship magazine on public policy. The full publication as well as individual articles can be found at .
The Fraser Institute authors present a more aggressive deficit reduction plan than that contained in the February report from the Commission on Reforming Ontario's Public Services, headed by noted economist Don Drummond.
"The Commission's report contains many worthwhile recommendations but it was partly restricted by the government's mandate, making many of its proposed reforms too timid. And by keeping the six-year time frame for reducing the deficit, the plan increases the overall debt while running the risk of unanticipated negative economic shocks. By contrast, our plan will set the stage for Ontario's economic recovery in a much shorter time frame," Veldhuis said.
Charles Lammam, Fraser Institute associate director of tax and budgetary policies, emphasizes that the Ontario government's current deficit reduction plan is not credible since it relies on overly-optimistic revenue projections and a questionable commitment to slowing the growth in government spending.
"Canadian governments have adopted similar approaches in the past and failed to balance their budgets. To successfully eliminate the deficit, history tells us that Ontario needs to move swiftly and aggressively."
Lammam recommends Ontario enact a two-year deficit elimination plan that would involve cutting spending by $10.8 billion, or $5.4 billion per year - less than five per cent per year - over two years. Any future spending increases must be kept to the rate of revenue growth or population growth plus inflation (whichever is less). This would decrease Ontario's projected debt by approximately $128 billion over the next six years, resulting in substantially lower annual interest costs.
Other recommendations from Fraser Institute authors touch on reforming a variety of government programs in ways that would improve public services and produce annual cost savings. Among their recommendations are to:
"The current Ontario government's fiscal record is quite poor. Ontario families need and deserve a plan to return fiscal sanity to the province. With these recommendations, we're proposing bold reforms that will avoid a debt crisis in Ontario and provide taxpayers with better value for their hard-earned money," Veldhuis said.
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The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of 80 think-tanks. Its mission is to measure, study, and communicate the impact of competitive markets and government intervention on the welfare of individuals. To protect the Institute's independence, it does not accept grants from governments or contracts for research. Visit .
Contacts:
The Fraser Institute
Niels Veldhuis, Vice-President
Canadian Policy Research
(604) 714-4546
Twitter: (at)NielsVeldhuis
The Fraser Institute
Charles Lammam, Associate Director
Fraser Institute Centre for Tax and Budgetary Policies
(604) 714-4544
Twitter: (at)CharlesLammam
The Fraser Institute
Dean Pelkey
Director of Communications
(604) 714-4582
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Datum: 19.03.2012 - 05:32 Uhr
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