Dear Premier Wynne,
I am writing on behalf of the Canadian Council of Chief Executives (CCCE) to offer our congratulations on your victory in the recent provincial election.
You led the minority Liberal government deftly. As you move to implement your party’s platform with the benefit of a decisive majority, critical actions can no longer be delayed to secure the long-term fiscal health of Ontario.
Three years ago, I recommended to Ontario’s then-Finance Minister that he set hard targets to reduce the $237 billion provincial debt. Since then the net debt has increased by more than $30 billion, on its way to an expected $305 billion by 2015-2016. The fault lies with no single government or party; indeed, Ontario has run only six surpluses in the past 20 years. The fact remains, however, that the current situation is not sustainable and leaves the province vulnerable to another economic downturn.
Next year, Ontario’s net debt is projected to hit 41 per cent of provincial GDP, more than 50 per cent higher than before the recent recession. Even with historically low interest rates, the cost of servicing the debt now approaches $11 billion a year. Any downgrading of Ontario’s debt rating would push borrowing costs even higher.
In our view, the single most important thing you can do to secure Ontario’s future is to stay true to your commitment to eliminate the deficit by 2017-18.
Fortunately, the 2012 report of the Commission on the Reform of Ontario’s Public Services offers many relevant and as-yet unimplemented proposals to improve the effectiveness and efficiency with which public services are delivered. We strongly recommend that you embrace the report’s agenda for fiscal reform. In the words of Don Drummond, the Commission’s chair: “Decisive, firm and early action is required to get off this slippery, and ultimately destructive, slope.”
Tackling deficits is never easy, as I know from my time in public office. It is essential to set clear targets and stick to them, ensuring that every department and agency of government is subject to rigorous spending controls and regular reviews. To meet new and growing needs in areas such as health care and education, your government must be willing to make tough choices, and to pull the plug on programs that are not working or have outlived their usefulness. Services that can be delivered effectively by, or in partnership with, the private sector should be transferred to it.
At the same time, you need a strategy for growth. Your planned Jobs and Prosperity Fund will improve Ontario’s ability to attract significant business investment. Accelerated efforts to reduce the regulatory burden and an unwavering commitment to competitive business tax rates can further position the province as a magnet for private-sector growth and job creation.
Premier, in recent months you have spoken frequently about another significant challenge: the need to encourage Canadians to save more for retirement. Your plan to introduce legislation enabling Pooled Registered Pension Plans is an important step. However, I urge you to consult widely with Ontarians and other stakeholders before moving forward with a separate, mandatory Ontario Retirement Pension Plan. Workers and citizens already have access to a broad array of savings and pension instruments, including the Canada Pension Plan, employer-sponsored pension plans, Registered Retirement Savings Plans and Tax-Free Savings Accounts. Bearing in mind that actions taken now will not benefit retirees for decades to come, it surely makes sense to continue to strive for a national solution that works for all Canadians, rather than a patchwork of new and potentially costly provincial plans.
In closing, Premier, I want to assure you that Canada’s business leaders share your goal of a healthy and growing economy that offers expanded opportunities for all citizens. Thank you for your service to the province and for your commitment to a better future for Ontario.
The Honourable John Manley
February 12, 2024
February 5, 2024