We’ll Deal With It… Tomorrow
Just yesterday, Ontario’s Financial Accountability Office (FAO) released another report detailing how Ontario’s current fiscal policy is unsustainable and that the government is unprepared to face the costs associated with an aging population. There’s really nothing new here. We’ve been saying it for years, opposition parties have been saying it for years, the Big Three (Standard & Poor’s, Moody’s and Fitch) have consistently degraded Ontario’s credit rating and even the current government has found it crucial to give the impression that they have balanced the budget this year. Why are we still surprised then?
What is the most shocking about this latest report is it proves just how good politicians are at identifying an issue, but how clueless they are when comes the time to find solutions. For well-over a decade now, we’ve known that Canada has an aging population. We’ve known that there would be fiscal challenges associated with it. As more and more Canadians retire, we’re going to have more people needing more expensive medical care and senior benefits programs, and a smaller working population to support those services. We’ve known all of that for a long time. By now, we’d think we would have figured out a plan to deal with that or, at the very least, started putting money aside for when that day comes. If you expect to get a pay cut, the natural thing to do is to try and put money aside, and reduces your expenses or find new revenue sources.
For politicians, though, even those who campaigned on it across the country or those who said they wanted to protect our nation’s future and ensure our prosperity, it seems as though that message never got across. Ontario’s Finance Minister, Charles Sousa, gave us one of the best possible examples in his reaction to this report. Reacting to a report that showed Ontario either needs more revenues to cover its program expenditures, or needs to cut spending, the Finance Minister said he found the cure: increase CPP benefits and federal healthcare expenditure. He seems oblivious as to the fact that what’s needed is not higher spending at any level of government, but rather restrained spending.
While this report is specifically about Ontario, the situation is the same throughout the country. A recent report from the Canadian Taxpayers Federation showed all but two provinces had not even begun to look at the problem. Only Quebec and Nova Scotia had started looking into it and compiling reports. At the Federal level, such reports exist, but given the current government’s propensity to frivolous spending, it seems as though they’re having very little impact in the halls of the Department of Finance. For politicians, there is currently no incentive to be fiscally responsible. They’ve realized the best way to win elections is short-term, four-year thinking. In those four years, they can rack up debt faster than a drunken sailor, make ludicrously large and frivolous spending announcements, yet still get re-elected as numerous voters feel like they’re getting more bang for their buck, while all they’re really getting is an ever-increasing tab to pay for interests on government debt year after year.
There needs to be a change in the way we address public spending. To paraphrase Margaret Thatcher, there is no such thing as government money, there is only taxpayers’ money… and debt or, as I like to call it, future taxpayers’ money. There is no such thing as a free government service, only a service we’re paying for through taxes either today or tomorrow. Only when politicians see this shift in voters’ perception, will things begin to change for the better and tax & spend be a thing of the past and long-term, fiscally responsible planning be the new rule. In the meantime, politicians just keep putting off though decisions and it is young Canadians who are paying for it.