Another Round of Punishing Austerity in Ontario
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- Published on Wednesday, 05 June 2019 10:12
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A Socialist Project e-bulletin ... No. 1833 ... May 24, 2019
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Another Round of Punishing Austerity in Ontario
Greg Albo, Bryan Evans and Carlo Fanelli
The eminent conservative scholar of public budgeting Aaron Wildavsky characterized annual budgets as a record of "victories, defeats, bargains, and compromises." The province of Ontario’s 2019 Budget, the first of the new Conservative government of Doug Ford, does indeed tell us something of this -- additional fiscal supports for business, erosion of social expenditures in general, and for the most vulnerable in particular, large expenditures on public programs needed now spread far into the future, and generous symbolic gestures for this and that political constituency. Few surprises here: after all, Ontario is long-standing as Canada’s pre-eminent fiscally conservative jurisdiction with an unbroken legacy of clientelist politics greased by the public purse... of the provincial state.
But budgetary policies also reveal deeper structural features such as the regional setting of the world market, the administrative form and policy regime of the state, and social struggles over justice and democracy. Such a shift in focus immediately registers a line of continuity extending back from the Ford government to the 1995-2003 Common Sense Revolution of the Conservative government of Mike Harris and Ernie Eves. Their market-expanding and labour-disciplining agenda established Ontario as a low-tax, low-cost regional production zone of North America dominated by an increasingly powerful financial class and a state committed to extensive growth at whatever the costs to Ontario’s ecology, First Nations, and workers. Neoliberalism, with its core tenets of a constitutionally constrained and coercive state buttressing of a ‘free market’, guided budgetary policy and all else. Despite the shift to a more ‘inclusionary’ political discourse, the Liberal governments of Dalton McGuinty and Kathleen Wynne, from 2003-18, never departed from this fiscal legacy and consolidated, for the most part, a variation of the same policy regime and development strategy.
There is no single neoliberal budgetary framework that has guided every single state, other than an underlying faith in ‘expansionary austerity’ -- fiscal restraint to encourage business investment. After the ‘shock therapy’ of the initial Harris budgets in the mid-90s, Ontario fiscal policy has been focused on budgetary balance and total debt reduction. Ontario budgetary practice has been to keep nominal growth in spending below the combined rate of growth in inflation and output to steadily reduce the size of government as a portion of the provincial economy. As a result, Ontario sits last among the provinces in per capita government expenditures and more than $2000 below the average for the rest of Canada. Since 2010, program spending in Ontario has been growing at half the rate it has been in the rest of Canada. The Ford Budget aggressively amplifies this austerity logic (and makes absurd the austerity-lite verdict of the mainstream media and business economists).