CLAC Disappointed with Ontario Government’s Economic Update

DATE: November 19, 2010

Mississauga, ON—CLAC is disappointed with the Ontario government’s latest statement on the state of province’s economic situation. “Working families were looking forward to better news about Ontario’s future but instead were presented with information about renewable energy, pension reform, and the sale of 20 percent of the government’s stake in General Motors,” says Hank Beekhuis, CLAC’s Ontario director. “Ontario families were expecting help with increasing costs due to electricity hikes and the harmonized sales tax and instead heard about the Ontario Clean Energy Benefit (OCEB).”

The OCEB was introduced yesterday in the legislature and provides a 10 percent rebate to electricity ratepayers on their bills for the next five years. This benefit comes on the heels of the announcement that electricity rates will rise an estimated 46 percent over the next five years.

A very short statement was made by Finance Minister Dwight Duncan about the two year wage freeze for unionized public sector workers. There is no change to the government’s position to not fund any wage increases for two years. Duncan admitted that only half of all settled collective agreements have complied with the no wage increase edict.

“Our members working in the public sector wanted more direction from the government on the two year wage freeze,” says Beekhuis. “How is it fair that some public employees will get wage increases and others will not? We need some real leadership on this issue and we’re not seeing it.”

Although it is encouraging to see that 180,000 jobs have returned to the economy since the lows of 2008, the fiscal picture in Ontario is still not rosy. The projected deficit for next year is $18.7 billion, increasing the province’s debt to $220 billion.

The annual interest payments on this debt ($9.7 billion) will be about the same as the annual budget for the Ministry of Community and Social Services. Spending is increasing by 12 percent or $10.5 billion during a time when we expect cutbacks.

“The McGuinty government is using the OCEB as shush money to electricity ratepayers outraged over recent rate hikes,” says Beekhuis. “Instead, it should use the $1.1 billion this program will cost to fund the meagre wage increases of nursing home employees struggling to make ends meet.”