Ontario Liberals put off making the tough decisions in Budget 2013

You might want to characterize the Ontario budget as short term gain for long term pain.

The gain is for the Premier Kathleen Wynne — the government's spending plan might just win the support of the NDP and thereby keep the Liberal minority alive for a few more months.

[ Related: Ontario Liberals release NDP-friendly budget, but will Andrea Horwath take the bait? ]

The pain is for all Ontarions.

Canada's most populated province is in dire financial straights.

While the Liberals say they intend to balance the books by 2017-18, the budget, introduced on Thursday, increases government spending by 3 per cent, increases the deficit by about $2 billion and will increase the province's debt to over $270 billion.

In a 2012 report commissioned by the Liberals, former TD Bank chief economist Don Drummond made 362 recommendations to balance the books by 2017-18. Drummond cautioned against dawdling and recommended that the government limit spending increases to 0.8 per cent per year.

As explained by the Fraser Institute's Niels Veldhuis and Jason Clemens, the Liberals are simply deferring the tough medicine that the province needs.

"The Liberals plan to increase program spending by 3 per cent this year (2013-14). However, in last year’s budget, they promised to hold spending growth to 1.1 per cent for 2013-14. Put differently, Minister Sousa and his colleagues have nearly tripled the growth in 2013-14 spending from last year’s plan to the one they put forth this year," the duo wrote for the Financial Post.

"Unfortunately for Ontarians, the “restraint” is delayed until next year and the following, with increases of 1.1 per cent and 0.4 per cent respectively. Clearly, the Liberals are kicking the can down the road and when they get there, they simply kick it further."

Candice Malcom of the Canadian Taxpayers Federation echoed that sentiment.

"This budget fails to rein in spending in any meaningful way," Malcom, the CTF’s Ontario Director said in a press release.

"Ontario needs some tough medicine, and instead, this government caved to NDP demands with targeted hand-outs to special interests and continued growth in both spending and borrowing."

Malcolm commends the Wynne government for so far delivering on 60 per cent of the Drummond report but says that, in terms of spending, the province is "heading in the wrong direction."

[ Related: Ontario plan for ‘high-occupancy toll roads’ could gain traction ]

In 2009/10, Ontario joined the ranks of the "have-not" provinces for the first time and is now the second-largest recipient of equalization payments in the country with $2.2-billion set to flow into its coffers this year.

And, according to data collated by CBC News, Ontario has one of the worst debt-to-GDP ratios in the country. It also has the second highest per-capita debt burden — each Ontarian now owes over $18,000. In fact, Ontario's debt situation is worse than that of the State of California.

This budget does little to address those challenges.

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