Published in the Telegraph-Journal 18th February 2012
Released yesterday amid media fanfare more commonly associated with the announcements of NHL draft picks, the Drummond Report is a weighty document. At five hundred and sixty-two pages stretched tightly across twenty chapters and with almost four hundred recommendations, the report may not quite rival Tolstoy’s War and Peace in scope and scale, but Path to Sustainability and Excellence will probably be read the same way. Few will read it in its entirety while many more will begin with good intentions before settling for the executive summary.
Ontario established the Commission on the Reform of Ontario’s Public Services in 2011 to advise the government on how to return to a balanced budget no later than 2017-18. Its other mandate was to determine how government could get more value for taxpayers’ money in every area of its expenditures, from health care and education to back-office management to intergovernmental relations. The Commission concluded early in its mandate that the deficit was on track to rise to more than $30-billion by 2017-18 from $14-billion in 2010-11.
The report recommends a degree of spending restraint that is “almost certainly unprecedented in Canadian post-war history.” Annual growth in program spending would be held to only 0.8 per cent over a seven-year period. The report additionally recommends limiting health care to increases of 2.5 per cent a year, post-secondary education to 1.5 per cent, education to 1 per cent and social services to 0.5 per cent; everything else would be reduced by 2.4 per cent a year.
Two assumptions underpin the report. First, in Ontario, economic growth cannot provide the usual revenue leverage this time, either in the next few years or further down the road. The report concluded that, while everything needed to be done to boost the economy, Ontario could not depend on the type of growth to which it had become accustomed. Second, the government needed to focus on reforming and transforming programs, rather than relying on simple cost-cutting measures.
The report adamantly opposes the indiscriminate slashing of the public service. Don Drummond, the Commission’s chair sets a reformist tone in the report when stating that, “affordability and excellence of public services are not incompatible; they can be reconciled by delivering all programs more efficiently. The silos of the health system can be better integrated to save money and ensure people don’t fall between the cracks. Universities and colleges could deliver better value for the money through greater differentiation and reducing their high, internal rates of cost escalation. Impressive results have been achieved in recent years in Ontario’s education system, but non-core costs have risen sharply and must be reined in.”
Perhaps surprisingly, the Commission does not examine some remedies to the fiscal challenge to the same extent. While the question of tax increases is quickly dismissed, the potential for revenue generation and government transformation through key asset sales is underplayed.
If the Drummond Report has accurately framed one important problem of government, can it be used as a model for other provinces that are similarly being squeezed between fiscal realities and flagging growth? As in Ontario, New Brunswick cannot simply adjust its fiscal parameters in the short term to eliminate a deficit caused by the recession and a growth shortfall. Although restraint measures that have already been undertaken represent a beginning, New Brunswick’s provincial deficit will continue to rise in an environment of modest economic growth. Although in New Brunswick the fiscal challenges exist on a smaller scale than in Ontario, its economic growth problems arguably are even more severe. The Drummond Report’s conclusion is that Ontario’s fiscal response must not only be strong and sustained over a much longer period, ultimately it must reform the way government delivers virtually every service. Surely this conclusion could be applied in equal measure in this province.