Denley: Efficiency alone won’t balance Ontario’s budget
Ontario Finance Minister Vic Fedeli (yellow tie) and President of the Treasury Board Peter Bethlenfalvy. Balancing Ontario’s budget will not be an easy task. Ernest Doroszuk / Ernest Doroszuk/Toronto Sun/Postmedia
Ontario Treasury Board President Peter Bethlenfalvy is the guy with the unenviable task of trying to make the provincial government more efficient. His results will go a long way towards determining the success, or failure, of the Ford government’s attempt to eliminate a $15-billion deficit.
That’s a subject we will hear more about later this week, when Finance Minister Vic Fedeli releases his first review of the province’s financial situation.
While Bethlenfalvy will focus more narrowly on government operations, it’s clear that he and Fedeli will be the twin prophets of doom, driving home the message that deficits and burgeoning debt matter. That would seem self-evident to fiscal conservatives and people with a basic grasp of arithmetic, but any substantive effort to balance the books will spark predictable outrage from the opposition parties and public sector unions.
Deficit slaying has been a tough sell in Ontario, partly because the accumulated debt number is difficult to relate to real life. It currently stands at $338 billion. That sounds like a lot, and it is, but it’s tough for the average person to know what to compare it to. The debt is sometimes described as being about $23,000 per person, which could easily make people think, “OK, less than I owe on my car, and no one is sending me a bill.”
Maybe the timing is right. An Ipsos poll in May showed a majority of Ontarians are worried about the rising debt and deficit. The poll found that 71 per cent of respondents would prefer spending cuts to more deficits, and that opinion held for a majority of supporters of all three major parties. That, of course, was an opinion offered without knowing anything specific that would be cut.
So, can Bethlenfalvy actually make government more efficient? He brings a strong résumé to the task, having held several senior financial management positions including being co-president of one of the major bond-rating services that assesses how the Ontario government is doing.
One of his big challenges will be limited leverage. Only about 13 per cent of public sector employees work directly for government, and the cost of that public administration has been flat for 15 years. The big growth in spending has been in health and education, areas that are popular and more difficult to control.
Bethlenfalvy is also a business guy coming into government and saying he will make government operate more like business. That will create a certain amount of skepticism, given that business is not nearly as efficient as legend would have it.
The early example of results that Bethlenfalvy likes to cite does not encourage confidence. He has ordered his department to remove land lines and drastically reduce the use of paper. The annual saving is $26,000, which doesn’t look too robust when compared to the $6 billion in efficiencies Premier Doug Ford talked about during the election campaign.
Bethlenfalvy says the right things about the big points, though, especially in regard to changing the way government assesses what it does. For quite a long time, volume of spending, not results, has been the primary way government in Ontario kept score. Bethlenfalvy wants to reverse that, and is working on specific, measurable goals for each ministry.
In a recent speech, Bethlenfalvy said “Efficiency is not a goal in and of itself. Efficiency is the means. The goal is structural balance and a more sustainable government.” It’s his best point, and the easiest to understand. When revenue and expenses are in balance, services are sustainable. When services are paid for with borrowed money, cuts become inevitable and the longer we delay, the worse the problem gets.
Bringing the budget back into balance is a big challenge and Bethlenfalvy has one of the toughest assignments. Unlike some former Liberal ministers, Bethlenfalvy and Fedeli believe balancing the budget matters. That doesn’t make the hill any less steep, but it’s a start.
Randall Denley is an Ottawa commentator and former Ontario PC candidate. Contact him at email@example.com