How COVID-19 taught the Tories to love government spending

OPINION: The PCs aren’t proposing anything that could be called an “austerity” budget — that’s a pretty substantial departure from what they were calling for when they were first elected
By John Michael McGrath - Published on Mar 24, 2021
Premier Doug Ford prepares to hold his daily briefing at Rouge Valley Hospital in Toronto on March 22, 2021. (Frank Gunn/CP)

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It’s nearly a cosmic certainty that, if COVID-19 hadn’t struck Ontario, the Tories would still be doing their best to balance the budget sometime not very long after the 2022 election. But the pandemic has blown those plans entirely out of the water, and so both last year and this one have seen massive budget deficits. The budget presented Wednesday by Finance Minister Peter Bethlenfalvy projects deficits into what counts as the future for political purposes: if things go according to the Progressive Conservative government’s plan, Ontario won’t see a budget surplus until 2029-30, at which point it could very well be someone else’s problem (or accomplishment).

There are innumerable small details in the budget document, but the big-picture stuff is contained in just two pages: pages seven and 11, which lay out the taxing and spending priorities from now until 2029. Fate could make all of this educated guesswork look silly not very long from now, but for the time being, it’s a statement of the government’s intentions. And its intentions are far more expansive than what it proposed just two years ago. A government that once proposed (in the 2019 budget, or “a million years ago” as we now call it) to keep program spending growth to 1 per cent per year is now proposing to expand spending by at least double that amount.

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That’s admittedly a dramatic way to describe the difference between 1 and 2 per cent, but over a decade, it adds up: in health care, the Tories plan to increase spending from 63.7 billion in 2019 to 82 billion. That’s real money, as they say, committed to hospitals and long-term care and mental health. And, in terms of percentage growth, that’s not even the largest increase on the books: the catch-all category of “other programs” — which includes things like transit and highways and broadband infrastructure — is projected to grow at more than 3 per cent annually.

The one notable sector that hasn’t been invited to the spending party is education: over a decade, the province’s schools and teachers are projected to see an increase of less than $2 billion overall (from $30.2 billion to $31.9 billion). That’s an increase of half of 1 percent — relatively speaking, one-fifth as much growth as the health-care sector and only one-sixth as much as the infrastructure and assorted goodies in the “other projects” category.

The Tories will have to explain to voters why they’re choosing to be relatively stingy with the education sector at a time when the safety and hygiene of provincial schools is a top-of-mind concern for many parents; indeed, the opposition parties unanimously decried what they described as the cuts in this year’s spending relative to last year’s. (It’s true that, thanks to the expiration of some COVID-19 emergency measures, total program spending is shrinking by $4.5 billion this year, though it will grow back to almost the same level by 2025.)

But the Tories are rather notably not proposing anything that could be called an “austerity” budget right now, or apparently in the future, and that’s a pretty substantial departure from what they were calling for when they were first elected and from the response of numerous conservative governments around the world after the 2008 global financial crisis.

Bethlenfalvy was relatively concise when asked how he, a small-government conservative, felt about presiding over a plan to run deficits for the next decade: “I’d do it all over again.”

“We’ve got a war against an invisible enemy. This is what governments do. This is what responsible governments do,” Bethlenfalvy said.

It’s certainly possible to overstate the Tories’ change of heart. Even with the current projected spending, there won’t be increases like those that occurred in the last few years of the Liberal tenure — and spending won’t even increase as fast as the government projects the economy will rebound post-COVID-19. In those senses, the size of the government in Ontario will remain smaller than it would otherwise be. But make no mistake: the Tories are thinking about the government in much larger terms than they were not that long ago, and if they stick with it, that could mean dramatic changes in Ontario politics over the next decade.

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