The Tory "Blueprint" vs. Reality
By Douglas JE Barnes

The Progressive Conservative Party of Ontario has published a document they call a Blueprint "to keep Ontario on the right track." The Blueprint Highlights try to offer proof of the success of their Common Sense Revolution. However, their claims diverge significantly from reality.

Their first claim is that they have cut taxes (phenominally) and this has resulted in increased jobs.

• The debate is over - tax cuts create jobs. Ontario has led the way and others are now following Mike Harris’ common sense leadership by cutting taxes to boost their economies. Now, we’re going to cut taxes again, putting even more money back in the pockets of hard-working people and stimulating even more job creation. We’ll cut both the provincial income tax rate AND the provincial portion of residential property taxes by 20%. Landlords will be required to pass their savings on to tenants.
  

Before you run out and kiss Mike Harris for saving you from a 58% tax rate, there is something you should know: this is a misrepresentation (or lie if you prefer that term). The numbers they give here are income "tax as per cent of basic federal tax." At least this is what the Ministry of Finance said when it was first released. (See Income Tax Cuts And Job Creation in Ontario 1995-1999 below.) I guess it looks a lot better when you leave out the fact that it is not actually income tax rate.

From the Ministry of Finance.

Note they claim, matter of factly, that tax cuts create jobs. Keep in mind that this is just an assertion, no proof is given. I'll come to the "job creation" argument in a moment.

Next, they try to cast themselves as the savers and defenders of health care in Ontario - quite a brazen rewriting of history. Let' look:

• We’ve already increased health care spending by $1.5 billion to its highest level in Ontario history, despite huge cuts in federal funding. It took some tough, politically risky action, but we’ve done what had to be done to modernize the system and refocus spending on front-line care. Now, we are building a health care system for the future by increasing health care funding by a guaranteed 20% over the next five years to meet the needs of our aging population and the rising costs of medicine. We’ll also introduce a Patient’s Bill of Rights to guarantee you and your family the quality services you need, when you need them.

According to the Ontario Health Coalition (OHC), "[w]hen you consider population growth, aging, and inflation, real health care spending in Ontario has remained flat since the Conservative government came to power." I am frankly amazed that it would increase considering all the hospitals the Tories shut down in their first term. The OHC also says, "In fact, provincial health care spending has actually shrunk as a percentage of the provincial economy (from 5.7% of the economy before Harris in 1994-5 to 5.3% in 2000-01). It has also shrunk as a proportion of provincial revenues (from 38.2% in 1994-5 to 35.1% in 2000-2001) - despite massive tax cuts. " So much for the increases. The 20% guarantee is in question now (Sept. 2001) as the Tories now say that spending is out of control.

As far as the "politically risky action," I guess they are refering to when they laid off about 10000 nurses then hired them back again with federal funds.

Next comes education:

• We believe our classrooms should be the focus of our resources, and so we will guarantee that classroom funding will continue to increase to match rising enrollment. Our education system must be directly linked to the real world - to the jobs, ideas and challenges we face every day. We’ll create higher education standards by testing our teachers as well as our students...open the doors to advanced education with more financial assistance for students...and start early with effective programs for young children on the first rung of the learning ladder.

You will notice that they have no nifty chart with this claim. Do they really think that "our classrooms should be the focus of our resources?" Perhaps it will help to look at their track record in the area of education.

Their policy all started with then Education Minister Snobelen saying that they needed to "manufacture a crisis" in the school system (this was caught on video). Then the Tories gave us Bill 160 - the Education Improvement Act, parts of which were struck down by the courts as unconstitutional. Bill 160 gave the province the powers of elected school boards and the bill also had a clause allowing them to make changes to the regulations without a vote in the legislature. After that they gave us Bill 75 - the Education Accountability Act.
In the words of Citizens on the Web (CotW):

• [Bill 75] [ r]estricts the collective bargaining power of teachers unions by not allowing union representatives to set foot on school property, to approach a teacher during school hours or to spend more than 15 hours a month talking to teachers.... Principles will have the power to ignore and/or over-ride any collective agreements reached by the teachers unions. The Education Minister will have the power to, at any time, change board-approved curriculums, assign passing or failing grades to any student dependant upon the amount of resistance the student has made to school-board and/or ministry policies and regulations, expel students for any reason at all, and suspend teachers for any reason at all. Extra-curricular activities can be forced upon any teacher at anytime of the year, 24 hours a day, 7 days a week, without pay and regardless of collective agreements reached by teachers unions. ANY DECISIONS MADE BY THE MINISTER CANNOT BE CHALLENGED, NOR CAN THEY BE REVIEWED BY A COURT. Boards will not be allowed to protect their employees. Any board which makes a move which is contrary to Ministry guidelines, or which HINTS at making such a move, can be suspended and/or fined. Boards are no longer subject to collective agreements reached by the teachers unions. The Minister may, at any time, incur the costs of the provincial level of education operation upon any school board. The Minister may direct any school/board funds away from the schools to anywhere the Minister deems appropriate, and such funds may not be reviewed or traced.

The Tories have also made inroads to establishing private universities in Ontario. Under Nafta, once they allow private universities, they cannot keep out US private universities. Also, funding the public universities receive from the state could be deemed as a barrier to free trade and would allow the private universities to demand the same funding. The results on students in such a case are predictable.

Update:

• Contrary to the government's claim that it has increased funding per student since it was elected, funding on a real per-student basis has actually been reduced by nearly $2.3 billion since 1995. http://www.policyalternatives.ca/
  
  
• Contrary to the government's claim that its formula was merely redressing inequities in the previous funding system, the data show clearly that the formula is simply a disguise for significant cuts in resources allocated to education. The total gain for previously under-resourced boards - Catholic, Northern and French language - is less than $88 million since 1997; the total loss for other boards, since 1997, is just over $1 billion. http://www.policyalternatives.ca/
  
  
• Despite the government's claims to the contrary, the real story of the funding formula is an attack on the financial base for public school boards in large urban areas in southern Ontario - a cut of more than $921 million in real per-student terms since 1997. http://www.policyalternatives.ca/
  

I'll lay off the Blueprint's "Building for the Future" secton as it just makes promises for the future. Will they carry out their "$20 billion public/private SuperBuild Growth Fund" or won't they? Who know? But it sure sounds good as long as you ignore their track record.

On welfare, we are told,

• Our welfare reforms, including work-for-welfare, have helped nearly 400,000 people break the cycle of welfare dependency. That’s a solid start. Now, we’ll make even more progress by re-focussing the welfare system from one that hands out cheques to one that gets people’s lives back on track. We’ll tear down the barriers to employment for recipients, such as drug addiction and illiteracy, and expand workfare to get more recipients earning and learning their way to new jobs.

How about we start with the nifty graph. You will note that the graph says "Cumulative number of people off welfare rolls." This means that they added the previous year's numbers to each year's figure. In other words, 1996 is 87 100, 1997 is 46 169, 1998 is 115 284 and March 1999 is 9 600. People go on welfare, people go off welfare. How many got on welfare during the same years? How many who got off joined Ontario's exploding homeless population?

On the issue of workfare, if people thought about this, they would be up in arms about it. It is very easy to cast those on welfare as lazy people who are parasites on the system (although proving that is impossible - if you disagree, I welcome a logical argument that proves it). With this stereotype in mind, many people are eager to force recipients to work for their benefits. The Catch 22 is that the jobs given are publicly subsidized. (Subsidized in that the government is paying a big slice of the wages and, as CotW reported on Sept. 99, "The Harris government is bribing private firms up to $4,000 per head to participate in Workfare. The cash is from a $46-million employer incentive fund intended to encourage companies." The effect of this is to drive down wages in other sectors. If you don't like "welfare bums" getting a free ride, how do you like your salary dropping? Workfare hurts the employed. You are much better off with the old system.

On "waste" the Tories say,

• Once the budget is balanced - as promised and on schedule - we’ll start paying down the provincial debt, with a total debt reduction of at least $2 billion over our next term in office. Our long-term goal is to reduce Ontario’s debt-to-GDP ratio from 30% to 25% over our next term and down to 10% within 20 years. We’ve made great strides in protecting taxpayers’ hard-earned dollars by eliminating waste, duplication and fraud in spending. We’ll continue to wipe out wasteful spending wherever we find it. Our plan includes a commitment to save taxpayers one cent of every dollar of overall spending in each of the next two years. Health care and education funding will be protected. In fact, health care funding will increase a guaranteed 20% and classroom funding will continue to rise to match new enrollment.

First off, I assume that this was not published in 2000, because the budget was not balanced. If it was, why was $1 billion of the 2000 budget used to balance the budget? (CotW)

Secondly, debt is not always a bad thing as long as it is going towards something useful. The government can go into debt with a program that provides jobs and pays the debt back later. The deficit on its own gives no information as to what kind of financial shape you are in. (I'm not talking about the kind of spiralling debt that the third world faces.) A much more useful number would be the Net Provincial Welfare per capital. I suspect that it is not posted as it might embarrass the Harris government.

Also, they claimto have cut waste? Yes, they did - and services along with it. They have cut thousands of civil service jobs, it would be impossible not to have eliminated at least some waste along with those cuts. Those numbers are more than just numbers. They are people who had jobs then became unemployed. I won't go into a big explanation of the effect of this on the economy. (I hope the reader can appreciate on her/his own.) It suffices to say that deficit mania is not all it is cracked up to be.

I n the "new jobs" section, lies abound. (Sorry, I don't know a more delicate way to put it):

• Proving the so-called ‘experts’ wrong, Mike Harris fixed the problems plaguing Ontario by cutting taxes and eliminating barriers to growth. The result is increased economic growth and 540,000 new jobs since 1995 - well ahead of schedule in our five-year commitment to generate 725,000 new jobs for Ontario. This plan maintains our momentum and will help fuel the creation of 825,000 more new jobs over five years.

This graph is too much. I'm going to start by taking this graph at face value and assume that it is not designed to mislead.

First off, the baseline is not zero. If it were, it would mean that no one got a new job between late 1990 and mid 1995. Next, we see that after Mike Harris was elected, job creation skyrocketted to 540000 jobs in 1999. What does this mean?

In 2000, the number of working age adults in Ontario (age 15-64) was 7 932 566, according to Stats Canada.

Unemployment in Ontario was 355 700, according to Stats Can

Wow! The Harris government not only created more jobs than unemployment, they created 152% more! Then how is it that anyone was unemployed? Why all the hub-bub over welfare? What is going on?

A huge lie is going on. The graph is a regular new job creation graph until it gets to 1995. From 1995 on, the graph becomes cumulative. That is, the jobs total of '95 is added to '96, '96 is added to '97, '97 is added to '98 which in turn is added to '99. We can see that it wasn't cumulative before 1995 because we have jobs registering from 1989 to 1990. If it were cumulative then, those figures would have carried through '91 to '95. The result would be much less impressive for the Harris government. This manipulation is not the way things are done by statisticians. This misrepresentation is simply a lie. You can see the same numbers listed as "cumulative job creation" in the graph Income Tax Cuts And Job Creation in Ontario 1995-1999 below:

From The Ministry of Finance.

Next, they claim to have proved "the so-called 'experts' wrong. The keyword is claim. They offer no proof. They only show that they have cut taxes and news jobs have been created. They suggest a correlation but offer no proof. Could there be other reasons that jobs were created? Could it be that by throwing people off welfare, many of those people have been taking minimum wage jobs that don't support them? What about the fact that Ontario is the most populous province and that Toronto is the largest city and Ontario is the industrial centre of Canada? Would not Ontario see new jobs in emerging sectors of the economy (IT, etc.) more than other provinces?

I could put up a graph that shows that internet connections increased from 1995 and claim a correlation between that and jobs but, like the Tory claim, it would just be a claim.

I would get more information from a charting of unemployment or lost jobs than new jobs.

In summary, closer inspection of the Tories central claims regarding taxs, their correlation to job creation, health care, education and welfare reveals them to be mostly hollow. Ontario has seen a tax rebate but also a corresponding increase in municipal tax rates and a considerable degrading of services. The Tories are in office, in part, because they have delivered tax rates but also because of their fantastic claims. Hopefully, this effort will expose some of their claims.

Harris | Tokyo Tightwad | Brave New Tokyo