The province of Ontario has already announced it intends to run a deficit this fiscal year of no less than $500 million. During times like these people look to their political leaders to do what they can to help turn things around. So what are Mr. McGuinty’s priorities? He is banning cell phone use in cars and banning young drives from driving with friends. Meanwhile, he plans to spend billions more for teachers and big auto. This is a plan for disaster not recovery.
Instead of working on ways to reduce government spending, reform taxes or mould a framework to get the economy moving again, the premier is considering billions in bailouts for big auto and million more for elementary school teachers. As part of an effort to turn the ship around, he should first scrap the generous offer to the elementary teachers and tell big auto that enough is enough - cutting them off from the public trough.
Elementary school teachers of Ontario have been made an outrageously generous offer of a 12% pay increase over 4 years. Yet, they have refused to accept the offer claiming that there are ‘workload issues’ that need to be addressed. Teachers already earn $84,000 annually to work eight weeks less a year than most full-time workers. They also enjoy generous taxpayer-funded pensions on top of this. They need to recognize that when the economy isn’t going well and people are worried about losing their jobs they should just feel lucky they have a job and a pension, instead of complaining about a lucrative raise of 12%.
The Public Service Alliance of Canada, representing some 100,000 federal government workers, has the right idea. They just settled for a 6.8% wage hike over four years. Their president said, “It doesn't take a rocket scientist to look at what the economy is doing right now in Canada and around the globe. Given these tough economic times, we feel this is the right thing to do. We are trying to be as responsible as possible.”
Mr. McGuinty should look at this settlement, scrap the offer of 12% to the elementary teachers and replace it, instead, with an offer of at most 6.8% over four years. Better yet, offer a freeze for two years and revisit the issue when the economy turns around. While he is at it, he should lead by example and freeze salaries for MPPs as well.
Teachers aren’t the only ones with their hands out right now. The alphabet soup of groups seeking more cash from government starts with A for the auto sector. Ford, GM and Chrysler continue their cries for more government handouts. Data obtained through Freedom of Information reveals that the governments of Ontario and Canada combined to provide over $782 million in handouts to these three companies over just the last five years. Giving them any more money would be simply throwing good money after bad.
Big auto claim they may only want loans. Well, the last “loan” GM got from the province of Ontario was for $175 million, and the first nickel of repayment isn’t due until Dec. 31st, 2055. Of course, since getting the cash they continue to lay off workers, to give themselves large bonuses, to overpay labour and to build cars people don’t want. Only in McGuintynomics would an interest-free cash payment for which payments don’t start for over 50 years be called a ‘loan’. Enough is enough with these failing companies. Bailouts are not the answer. Tough love is. Cut them off and fore them to restructure as long-term profitable enterprises.
Mr. McGuinty has a difficult job ahead of him with Ontario suffering through tough economic times. Taxpayers want to see leadership on spending control and tax reform. A good first step would be to set a clear example by freezing MPPs salaries, to send a strong message to public sector workers that they need to get their expectations in order and to expect to share in the tough times. He should combine this with tough love for big auto. Then the premier can start the important heavy lifting on long-needed tax reform.
