Ontario budget 2012: A missed opportunity Niels Veldhuis, Charles Lammam, and Milagros Palacios
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n March, Ontario Finance Minister Dwight Duncan had one of those rare opportunities of which politicians can only dream. With his province heading towards a fiscal crisis caused by out-of-control spending and mounting debt, an opposition sympathetic to the need to deal with the problem, a public that expects his government to tackle the deficit (Angus Reid Public Opinion, 2012), and a media that understands the need for significant fiscal restraint, the stars were perfectly aligned for Duncan. Call it his “Paul Martin” opportunity. Unfortunately, unlike Martin, his friend and mentor, Duncan didn’t seize the opportunity. Flashback to 1994 when then-Federal Finance Minister Paul Martin and his Liberal government faced mounting pressure to enact significant fiscal reforms: The Canadian media had shunned the Liberals’ first attempt to deal with the federal deficit, a plan that proposed to slow spending growth while hoping that revenues would revive.1 The media’s reaction was largely representative of broader public opinion (Crowley et al., 2010).
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Fraser Forum May/June 2012
Wikimedia Commons
Ontario Finance Minister Dwight Duncan
In addition, the official opposition at the time (the Reform Party) called strongly for an end to federal deficits through spending reductions, thereby providing a political environment that welcomed reform. Further encouragement came from the Wall Street Journal’s mocking of the federal government’s serious debt problem. In 1995, Martin seized his opportunity and delivered a budget that proposed to cut, not just slow
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