This presentation looks at government finances as well as other factors that are driving GDP growth in Ontario.

1. Progressive Conservative –vs
Liberal Government for
Ontario
BY: PAUL YOUNG, CPA, CGA
DATE – APRIL 18, 2017

2. Agenda
• Summary
• Revenue/Taxation
• Expenses/Spending
• Productivity
• Hydro Rates

3. Summary / Ontario
• Ontario GDP will grow at pace of 1.8 to 2.3% for the next decade or so.
• Ontario has spending a problem -
https://www.fraserinstitute.org/studies/spending-is-the-source-of-
ontarios-deficit-and-debt-problem
• Moodys has downgraded bonds and put Ontario on watch
(http://www.metronews.ca/news/canada/2015/02/23/ontario-has-a-
serious-spending-problem-finds-credit-report.html)
• Budget watchdog also doubts Ontario will balance the budget -
http://business.financialpost.com/news/economy/ontario-watchdog-
says-balanced-budget-unlikely-for-several-years-despite-liberals-pledge
• Healthcare professionals are saying the system is max
(https://cupe.ca/1000-hospital-staff-travel-great-distances-kingston-
rally-end-funding-freeze-choking-ontario

4. Government Revenue/Ontario
Source – Government of Ontario, Stats Canada and Federal Government of Canada
Commentary and Analysis
• McGuinty introduced harmonized sales tax
• McGuinty introduced Ontario Health Premium tax
• Ontario is recipient of equalization payments
• Wynne is selling of assets, i.e. Ontario Power Generation
• Wynne is introducing carbon taxes / 2017
• McGuinty cut corporate tax rates
• Ontario loss over 300,000 manufacturing jobs
• Ontario growing public sector jobs greater than private sector

5. Government Spending/Ontario
Source – Government of Ontario, Stats Canada and Federal Government of Canada
% of Expenses /Spending
Analysis Commentary
• Harris spent close to 40% on healthcare as compare to McGuinty and
Wynne that spend approximately 38% on healthcare
• LHINs and CCAC were created but have done little in terms of improving
wait times and/or controlling of costs
• Education received more money, but we have more grads having hard time
finding jobs. Meanwhile. Ontario has significant skills gas that could
influence FDI
• Wynne pledge to bring the debt down to 26% of GDP. If Wynne were to
bring the debt down then should need to reduced the debt by $10B per
year.
• Drummond report was virtually ignored and it was succinct in terms of
Ontario has spending problem. Ontario is spending from 18.5 to 17.5% of
GDP of government and only taking in 16.8% in revenue. More taxation is
not the answer

6. Ontario Competitiveness
• Source – Stats Canada

7. Hydro Rates
http://www.torontosun.com/2017/03/21/liberal-plan-to-cut-hydro-rates-leaves-hospitals-hung-out-to-dry-ndp or
http://business.financialpost.com/news/energy/ontario-manufacturers-eye-greener-pastures-stateside-as-hydro-rates-go-through-the-roof
The Liberal government’s plan to slash hydro rates will offer no relief for Ontario hospitals, some of
which have seen their bills go up by as much as 105%, says the NDP.
Andrea Horwath says documents released to the New Democrats through a Freedom of
Information request show that many hospitals in the province have seen double-digit electricity
cost increases over the last six years. That’s valuable money being pulled from patient care and a
new government plan to slash rates by 25% offers no reduction for hospitals, she said
Toronto Sun – March 21, 2017 – Healthcare Sector
Financial Post – March 16, 2017 – Industrial Sector

8. Cap and Trade
• http://www.torontosun.com/2017/04/11/wynnes-cap-and-trade-lacks-
transparency
First, cap and trade doesn’t just impact the cost of home heating fuel and gasoline, but almost all
consumer products. Food, for example, is grown and transported to market using fossil fuel energy,
so when the price of gas goes up due to cap and trade, so does the price of food. So does the price of
fertilizer.
The second problem is that Wynne’s government was 34% low in predicting monthly natural gas
bills for average homeowners would rise by $5.
The average price increase since Jan. 1 has been $6.70 per month, according to natural gas suppliers,
while many homeowners report their bills are rising faster than that, as the actual increase depends
on the amount of natural gas a household consumes.
Meanwhile, the Wynne government refuses to break out the new cost of cap and trade on home
heating bills, although it tells hydro ratepayers in every bill, down to the penny, how much its 8%
rebate on the provincial portion of the HST is saving them.
Toronto Sun – Lorrie Goldstein – April 11, 2017

9. Summary
• Ontario is less competitive in 2017 than it was when Liberals took power in 2003
• Ontario has some highest hydro rates in North America
• Carbon taxation does not reduce emissions, but does increase overall costs to
consumers
• Ontario continues to drag its feet when it comes to developing natural
resources, like Chromite or Lithium or other areas
• Ontario productivity has worsen due to fact many companies are starting to
make investment in other jurisdiction
• Ontario debt is highest of any sovereign place in the world
• Systemic issues with real estate have not been addressed all parties in Ontario