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Saturday, Feb. 4, 2006

Is it 1985 all over again for Tories?

Globe and Mail
Tuesday, Sep. 23, 2003

Mark Mullins was there for the birth of the Common Sense Revolution. Now, with an able assist from Ernie Eves, he is helping to bury it.

Mr. Mullins was the Bay Street economist the Progressive Conservatives trotted out in 1994 to give a veneer of respectability to their radical plan to pull Ontario out of its quagmire of debt by taking a hatchet to taxes and spending.

"This plan will work," he is quoted as saying on the first page of the manifesto that he helped write and the Tories used to ride into office in Ontario eight years ago. He still believes that reducing taxes and dampening government expenditures is the key to economic prosperity, but he finds that the Tories under Mr. Eves have strayed far from this path.

Monday, Mr. Mullins released a damning report under the auspices of the right-wing Fraser Institute (where Mike Harris serves on the board) that said the government deficit could reach $4.5-billion in the fiscal year that ends next March 31. "This is a fiscal emergency," he said.

Mr. Mullins also had harsh words for the opposition Liberals, but his conclusion that Ontario is teetering on a financial precipice because it has ceased to hold down spending hits the Tories particularly hard. It is one more headache that Conservative Leader Ernie Eves doesn't need as he campaigns for re-election on Oct. 2.

A new batch of polls suggests the Liberals are heading for a landslide. A survey by Ipsos-Reid released last night finds that heading into tonight's televised leaders' debate, the Liberals have the support of one of every two voters, with 33 per cent opting for the Conservatives and 12 per cent for the New Democratic Party.

Other polls support those numbers, which, according to projections by G.P. Murray Research Ltd., would give the Liberals 68 seats in the 103-seat legislature, compared to 27 for the Conservatives and eight for the NDP.

Mr. Mullins, the Fraser Institute's director of Ontario studies, says his report is meant to be an impartial look at province's economic health, but he's wise enough to know that everything gets ground up for partisan purposes during an election campaign.

Mr. Eves never passes up an opportunity on the campaign trail to remind listeners that he is the wizard who brought Ontario back to its fiscal senses after a decade of what he characterizes as mismanagement by Liberal and New Democratic Party governments. He relates how the province was spending $1-million an hour more than it was earning when he became Finance Minister and that he turned things around so that the Conservatives have delivered five consecutive balanced budgets.

Mr. Mullins points out, however, that the government spending began to creep back up starting in 1998 and that the Eves administration is now spending about $500,000 an hour more than it is bringing in. The analysis mocks the Tory pledge to cut taxes by $4.3-billion.

Mr. Eves hit the line hard with his head down to get past the report. "I know that we won't be running a deficit this year if we form the government after Oct. 2," he said at a campaign stop in Markham. Others in the party were suggesting Monday that, in fact, the report plays into their hands because voters will turn to them once again to get the books in order. Well, yes, and arsonists make good firefighters.

But the Liberals ought not to get too cocky. Mr. Mullins suggests their platform of tax and spending increases would leave a $4-billion deficit by 2006. He notes that they have no plan to address a deficit they would find after election day and haven't updated their numbers to account for the economic slowdown in Ontario.

Liberal Leader Dalton McGuinty seized upon the report's conclusion that Ontario was in a deficit position, but he did not take well the cautionary words about his own party's platform.

"They are dead on when they say this government is hiding a deficit," he said in Toronto. And the criticism of the Liberal plan? "I appreciate their opinion on that." Application Error

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