PREMIER-DESIGNATE FORD: FREE DON DRUMMOND!

In the 2011 McGuinty budget, Don Drummond was appointed with much ballyhoo as the Liberals’ supreme advisor on digging Ontario’s economy out of an (even then) very deep fiscal hole. As the former Chief Economist at TD Bank, and before that as a near quarter-century senior veteran of the federal Finance Department, Drummond was seen as an imaginative thinker and thus eminently suited to the task.

Specifically, the assignment was to “examine long-term, fundamental changes to the way government works” and explore “which areas of service delivery are core to the Ontario government’s mandate, which areas could be delivered more efficiently by another entity and how to get better value for taxpayers’ money in delivering public services.”

Never mind that, at first blush, this sort of thing might be considered the job of the government itself, which is why we in the Official Opposition Leader’s Office (OLO) took to calling the Drummond exercise “fiscal responsibility – outsourced”. None of that mattered; Don Drummond was coming down the mountainside, and the world would hold its breath.

Little wonder, then, that the denizens of Queen’s Park had all but turned blue waiting on the blessed event. The run-up to the delivery of The Drummond Report in the winter of 2012 was marked by increasingly feverish media conjecture about what his report would contain, how explosive his recommendations might be and what, if anything, Finance Minister Dwight Duncan would do with them. Conventional wisdom held that the Drummond Report would provide the Liberals with some much-needed political cover to enact tough reforms to the way government operated and spent.

On the anointed day, February 15, 2012, the delivery of the Drummond Report was given the full budget treatment – right down to an hours-long formal lockup for political staff and media to receive the thing on an embargoed basis and digest its contents. At 670 pages it was the size of a large metropolitan phone book (remember those?), and contained no fewer than 362 detailed, prescriptive recommendations on everything from health care cost containment (2.6 per cent annually, please) and ending business subsidies to contracting out government services and user fees for water and parking.

Two things jumped out immediately, however, which would frame the debate over the Drummond Report and the next spring budget it was supposed to inform just weeks later: The first was Drummond’s projection that without drastic measures, Ontario’s annual deficits and accumulated debt would hit truly nauseating highs by 2017-18 (Note: and they have - ed). The second was a kind of statement on the rules of conduct, in Drummond’s remarks to the media that day: “This is not a smorgasbord from which the government can choose only the tastiest morsels and ignore the less palatable,” he said, while making an even more emphatic point out of it in the introduction to the report itself:

“We expect that many of our recommendations will be rejected. We accept that, but each rejected recommendation must be replaced not by a vacuum, but by a better idea – one that delivers a similar fiscal benefit.”[1]

None of which stopped the Liberals from immediately playing silly-bugger with the Drummond report. First, they started pulling several billion dollars in savings recommendations off the table with, yes, nothing to replace them, leading, within a matter of days, to what we in the OLO would dub Dalton McGuinty’s “Drummond deficit”. Day after day, from February 15 on, the Liberals signalled that they would rather throw sandbags around a handful of signature projects which Drummond had called out as singularly unaffordable. Put the brakes on Full Day Kindergarten ($1.5 billion)? Sorry – this is your Education Premier speaking. Cut capped class sizes ($500 million)? Just not on. Eliminate 70 per cent of non-teaching positions in a grossly top-heavy education bureaucracy ($600 million)? Don’t think so. On and on it went, through leaked dribs and drabs or outright declarations from assorted Ministers. Scrap the Ontario Clean Energy Benefit (a plain sop to ratepayers to “reward” the cost of the province’s wind and solar subsidies) for $1.1 billion? Err... No. Eliminate the utterly bogus “Healthy Home Tax Credit” ($125 million)? Nah. Repeal the tuition tax grant? Nope. $485 million.

No one could figure out at first why the Liberals would appoint Don Drummond to the task with such fanfare, and then set about systematically undermining or ignoring virtually everything he had to say. Their being in a minority situation didn’t explain it; if anything, one would have thought the government would want to galvanize a growing public consensus that the province’s finances were utterly untenable, and outflank the PCs in the process, as the party of “responsible fiscal management”. Nor, at first glance, did there seem to be any quarter for them in cozying up to Andrea Horwath’s NDP, the memories of Bob Rae’s disastrous reign still all too fresh in the minds of many Ontario voters. Certainly, there were routine accounts of deep fissures within the Liberal caucus and cabinet; few of them imagined their role, elected in the good times, would be to preside over constraints affecting programs that they were elected, as, well, Liberals, to nurture and expand, regardless of the cost to the public purse.

As February trudged into March, there was the whiff of a 2012 budget that by all signs would do precious little to address Ontario’s dire fiscal straits – at least if the government’s somewhat less-than-fulsome embrace of the Drummond Report was any indication – which even then was only the latest such portent. Given the Liberals’ minority status, and the fact that a budget is a confidence measure requiring the support of one or the other opposition parties to avoid an election, it was therefore only a matter of time before the political horse-trading began.

Here the Liberals tipped their hand early, signalling that a previously promised cut in the corporate income tax rate, from 11.5 per cent to 10, might now be off the table. This after a string of pronouncements by the Finance Minister himself that competitive business tax rates were central to Ontario’s economic recovery. Or that arch-rivals BC and Alberta both had already cut their business tax rates to 10 per cent. Or that stateside, that sinister corporate oligarch Barack Obama, had committed to cutting the untenable U.S. rate (the world’s second highest only to rapidly-sinking Japan), as had Jim Flaherty in Ottawa. No, these marginal players didn’t count. But as it became clear, the provincial third-party NDP’s Andrea Horwath certainly did. And as the pre-budget manoeuvring began, Ms Horwath made it plain that a cut in business taxes amounted to throwing buckets of unmarked bills at a Dickensian horde of greedy, pin-striped, cigar-chomping tycoons at the expense of the starving masses. One could now see where all this was headed: With Ontario now cracking under the bulk of a $16 billion deficit and sliding toward rust-belt status after the loss of 300,000 manufacturing jobs, the Liberals were tacking sharply left to suck up to the NDP and save their own political hides.

Budget Day arrived March 27, with the usual time-honoured formalities. In the lockup, we all huddled with caucus critics, researchers and, for an extended period, with Finance Ministry officials. We spent the better part of a day combing through the supporting documents in search of evidence that something – anything – that we had so emphatically and publicly sought might actually have been tossed somewhere into the mix. Oh, there were “commitments” aplenty – undertakings to study this, review that, or convene a blue ribbon panel to consider something else. These included references to giving thought to pondering whether to legislate a public sector wage freeze, should push come to shove, in such an eventuality, maybe. Or to contemplate assessing a pledge to think about fixing the plainly dysfunctional public sector salary arbitration system, as circumstances may warrant. And so on. All under the umbrella theme of “Strong Action for Ontario.” Except for the fact that, as we concluded over the course of that afternoon, “strong action” oftentimes required the use of action verbs in communicating the intent to act, well, strongly. There simply weren’t any in the thousands of pages of bumph that constituted Budget 2012.

However, Andrea Horwath was playing a different game: In a minority situation the confidence vote that is budget procedure threatened to bring down the minority Liberals. So in the duelling news conference blackmail burlesque in the run-up to the vote, Horwath managed to extract an additional tax on high-income earners. She got more spending on welfare, disability support payments and money for rural and northern hospitals. The total tab, according to the Ministry of Finance: Nearly $1 billion in additional taxes and spending. And she got a boost in the polls for her trouble, among voters who saw these things as the soul of “fairness and balance” regardless of the cost to a public purse straining to afford even the most basic services. All under a debt burden now so staggering that it was draining billions away from the very things the Liberals and NDP professed to care about the most – health care, education, and support for the most vulnerable.

And what of Don Drummond? Well, his media-propelled pop-culture status rapidly receded after all this. He still turns up occasionally in op-eds in the financial pages on subjects like Canada’s purportedly lagging productivity. Otherwise the man has gone to ground[2]. It’s reliably reported, however, that The Drummond Report has become a prized textbook for governments and universities as far away as the UK and Australia on how to go about reducing the size and cost of government without recourse to a meat cleaver.

Otherwise, one was left to wonder what he really thought of it all.

[1] Page ix, Commission on The Reform of Ontario’s Public Services https://www.fin.gov.on.ca/en/reformcommission/

[2] Until recently, that is, when he offered damning commentary on the respective party platforms in the 2018 Ontario election.