Saturday, May 4, 2013

Ontario's $281 Billion Debt, Breach of Fiduciary Duty and Lack of Due Diligence?

Ten years ago the Ontario liberal party’s government took over the reigns of fiscal responsibility and power on behalf of their party and the taxpayers were on the hook for $140 Billion Dollars in total Debt.  

Today that total debt has ballooned to $281 Billion of debt and within 3 to 4 years shall reach a projected $300 Billion! 

The fastest expense increase for programs now goes to interest payments for debt, courtesy of this liberal party’s government, and Ontario residents are on the hook for $12. 2 Billion Up from $10.4 Billion!

This profound endless diversion of taxpayer funds, from much needed Ontario infrastructure programs of public transit, upgrades, repairs and expansions, to pay for this never ending rise of borrowing and interest on debt servicing costs for unsustainable programs & services will within a year consume 12% of government existing tax revenue sources!  

When the cost of holding on to political party power is motivated through appeasement and carefully crafted budgetary imagery that political party’s government has abdicated the right to govern.    

The finance minister loudly proclaims that “eliminating the deficit is the single most important step we can take to grow the economy and create jobs,” then presents Ontarian's with a $1.9 Billion dollar deficit increase? 

In addition to a $3.7 Billion spending increase from $124 Billion to his budgeted projection of $127.6 Billion in one year!

A minimum decrease of $2.9 Billion in spending alone each year for and every year over the next four years in spending alone would be required to eliminate this liberal party government’s deficit that has more than doubled since they gained control of the Ontario government. 

In my humble opinion as a mere mortal this budget is a sham and yet another breach of fiduciary duty and lack of due diligence on the part of both the NDP and the Liberal Political Parties.

It seems they both continue to set aside any semblance of prudence or good government that political party governments have the legal, moral and ethical obligations to act honestly, in good faith and in the BEST interest of citizens and NOT the self serving interests of political parties and career politicians. 

1 comment:

  1. Right on target, Peter!

    When government is in an uncontrolled spending frenzy, they can't possibly be acting with fiduciary responsibility by lowering an outrageous debt amount. But that debt reduction only BEGINS with stopping the spending, and as you have pointed out, a debt can only BE ERASED by paying it off.

    A case in point is Rob Ford's lack of progress in ridding Toronto of a crushing debt. Although curtailing the spendthrift leftist aldermen from bankrupting the city, Ford still has not made the tinyest dent in the promised reduction of Toronto's own multi-billion dollar loan deficit. Ford makes a great rock in the spending stream, but seems just not capable of formulating any realistic ideas about paying off the city's debt in a meaningful way BECAUSE the programs he proposes to eliminate the debt have thus far been REactive in nature (cut, reduce, divide, remove, or otherwise try to somehow escape from the debt by spending less rather than finding ways to pay it off), not PROactive (review, invest, build, renew, revamp, restore, create means of paying it off that don't include adding taxation).

    Reactive programs can never be designed to create the new wealth that proactive programs can generate to pay off the various government debts without burdening taxpayers farther. They can only scratch a few cents off existing programs.

    The same fate awaits any new Provincial Legislature that thinks it can reduce a debt by either cutting back on programs whose purposes are to adequately serve its constituency, or through -as is the current fave-of-the-day- mindlessly supporting new programs whose sole result will be to enrich the construction industry with taxpayers' money while at the same time reducing taxpayer benefits to cover those loan interest payments.

    Recently a sitting Toronto Councilor on the TTC board told the press that the Metrolinx enlargement programs had to be undertaken to service a clientele that would show up due to the enlargement. Being sometimes prosaic of mind, I immediately imagined an ice cream store that decided to increase its stock and then advertised the increase in hope that people would show up to eat it. My imaginary store very quickly went out of business. [I didn't imagine what happened to the tons of unsold ice cream, though. Blame my love of ice cream for lack of follow-up.]

    BTW, the much-maligned Bob Ray NDP provincial government of yore, castigated by the press and then defeated in the next election for spending money on saving government jobs, was vastly outshone by the ensuing Conservative government who promised to lower the budget by removing the welfare supplements from the poor and needy and instead added a walloping several billions more to the debt. My point being that the reduction of that debt is not so much a function of who is in power as what they do with their programs to END the spending and GET INTO the paying-off the debt portion of governance finance. You'll recall that we've exchanged similar ideas on this before.

    All the best, Peter

    Mark State


Thanks for your thoughts, comments and opinions, will be in touch. Peter Clarke