Canadian Taxpayers Federation
Ontario Division
P.O. Box 60
31 Adelaide Street East
Toronto, ON
M5C 2H8

Thursday, November 27, 2003

Dalton McGuinty
Premier
Legislative Building
Queen's Park
Toronto, Ontario
M7A 1A1


Dear Mr. Premier,

I am writing to you in order to seek clarification concerning reports the government is preparing to rewrite Ontario's Taxpayer Protection & Balanced Budget Act.

As you are aware, this law was passed in 1999 by the legislature with bipartisan support and reflects the desire of Ontario taxpayers for their government to live within its means and tax-and-spend responsibly. Indeed, your own party made its unambiguous support of the law a cornerstone of its recent and successful election campaign. Your support for taxpayer protection and balanced budget legislation was equally enthusiastic in the 1999 election campaign.

On Friday, November 21, you publicly stated the balanced budget law is having a "perverse effect on governments." No other details were provided, and your comments have been widely interpreted to mean the government is considering amendments that will scuttle the Act in its current form. Any weakening of the legislation is wholly unacceptable to the taxpayers of Ontario.

The law requires the Ontario government to balance the budget each year. In case of a budget deficit, the premier and cabinet members are obliged to take a 25 per cent cut in pay, and a 50 per cent cut for subsequent deficits. But the law can hardly be described as a straightjacket on lawmakers. Salary reductions are waived when a government "inherits" a deficit from another, in times of war, in case of disaster, or if revenues decline by five per cent. Contrary to your assertion, there are, in fact, no mechanisms to force spending cuts or even limit the growth in government spending should deficits occur.

I recognize the law makes your job somewhat more difficult since it requires a personal financial sacrifice if the budget is not balanced next year. But I also know the people of Ontario expect you to balance the budget. They believe this not because of the balanced budget law, but because you promised voters during the campaign that you would balance the budget.

Changing, modifying or amending the law will not solve the budget deficit or make your job any less difficult. I know that you, and your campaign team, understood the ramifications of promising the people of Ontario that your government would abide by the Taxpayer Protection & Balanced Budget Act. Moreover, I believe your government understands that it risks losing public support if it behaves in a fiscally irresponsible manner and fails to balance the budget.

Rather than change the law, I trust your government will abide by it. As you have said, quick fixes or papering over real problems is not how a government should operate. Amending the Taxpayer Protection & Balanced Budget Act will only signal that your government is not truly committed to solving the province's financial woes.


Respectfully,


John Williamson
Ontario Director
Canadian Taxpayers Federation