To ensure a Formative Future, we need a Fiscal Focus. This was the message delivered by the Canadian Taxpayers Federation (CTF) recently when the Standing Committee on Finance and Economic Affairs brought its traveling pre-budget consultation road show to Ottawa.

The CTF delivered a strong warning to Ontario's Tories and the new Finance Minister (Jim Flaherty) to start acting like a conservative government. In our pre-budget submission, we forwarded six recommendations for action.

Debt: While the government has slowly reduced the debt by $2 billion from its height of $114 billion two years ago, more must be done.

Broken down, this means each taxpayer in Ontario is responsible for over $21,000 of debt. Even worse, debt interest costs alone are $1 billion higher today than when the Tories assumed office back in 1995.

And at $9.4 billion a year, debt interest payments chew up 14.7 cents of each tax dollar sent to Queen's Park. That's over $25 million a day, over $1 million per hour, almost $18,000 per minute and a staggering $299.02 each and every second.

For Budget 2001, the CTF recommends a legislated schedule of annual debt reduction payments of 4% of gross provincial revenues. If revenue growth were to continue at 3% per annum, applying 4% of revenues would result in Ontario becoming debt free by 2028. Debt is a shameful example of intergenerational tax evasion: reduce debt today, cuts tomorrow's taxes.

Spending: Contrary to the rhetoric of government opponents, the Harris Tories are not mean-spirited slash and burn cost cutters. In fact, program expenditures per capita have never been higher.

Over the past four years, total program expenditures have increased by 14.77%. In health care alone, government spending per capita has increased a whopping 19.35%. If this growth continues unchecked, and even if we assume perpetual 3% growth in annual revenues, health care spending will consume the entire provincial budget by 2038.

By 2015 alone, health related spending might well consume 50% of the provincial budget. Provincial politicians will be forced to choose between hospital beds or textbooks. It's not a pretty picture.

For Budget 2001, the CTF recommends that the Ontario government seek first, to meet the needs for increased priority program expenditures through re-allocation within existing budget envelopes or through privatization proceeds such as capital divestiture and/or alternate service delivery. And total annual program expenditure growth should not exceed the percentage increase in inflation plus population growth.

Taxes: Last year, Ontario moved to a tax on income system. To be fair, the CTF recommended and continues to support this move. However, this has been confusing for Ontario taxpayers wishing to keep track of the government's pledge to reduce income taxes by 20% on top of the 30% cut during the last mandate.

In light of recent substantive federal tax cuts, taxpayers can be forgiven for wondering if they be better off under the old provincial tax payable on federal tax payable system. And CTF calculations reveal this was the case for 2000 and will be the case for this year.

For Budget 2001, the CTF recommends that Ontario proceed with its planned personal income tax cuts but it should revise its rates downwards to ensure that Ontario's new tax on income system doesn't claw back federal tax cuts.