Austerity report for Ontario sweeping, ‘controversial’, warns minister

A long-awaited report that’s expected to provide a road map to austerity for deficit-plagued Ontario will contain some controversial recommendations on health care, Finance Minister Dwight Duncan said Tuesday.

TORONTO — A long-awaited report that’s expected to provide a road map to austerity for deficit-plagued Ontario will contain some controversial recommendations on health care, Finance Minister Dwight Duncan said Tuesday.

A “substantial portion” of the 362 recommendations contained in Wednesday’s report by former economist Don Drummond will focus on health care, mainly because it’s the largest single item in the provincial budget, he said.

“There are a lot of recommendations on health care, more so than other ministries,” Duncan said.

Some of Drummond’s suggestions may shock people, but it’s up to the governing Liberals to sift through his recommendations and decide which ones “make sense,” he added.

“(The report) is very sweeping and it will be very controversial,” Duncan said.

“He brings an economist point of view to this. I don’t think he spent a whole lot of time figuring out who he’s going to make mad and not make mad.”

Drummond has already mused that the government could save millions of dollars by delisting some procedures — such as unnecessary caesarean sections and hysterectomies — which raised the ire of public health advocates and women’s groups.

The Ontario Health Coalition has already warned that the report will recommend billions of dollars in health-care cuts that will put the province’s most vulnerable patients at risk.

Drummond told Premier Dalton McGuinty last fall that Ontario would have to cap the overall increase in government spending at one per cent a year until the province rebalances the books in 2017-18.

The Liberals hope to cap the growth in health spending at three per cent, but it eats up 42 per cent of every dollar so that could mean cuts of up to 30 per cent in some ministries.

Drummond is also expected to offer some advice that may not sit well with Ontario’s self-described “education premier.”

There are reports that his recommendations include getting rid of caps on classroom sizes, scrapping or revamping full-day kindergarten so that it’s less expensive, eliminating a fifth year for high school students who’ve completed Grade 12 and rolling back a new 30 per cent tuition rebate for some college and university students.

Duncan has already ruled out scrapping full-day kindergarten, which will cost the struggling province $1.5 billion a year once fully implemented in 2015.

The Toronto Star reported late Tuesday that Drummond will also recommend folding the province’s 36 public health units and 200 family health teams into the 14 local health integration networks as a cost-cutting measure.

Duncan said Drummond’s report will also look at the cost of pensions for public servants and how much it will cost to keep those plans solvent over the coming years.

McGuinty was tightlipped about the Drummond report Tuesday.

The former economist and federal finance official is putting forward ideas in a “dispassionate” and even “clinical” way, McGuinty said. It’s up to the government to sift through them.

“Some of them we may adopt wholeheartedly, some we may determine require some further study, some may require a modification,” he said.

“But in the end, our determination is to balance that budget, eliminate that deficit by 2017-18. It is not an easy undertaking, but it’s part of the job description.”

In a pre-emptive strike ahead of the report’s release, McGuinty suggested that the spring budget will include a freeze on compensation for executives in the broader public sector.

Those who run the province’s hospitals, colleges, universities, school boards and social services will have to do their part to slay Ontario’s deficit, which will reach $16 billion this year alone, he said.

Duncan later confirmed that he’s looking at options to rein in executive compensation, including expanding a wage freeze on non-unionized public sector workers that would also cover bonus pay and other incentives.

“Yes, that’s on the table,” he said.

The New Democrats, who hold some influence in the minority legislature, have demanded a cap on executive compensation.

Duncan wouldn’t rule it out, but said it’s a complicated issue, especially if unionized employees are making more than their boss.

“On the one hand, you want to show there’s fairness that’s being applied across the board,” he said.

“On the other hand, you want to be careful as a province that you don’t get into the weeds in terms of managing the executive suites of every hospital and every school and every college in Ontario.”

The Liberals faced some pointed questions about executive compensation back in January when the full contracts of hospital executives were posted online after they became subject to freedom of information laws.

The contracts showed some executives got generous pension top-ups of more than $100,000 a year, car allowances of up to $1,000 a month and severance packages worth more than $1 million — on top of generous salaries.