Facing record debt, Ontario appoints Drummond to revamp public services – by Rob Ferguson (Toronto Star-March 29, 2011)

The Toronto Star, which is the largest circulation newspaper in the country, has an enormous impact on Canada’s federal and provincial politics as well as shaping public opinion.

Queen’s Park Bureau

Faced with $10.3 billion in annual interest payments on its record debt, Ontario is scrambling to revamp its public services by appointing respected economist Don Drummond to lead the effort.

And the government is looking at an expanded privatization of its ServiceOntario operations, which now provide documents like birth and marriage certificates, to see if more private-sector innovation could lead to improvements.

Finance Minister Dwight Duncan tasked Drummond — formerly the chief economist of TD Bank and once a senior finance official with the federal government — to advise on ways to speed the paydown of next year’s $16.3 billion deficit, which will boost Ontario’s net debt to $241.4 billion.

But Drummond must also protect spending on education and health care, two key priorities for the government that eat up 62 per cent or $70.8 billion of Ontario’s spending on programs.

“He has outright rejected the slash and burn approach,” Duncan told reporters in what amounted to a shot at Tim Hudak’s Progressive Conservatives.

Ontarians should not be afraid to vote Liberal in the October 6 election because the debt is up for good reasons – bailing out the auto industry to save jobs and improving public services, Duncan said.

“The investments we’ve made were in things like schools and hospitals.”

Hudak warned that with debt levels almost doubling under the Liberals since 2003 “we all know a big tax hike is on the way” after the election.

He promised a “sunset review” of all 600 government agencies, boards and commissions to “root out waste and abuse” and said his plan to scrap the Ontario Power Authority and local health integration networks would save $500 million a year.

Hudak wouldn’t say how long it would take a Conservative government to balance the budget, promising a plan later this spring.

Government officials said Drummond would be paid, but the amount has not been set. He and the finance ministry will decide on who else will help on the public services reform commission to report before next spring’s budget – if the Liberals are re-elected in the next provincial vote on October 6.

Duncan warned of risks going forward, including “the possibility that interest rates could rise sharply,” which means the cost of servicing the debt could shoot up.

For the rest of this article, please go to the Toronto Star website: http://www.thestar.com/news/canada/article/965183