No 'cuts' but plenty of 'fiscal challenges' in Ontario budget

When he tables his May 1budget again this July 14afternoon, itll be clear to all who hear himthat OntarioFinance Minister Charles Sousa has a soothing, kind of FM, radio voice.

It has a re-assuring quality about it. And hes going to need every octave to convince the New York bond rating agencies that he and the government are on the right track with thebudget, that he can deliver on the promise to balance the provinces books by 2017-2018 and invest in a huge range of programsand projects.

In a speech last week to Torontos Empire Club, Sousa made it clear to his mostly business audience that the Wynnegovernment is sticking to its spending plan andwill get "back toblack,"as promised,by its self-imposed deadline.

Moodys Investors Services, for one, is skeptical andrecently changed its fiscal outlook for the province from "stable"to "negative,"though it left the provinces criticallyimportantcredit rating unchanged.

Sousa and Premier Kathleen Wynne say publicly and privatelythat they are determinedto do what, after all, got themelected with a majority government.

The finance minister says he accepts the view of some whosee Ontarios targets as ambitious.But inside and outsidethe legislature, he says it is his job and, that of the government, todeliver on the plan the Liberals campaigned on.

But just as former PC leader Tim Hudak had trouble withthe math of his Million Jobs Planand its 100,000 public-sectorjob cuts, the Liberal math is also, in many ways, just as breathtaking.

NDP brandsit 'Trojan horse budget'

Ontarios deficit sits at $12.5 billion. The projected Liberal spending what they call an "investmentplan" is $130.5 billion.So, to do what they said they would do andbalance the booksseems for many to be a difficult, if not impossible task.

Wynne says her government will not cut and slashacrossgovernment and will maintain the services and programsOntarians expect.

Butthe provincial Conservatives say the Liberal plan will putso-called front-line services at riskin health and educationand prompt a credit rating downgrade because of what interimleader Jim Wilson calls the Liberals' "wild spending spree."

For the NDP,they're calling the government's fiscal plan a "Trojan horse budget" that has hidden cuts the Liberals arent talking about,including a fire saleof government assets such as the LCBOandOntario Power Generation.

Wynne last week flatly rejected an NDP charge that, like Hudak,shell have to embark on 100,000 job cuts in the public sectorto keep her election commitments.

Still, the premier, while verbally stepping around the word "cuts"does say there are "fiscal challenges"that have to bemet. And, to most observers, that sounds a lot like code forcuts.

Teachers looking to cash in

Already Wynne has warned the provinces teachers, preparingto get to the bargaining table next month, that the cupboardisbare, and that there is no cash for wage hikes.

The teachers argue they have done their bit to help thegovernment in the past both politically andfiscally and nowis the time for some payback.

Wynne has a lot of political capitalright now, so the teacherfederations andothers will have to be careful as they approachnegotiations and decide just how hard their line should be with theLiberals.

There is no appetite among parents to see teachers walking apicket line again.If that were to happen, doubtless publicsentiment would shift away from the teacher federations andto the government.

But that doesnt mean that Liberals arent nervous about whatlies ahead, because they are keenly aware of the teachers'desire to get contract improvements.

The Liberals also know they raised expectations in the electioncampaign and must begin to deliver on those commitments, includinginfrastructure and transit spending and a made-in-Ontariopension plan.

There will be much talk of that in the budget address thisafternoon by the finance minister.

While the bond rating agencies watchthe provinces deficit and the promised move tobalance the books, voters across the province will be watching andwaiting for the words of the budget and the Liberal plan to translate into action.

The premier has said she will "not let you down," keenlyaware that failing to deliver may well be the differencebetween winning and losing her next provincial election.