Ontario's Austerity Agenda

Vivian McCaffrey

Half a decade ago, the Ontario Liberal government responded to a downturn in the economy by introducing austerity measures designed to address a growing fiscal deficit. Today, the government is finding that the chickens have come home to roost; Ontarians are fighting back against the fallout of its austerity agenda. ETFO and its members have suffered the impact of that agenda and are engaged, along with others in the labour movement, in calling for a new vision for the province.

The global financial crisis of 2008-2009, sparked by the crash in the Wall Street markets in the United States, led to a significant loss of manufacturing jobs in Ontario, jobs that were, for the most part, well-paid union jobs that included benefits. Both the federal and Ontario governments initially introduced stimulus measures to respond to the recession that followed the financial crisis. However, both levels of government quickly abandoned that approach in favour of austerity measures – program cuts, public sector wage freezes and cuts to public sector benefits.

Attack on Public Sector Workers

Ontario’s austerity agenda began in 2011 with former Premier Dalton McGuinty appointing former TD bank economist Don Drummond to lead a study on how to address the growing fiscal deficit, a deficit caused by declining tax revenue due to economic decline as well as reduced federal transfers from the Harper government bent on reducing taxes and the role of government. From the get-go, the public sector was set up as the commission’s target; the commission was tasked with focusing only on the expenditure side of the deficit equation, not conducting a holistic analysis that included looking at how the province could generate additional revenue to balance the budget.

The decline in private sector manufacturing jobs meant that it was primarily public sector workers who enjoyed relative job security, decent salaries and benefits. The government calculated there would be public support for targeting these workers for cuts. These unionized workers’ salaries and benefits were no longer seen as a benchmark for the broader workforce to aspire to but rather something taxpayers could no longer afford to support.

Released in early 2012, the Drummond report’s recommendations for public sector cuts were extensive. For elementary education, the report recommended cancelling full-day kindergarten or, if maintaining the program, delaying its implementation and abandoning the staffing model that included early childhood educators. It also recommended increasing class size for all elementary grades, meaning 5,900 fewer teaching positions, and an elimination of 70 per cent of support staff positions, for annual savings of $600 million by 2017-18.

In embracing the Drummond recommendations, the McGuinty government didn’t adopt the most extreme proposals for elementary education. But the report gave the government political cover for implementing



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