In 2012 local government posted the largest deficit ever. $9.2 billion dollars. This summer, Ontario's deficit and high spending policies resulted in a downgrade from credit agencies. Ontario's deficit is over $15 billion.Prior to 2000 it was rare for local government to post a deficit of more than $1 billion but that number climbed to $6.3 billion during the 2008 great recession. Canada's gross government debt is higher than the United States or the European Union.
An aging population leading to higher healthcare costs on lower economic growth is a recipe for disaster. Interest rates are at an all time low but at some point in the future they must rise. With government's penchant for taking on long term debt, this would create a very precarious situation.
Politicians will always try to put off making hard choices but facing up to government debt problems is a matter of arithmetic, not ideology.
*Philip Cross is a Fellow at the Macdonald-Laurier Institute and former Chief Economic Analyst at Statistics Canada and his article is posted online at the National Post.Original Article is here.
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The City of Windsor is a prime example of what can be done to mitigate the damage of out of control spending and increased debt levels. They have gone 5 years without a tax increase, have decreased their debt from $230 million to $110 million and City reserves have increased from $42 million to $114 million.
Windsor has managed to do all of this during Ontario's manufacturing collapse, still has one of the Nation's highest unemployment rates of 10.1% and is ranked one of Canada's poorest cities, with 40% of it's residents living in low income neighbourhoods. The City's aggressive pay down of debt has trimmed $11-12 million dollars in annual interest payments. The Chief Financial Officer, Mr. Colucci asks departments to submit savings ideas that have no impact on services. City planners then analysis the situation with a vision that this is something that needs to be done. This is an example of how things can and should be done. The City of Windsor's Mayor who ran Windsor's Royal Pita Baking Company was elected in 2003 at the age of 29. Mayor Eddie Francis should be applauded for his fiscal ability. Windsor has started a $1.5 billion dollar infrastructure campaign that includes bike paths, upgraded libraries, a new aquatic centre and the new WFCU Sports Centre, all paid for with cash upfront.
Our previous post about Norfolk's 46 Planning and Economical Development staff with an additional 18 seasonal helpers place Norfolk just behind Windsor with their 86 departmental staff. Windsor has almost 4 times the amount of Citizens as compared to Norfolk County and still include costs savings as part of their job description.
Windsor has outsourced parking enforcement and garbage collection, they have also cut 160 positions in city staff. Norfolk on the other hand still continues to hire people for their bloated Planning and Ec-Dev department as well as Social Services during their so called 'hiring freeze'. Norfolk's Staff salary and benefits have risen over $14 million in 6 short years alone.
| Year | Salaries | Benefits | Total |
|---|---|---|---|
| 2006 | $35,556,156 | $8,665,670 | $44,221,826 |
| 2007 | $38,125,920 | $8,665,670 | $46,791,590 |
| 2008 | $41,310,524 | $9,829,138 | $51,139,662 |
| 2009 | $42,794,985 | $10,597,180 | $53,392,165 |
| 2010 | $43,359,814 | $13,817,013 | $57,176,827 |
| 2011 | $45,155,921 | $12,213,112 | $57,369,033 |
| 2012 | $45,651,543 | $13,064,670 | $58,716,213 |
| 28% increase | 51% increase |
With The Long Point Region Conservation Authority back at the trough for another ride on the gravy train the costs keep climbing. In 2010 the Budget from the LPRCA states Staff is in at a cost of $1,764,216 and the most recent budget document shows they are looking for $2,348,537 in 2014. A 33% increase in the cost of staff. We're unclear if the $102,746(2012) going to the pension fund is included in this number as the LPRCA follows an accounting practice of their own design. Little surprise that Chair of the Board (Mr Roger Geysens) of the LPRCA told Council at the LPRCA budget discussion on Dec 3rd that a forensic audit will need to be done.
With Norfolk's high priced head of all things financial missing in action will Council ever be able to compare the numbers to make informed decisions? Does Mr John Ford actually do any work for Norfolk County?
How do our tax rates compare to other municipalities and what is the true cost of being 'Open for Business'.
Is our debt level maintainable moving forward and is there accountability and transparency or are those words just a catch phrase for the upper echelon to use as a marketing tool?
Stay tuned, we're working on those numbers and will post them for you shortly.
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