The real victims of the Drummond report’s cuts

Thomas Walkom, Opinion, The Toronto Star:

That the rich will fare best under Drummond is true by definition.

The well-to-do depend less on government programs than the poor and middle class. That is a fact. Drummond’s call for government to roll back the Ontario Child Benefit will hurt poor families who receive the subsidy. It will not affect the rich who do not.

Nor are the wealthy being asked to chip in through higher progressive taxes. Drummond did advocate that some taxes, including those on property and gasoline, be hiked. He even wants a special tax (he calls it a user fee) levied on rural parents who bus their children to school.

But these kinds of regressive taxes hit the poor and middle class proportionally harder than the rich. A surtax on high-income earners could correct that bias. But Premier Dalton McGuinty specifically told Drummond to stay away from such remedies.

In his former life as a bank economist, Drummond routinely calculated the effect of government spending on employment. Yet in this report there is nothing, even though he acknowledges he is proposing cuts on an “unprecedented” scale.

In fact, he appears to assume that the government’s decision to withdraw billions of dollars from the economy will have no effect on gross domestic product and jobs.

Yet if we maintain, as Drummond once did, that government spending does matter, a different picture emerges. Rough calculations, based on his figures and finance department estimates, suggest that the Drummond plan will end up throwing roughly 250,000 additional Ontarians out of work by 2018. Even without another global crisis, that translates into an unemployment rate of about 11 per cent.

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