Newspaper article The Canadian Press

Editorial Exchange: Oil Price Storm Will Hit Ontario

Newspaper article The Canadian Press

Editorial Exchange: Oil Price Storm Will Hit Ontario

Article excerpt

Editorial Exchange: Oil price storm will hit Ontario


An editorial from the Waterloo Region Record, published Feb. 6:

Stephen Harper's reputation as a shrewd money manager has nosedived with the price of oil. Ever since the cost of a barrel of crude went into free fall late last year, critics have accused the prime minister of making reckless decisions that threaten Canada's economic recovery.

There are reasons for such concerns. But the fingers wagging reproachfully at Harper should be shaking even more forcefully at Ontario Premier Kathleen Wynne. The fiscal foundations of Harper's government may be shaky. Hers are crumbling fast. And we think her government's economic mismanagement will have dire consequences for this province -- and Canada.

Harper's problem is that lower oil prices translate into lower tax revenues for his government -- possibly $8.2 billion lower this year alone. Meanwhile, as his critics love to point out, the tax cuts Harper rushed through last year mean even less cash for government coffers. All this puts a few speed humps in the road to the balanced budget Harper promises this spring.

Moreover, the confusion surrounding oil prices is so great it convinced the government to take the unusual step of postponing its budget by a month. Despite all this, Harper's government still says the next budget will be balanced -- and with no further spending cuts to make it happen.

Now, contrast this with Wynne who, in these days of economic and energy price uncertainty, has largely escaped the hardballs thrown Harper's way. Yet as her government prepares for its next budget, Wynne carries around her neck the albatross of this year's $12.5-billion deficit. She's vowed to end deficit spending in 2017-18. With the latest shifts in the economic wind, that increasingly looks impossible.

True, there are bright spots on Ontario's horizon. A lower Canadian dollar and a stronger American economy -- neither of which Wynne's government is responsible for -- could mean increased demand for Ontario manufactured goods. …

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