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VIEW: ‘Drummond austerity agenda will hurt’, says Walkom

Toronto Star columnist Thomas Walkom writes, “Don Drummond, Ontario’s adviser on everything, says the harsh government spending cuts he wants must be seen as fair to succeed — they must hit everyone. In fact, they almost certainly won’t. The well-off will fare better than the poor and middle class. Public sector employees will be hit harder than those in the private sector.”

Drug companies will prevail
Some hope has been derived from the fact that on page 460 of the report, Drummond writes, “The outcome of the negotiations for a comprehensive free trade agreement with the European Union could have significant impact on the cost of prescription drugs in Ontario. A key negotiating point, the extension of Canadian patent protections for pharmaceutical drugs to European standards, could cost Ontario taxpayers up to $1.2 billion annually ($551 million for the Ontario government and $672 million for the private sector)…”

But Walkom counters, “Groups with political clout — such as the multinational pharmaceutical firms that charge prices Drummond deems too high — are sure to successfully resist proposals that they share the pain. They’ve done so before.”

Thousands will be put out of work
“Most alarmingly, Drummond’s harsh medicine would throw tens of thousands more Ontarians out of work. His proposed spending cuts may result in a balanced budget by 2018. But calculations based on Drummond’s own figures indicate they will push the provincial unemployment rate into double-digit territory. …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.”

The poor and middle-class will be hit more than the rich
“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.”

His health proposals promote privatization
“Take Drummond’s proposed health-care savings. They are predicated, in part, on moving physicians into so-called family health teams where doctors earn less. But as the Canadian Medical Association Journal has reported, such teams have succeeded up to now only because they’ve paid doctors more. Drummond says Ontario physicians are the highest-paid in Canada. He’s wrong. The Canadian Institute for Health Information says that Ontario family doctors, for instance, earn less than their counterparts in six other provinces.”

Council of Canadians health care campaigner Adrienne Silnicki points out, “Drummond at length talks about how expensive the system is getting (citing numbers from private sector care) and yet, doesn’t separate publicly delivered health care expenditure from privately delivered health care expenditure. But public health care has remained stable at 5-7% of GDP for over three decades! Private health care is the major driver of health care prices and is increasing rapidly at 7.5-12% per year! Drummond points out the cost of drugs (private), eye care (private), dental care (private) are all major cost drivers, but then he actually recommends that we increase private delivery of services….(insert rewind sound here) what?!”

Billions of dollars will be withdrawn from the economy
“The oddest aspect of this well-respected economist’s report is that he never addresses the macro-economic implications of his plan. 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.”

To read blogs by Silnicki, trade campaigner Stuart Trew, and Ontario-Quebec organizer Mark Calzavara on the Drummond Report, please see For more on the Harper austerity agenda, see