Remarks by Warren (Smokey) Thomas, President, Ontario Public Service Employees Union, for a presentation to the Standing Committee on Finance and Economic Affairs re: the 2015-16 Ontario Budget

Committee Room 151, Main Legislative Building, Queen's Park, Toronto, January 29, 2015, 9:30 a.m.

Good morning. I’m Smokey Thomas, president of the Ontario Public Service Employees Union. With me today is our Political Economist, Randy Robinson.

We’re here to talk about the next Ontario budget on behalf of roughly 130,000 Ontarians whose work adds value to the lives and communities of every person in the province – including every person in this room.

Not a day goes by when you don’t benefit from the incredibly varied and vitally important work OPSEU members do.

Taken together, the work of OPSEU members makes Ontario a kinder place, a safer place, and a smarter place. We make it a better place.

The work of the public sector also makes Ontario a more prosperous place.

Overall public spending at all levels of government provides roughly 20 per cent of jobs in the Ontario economy. But here’s an interesting fact: among employed people in Ontario, 32 per cent live in a household where at least one person works in the public sector.

What this means is that, when you cut wages and benefits for OPSEU members, or other public employees, you are cutting into the spending power of nearly one-third of the working people in this province. You’re cutting family spending power.

And that is gutting our ability to create good jobs with good pay in this province.

The Centre for Spatial Economics, a mainstream forecasting firm, has estimated that the economic drag from the current government’s austerity program will reduce the number of jobs in Ontario by 105,000 in 2015 and cut GDP growth by 0.6 percentage points.

Slower growth, of course, means lower tax revenues. It is no wonder that, after five years of wage freezes and benefit cuts across the provincial public sector, the Ontario deficit is actually going up.

Austerity is not working.

It’s time to stop the wage cuts. It’s time to start putting money back into working households. It’s time to boost consumer demand so this province can create more of the good jobs with good pay that this province needs.

Stronger public services are good for people and they’re good for the economy, but right now, our public services are starving – right across the board. It’s time to put money back into those services.

People need them. People deserve them. People depend on them.

And just as importantly, it’s time to raise the living standards of our poorest Ontarians.

Recently, there was a lot of media attention on social assistance because of the SAMS computer system’s difficulties with issuing correct cheques. What we didn’t hear about was just how small those cheques were.

A single person on Ontario Works cannot get by on $626 a month. We need to raise the rates – substantially – for both Ontario Works and the Ontario Disability Support Program. Tiny hikes below the rate of inflation just don’t cut it.

We can afford to care. At present, Ontario has the lowest public spending per capita of any province in Canada. But at the same time, our GDP per capita is at record levels.

There is lots of money in this province. We can afford the public services people need, and expect, from their government in a first-world nation. What we cannot afford is to funnel the wealth of this province to the people who need it least.

The last 20 years in Ontario have seen a massive transfer of wealth from regular people and the public services we depend on to big corporations and the high-income individuals who live off them.

This has happened through tax cuts, and it has happened through privatization.

Much has been said by others about taxation, so I will only say this: at a time when Canadian corporations are sitting on more than $600 billion in cash, we need progressive tax measures that will breathe life back into public services and get some of that dead money back into circulation in our communities.

That money could be creating jobs and improving services. That money should be creating jobs and improving services.

On the issue of privatization, we’ve gone far past bad policy. We’re now into a full-blown crisis.

We all saw the Auditor General’s report. We all know that we’ve paid $8 billion too much for major infrastructure projects because of the government’s “Alternative Financing and Procurement” model. We all know that that money came straight out of the public purse.

In terms of lost money, it’s at least 100 times worse than what happened at Ornge. At the very least it warrants a special investigation by the Public Accounts Committee.

Unfortunately it’s not only infrastructure projects that are throwing away public dollars on privatization.

The government’s policy of “Alternative Service Delivery” is shoveling dollars by the bucketful to companies that are delivering services at higher cost than the public sector.

The excessive costs of contracting out of government IT services, of medical lab testing, of LCBO agency stores, and other services has been well documented. It is costing us hundreds of millions of dollars, each and every year.

Clearly, we need to get privatization under control. That’s why I have proposed legislation to rigorously test proposed privatizations so that bad proposals can be rejected before they do any damage. Under my five-point plan, a new law would require that:

1. No public service will be privatized or contracted out without public consultation and clear evidence that privatization will lead to improved services.

2. Any decision to privatize or contract out a service will not be made without a full and open review by an independent body or individual, who will ensure full cost/benefit analysis and comprehensive social and economic impact studies are conducted.

3. Public sector workers, their representatives and other interested parties shall have standing in the review process.

4. The reviewing body or individual will issue and table with the Ontario legislature a final report with recommendations along with all studies and analysis.

5. In the event that a specific privatization is recommended, employees will have the ability to move to the new employer with existing rights, benefits and entitlements.

I would be delighted to see enabling legislation for this in the budget bill.

This year I’ve purposely shortened my presentation to allow more time for questions. We’d be pleased to take your questions now.