Ontario Election Deficit/Revenue/Expense Estimator

See bottom of article for updates — last updated May 31 12:00PM

Comparing the spending and expense promises of the four major Ontario parties is difficult, in part because the assumptions they use are all different. In order to get an apples-to-apples comparison, I’ve created a small Google sheet comparing the expenses of the four parties. It is available for viewing here:

There are likely errors here, so if you see anything that looks strange, please point it out to me (and use at your own risk). I made the decision to release this quickly and crowd-source the analysis, rather than spending weeks on it to make sure everything is bulletproof.

The methodology here is simple: Take the baseline revenues and expenditures that each party is using, apply their changes, then apply unified values for interest expense, reserve and (in one scenario) AG accounting. These unified values can be found on lines 43–45. For the AG numbers, there’s no 2021–22 estimates, so I re-used the 2020–21 numbers. A party could decide to adopt some of the AGs accounting recommendations and not others, so I probably should break this down further at some point.

Lines 8–13 contain deficit estimates for the parties, using the government’s accounting methods, and lines 17–22 contain deficit estimates using the AG’s accounting methods. Note that in the latter, for the final 3 years of the mandate, deficits are in the $10+ billion range, regardless of the election of the outcome.

Lines 26–31 and 35–40 contain revenue and expense estimates respectively for the parties.

Now some details specific to the parties:

GREENS: I haven’t had a chance to go through the Green numbers, though it shouldn’t be hard to do, since they’ve released some. I just need to figure out what they’re using as a baseline, and sort out which of their promises are expense lines and which are revenue items.

LIBERALS: Their baseline is Budget 2018, so their changes from baseline are $0 (see lines 63 and 70) since they’re using the Budget as their platform. I’ve spent a fair bit of time this weekend going over their numbers, and I don’t see anything that stands out as wrong. Of course, further analysis may uncover something. That said, since they had an entire Ministry to put this together, they’ve got a pretty substantial structural advantage.

NDP: The NDP’s baseline is Budget 2018 with a bunch of stuff carved out, so it looks like a hybrid of Budget 2017 and the Fall 2017 economic update (this carve-out was the source of a LIB-NDP dispute last week). Then the NDP’s spending and tax promises are added, along with the $430M-$668M of specified “spending reallocations” from Page 97 of their platform (aka “cuts” or “efficiencies” or whatever euphemism you would like to use).

The numbers on this sheet fix the sign error their platform made on the reserve (which caused deficits to be understated by $1.4 billion per year). Even with that change, they have the smallest deficits of the parties, though I wouldn’t put much stock in the Tory numbers (we’ll get to that in a moment). As with the Liberals , I spent a fair bit of time this weekend going over their numbers, and I don’t see anything that stands out as wrong that hasn’t already been discovered. Of course, further analysis may uncover something. Although it’s embarrassing to make mistakes, these mistakes were only found because the NDP were so transparent in the first place, and they deserve credit for that.

TORIES: I have tried my best to cost out the Tories promises, but there is not much to work with. The problems:

  1. The Tories haven’t said what they’re using as their baseline.
  2. The Tories haven’t costed out a lot of their promises.
  3. The Tories haven’t said how quickly they’ll implement their promises.

For point 1, I give there different scenarios, though there’s more possible ones. Scenario 1 is that they follow their old platform (the People’s Guarantee) and use the 2017 Fall Economic update as their baseline. This strikes me as the most likely scenario. Two other scenarios: They use Budget 2018 as a baseline (highly unlikely), or they would be using the same carve-out method as the NDP (which ends up looking pretty similar to the 2017 Fall scenario).

For point 2, a lot of the promises are recycled from the People’s Guarantee, which allows for re-using that costing. For other items I’m relying on media reports. I’ve left out any vague promises entirely, which include not just “efficiencies” but also most transit spending promises. Any infrastructure project is tricky to cost, because not only do you need to know when the project starts, you need to amortize the spending (since Ontario doesn’t use cash accounting).

For point 3, I assume that the promises get enacted until Budget 2019. I can’t think of a better way of doing this. We’re really lacking information.

Right now I am projecting the Tories to run the largest deficits, but that’s a function of the garbage in-garbage out nature of the estimates. We need better information from the party to be able to get decent estimates.

More to come. Please send suggestions, corrections and additions to @mikepmoffatt.

UPDATE 1: I made a small change to the Transit/Subways line on the Tory costing sheet. Before the entry was 136M/136M/136M. I now have it at 136M/183M/183M. The values come from the “New Subways”, “Funding Scarborough Subway Cost Escalator” and “WIFI on GO Trains” promises from the People’s Guarantee. The 136M v. 183M mistake was mine.

The Transit part of the Tory promises is by far the hardest to cost. My sheet has both been criticized for not including unnamed “efficiencies” (which would lower the Tory deficit) but also criticized for not including billions in transit spending (which would raise the Tory deficit). I made the decision at the outset not to include vague and impossible to cost promises and I’ll stick with that decision. Someone else may want to take a stab at including these in their work; I’d be grateful for such an analysis!

UPDATE 2: The Tories have aggregated many of their promises into a document called For The People — Plan for Ontario, which is available at: https://www.ontariopc.ca/plan_for_the_people

This does give additional information on some of the Tory tax and spending promises. I’ve aggregated those promises onto a separate tab on the costing sheet. From a dollar point of view, the biggest change is that their personal income tax cuts don’t kick in until 2020–21; I had them kicking in a year earlier. Below is the total cost of their promises from the Plan for Ontario, with the number in brackets representing my earlier estimates.

2019–20: 4.872B (6.099B with the income tax cut, 4.730B without)

2020–21: 7.231B (7.150B)

2021–22: 7.258B (7.272B)

I feel more confident in the spreadsheet (though there’s still a lot we don’t know) given how the two methods give pretty similar results.

A couple of other things to note in the Plan for Ontario:

  • There’s no specific estimates on the size of “efficiency” savings. No $6B or 4% or some of the numbers thrown around. Only reference is: “Efficiencies exist all across the government, whether it is how different agencies and ministries purchase goods or how they deliver services.” This makes me feel better about my decision not to include an “efficiencies” estimate on my spreadsheet.
  • On eliminate the deficit, the new promise is to simply “[r]eturn to a balanced budget on a responsible timeframe.”

UPDATE 3: Made a small change to the “Plan for Ontario” numbers. I had written “Increasing Autism Funding” as $100M/yr. The correct Tory numbers are $100M over 4 years, so I’ve corrected the mistake. Thank you to the two eagle-eyed readers who found it! There’s likely other mistakes lurking in the background, so if you see any, please send them my way.

I’ve also updated the “Deficit Estimator” tab to include numbers from both the “Plan for Ontario” and for my earlier Tory numbers. Doesn’t change too much, other than in 2019–20 where I had the Tories implementing income tax cuts; their new website suggests that this won’t happen until 2020–21. Don’t take the 2018–19 numbers too seriously. I’ve assumed that the Tories won’t be able to implement their promises this budget cycle. They’ll likely be able to implement quite a few of them; problem is I don’t know which ones.

The question I’ve been getting the most often is “how large will the Tory deficits be”? Trying to calculate a solid answer on this is trying to nail jello to a wall, since there’s so much we don’t know. We don’t have numbers on all the promises (such as transit infrastructure). We don’t have numbers on “efficiency” savings (any reference to $6B or 4% has been dropped in the new platform). We don’t know how quickly spending will be rolled out (many promises are of the $X over Y years variety). And most importantly… we don’t know what the Tories are using as a baseline. All promises are of the “we will spend more on this” or “we will collect less on that”. But more or less relative to what? Relative to Budget 2018? Budget 2017? The Fall Fiscal Update? If anyone can find out the answer, please send it my way!

UPDATE 4: Twitter user @bluser12 asks: “Where did you get the figures for LTC beds? They’ve promised to build 15k in 5 yrs at a cost of 62k per bed to operate. Even if 5000 are built in 4 years, that’s still an extra 300M.”

He’s right. The “Plan for the People” gives the following cost for this intiative:

“ Building New Long-Term Care Beds — Capital costs amortized over duration of asset, total per year cost is $62,000 per bed once operational.”

Hard to suggest the platform is “fully costed” when we don’t have details on the yearly cost of this initiative. I had meant to point this out on the sheet and assign it a cost of $0 since we don’t know. Unfortunately I carried over the cost from my “Tory Promises” tab, which had associated costs of $25M in 2020–21 and $52M in 2021–22, based on a piece at Global. I’ve since changed these figures to $0.

That doesn’t change the deficit numbers too much, but I’d like to be as accurate as possible. Point remains — we have no idea what this initiative will cost.

UPDATE 5: I’ve had enough people ask me “but what happens to the deficit if the Tories cut program spending by 4%” that I decided to add it to the deficit estimator, even though the 4% commitment is absent from the “Plan for Ontario”. The sheet is now showing closed to a balanced budget under the government’s accounting methods, but still significant deficits according to the Auditor General’s. I can’t stress enough that it is a really rough estimate, because there’s so much we haven’t been told.

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