There will be no asset sales announced in this year’s budget despite earlier musings that key corporations such as the Liquor Control Board could be sold off to deal with the province’s nearly $25-billion deficit, but future deals are still on the table, Finance Minister Dwight Duncan said Friday.
“We won’t be selling an asset that we own in this throne speech or budget,” Duncan told a business audience during a lunchtime speech at the Canadian Club in Toronto.
“We’re certainly not going to rush anything and we’re not going to do without what I would call a very robust and meaningful public consultation.”
But while Duncan ruled out selling off a major Crown corporation as an immediate knee-jerk reaction to the deficit, he also left the door open to making a sale down the road, or coming up with some alternate solution such as a leasing agreement.
“We will continue to examine whether our government businesses could be unleashed to provide new jobs and economic opportunity for Ontario families,” he said.
He provided no details about how the government would determine the value of the sale of an asset like Hydro One or the Ontario Lottery and Gaming Corp., saying he will be looking at other countries where privatization has been successful.
Duncan notes that it was a mistake for the previous Conservative government to sell Highway 407 to balance the province’s books in 1999, for instance, because it took away the province’s ability to regulate its price.
But NDP finance critic Peter Tabuns wasn’t convinced the government learned any lessons from previous privatizations. He said any sale would provide a one-time gain but ultimately result in a loss of revenues.
“The finance minister is being very cute today by avoiding the word ‘sale.’ But if you remember, the 407 ETR – a privatization that really irritates people in Ontario – was not an outright sale, it was a lease, just as the nuclear power plant at Bruce is a lease,” Tabuns said.
“These are revenue generators for the province of Ontario. Selling off something that makes money for you doesn’t make sense.”
Duncan has been tight-lipped about what other ways the province is considering to deal with the deficit, but he said Friday that this month’s budget will lay out a plan to return to balance.
Economists agree there are only two options for the Liberal government as it tries to come to grips with its record deficit: increase taxes or decrease services.
The province has floated several other options in recent months, including unpaid days off for civil servants. But so far, Duncan hasn’t spoken strongly for or against any of those choices.
“We will not put economic growth at risk by cutting too much too soon, threatening job creation and growth, nor will we proceed with spending as if there is no deficit,” he said.
“We will continue to make responsible choices – and at times, difficult choices.”
The Liberals have in the past raged against previous Progressive Conservative governments for trying to privatize electricity. But McGuinty now refuses to rule out a sale of Hydro One, Ontario Power Generation or any other Crown corporation, saying the recession has changed things.