'Governments do not need to be a passive investor or a landlord': Sousa
Finance Minister Charles Sousa. (Dave Abel/Toronto Sun)
Ontario will “sweat” public assets to help the province meet its deficit reduction targets, Finance Minister Charles Sousa says.
Sousa will reintroduce his provincial budget Monday as doubtful rating agencies look over his shoulder, concerned that the provincial government will not be able to balance the books as promised by 2017-18.
If the government’s credit rating is downgraded as a result of that pessimism, then the province would be charged higher interest rates when borrowing money.
“I’m cognizant of those issues; I’m the one expressing them and I’m the one that’s also suggesting that we can’t put our heads in the sand, that we’ve got to take corrective measures,” Sousa said. “This budget speaks to those measures.”
Following a major pre-budget speech to the Empire Club of Canada Thursday, Sousa emphasized that his government has been aware for some time that revenue projections turned out to be too optimistic.
One of the key ways that the government intends to fill that funding gap is to maximize or “sweat” profits from large public assets such as Hydro One, Ontario Power Generation and the LCBO.
On the selling block are GM shares purchased by the government in the bailout of the auto sector following the 2008 economic crisis.
Properties owned by the provincial government or its agencies, particularly those in Toronto, could be sold, he said.
“Governments do not need to be a passive investor or a landlord,” Sousa said.
Sousa said he’s also addressing the issue of “revenue leakage” such as the underground economy.
The Liberals’ majority in the Ontario legislature assures rating agencies that the government can move forward with its plans, he said.
Progressive Conservative finance critic Vic Fedeli said the proceeds from the sale of assets should be set aside for a one-time extraordinary expense, not used to paper over an ongoing operating deficit.
Fedeli noted the government, despite its stated desire to get out of some of its landlord obligations, is actually expanding its real estate holdings with the pending purchase of a faltering downtown project, the MaRS Centre Phase 2 building in downtown Toronto.
The Ontario PCs earlier released confidential documents that exposed the MaRS deal which would see taxpayers bail out a private company and install bureaucrats in the pricey skyscraper.
Sousa said taxpayers will not lose money on the MaRS deal.
NDP finance critic Catherine Fife said the government’s decision to bring back the same spring budget that drew a warning from Moody’s Investors Service is irresponsible when the only added revenue source is the sale of important public assets.
“I think that Liberals are desperately trying to play a bait and switch game here with the revenue streams in the province of Ontario,” Fife said.