The mythical “fully costed platform”

Ontario Election Update

The Ontario PC Party published its 5 Point Plan which, naturally, has 10 points and was met with great gnashing of teeth and rending of garments from the usual quarters.

“It’s not fully costed,” screamed pundits. “It’s incomplete,” pronounced one Liberal economist. It was complete enough, however, for that very same economist to conclude Ford’s platform would produce massive deficits much greater than those of the NDP or Liberals. I have to wonder if he was the same economist who told Trudeau “the budget will balance itself.”

Dr. Mike P. Moffatt of Ivey Business School calls Ontario PC platform “incomplete” … then he graded it anyway.

Imagine my disappointment, when I discovered this learned economist was a scholar from my very own alma mater, the Richard Ivey School of Business at Western University. On it’s website, Ivey crows about Dr. Mike P. Moffatt’s “… most recent role as an economic advisor to Liberal leader Justin Trudeau.” So, hardly an unbiased examiner.

Moffatt tweeted that the PC platform was “incomplete.” But, that didn’t stop him from estimating “… that the PCs could run a deficit anywhere from $5.8 billion to $12.7 billion in 2019-20, depending on what numbers they start out with, with the Liberals at $6.6 billion and the NDP at $5.5 billion.” according to the Toronto Star.

The Star continued “However, according to (Moffatt’s) work, the Tories end up with the highest deficits over a four-year mandate. By 2021, the PCs would have a $7.6 billion to $12.9 billion deficit, the Liberals $5.6 billion and the NDP just over $5 billion.”

Pretty damning conclusions based on “incomplete” evidence. If I’d ever handed in conclusions based on “incomplete” evidence when I studied at Ivey, I’d probably never have graduated. I guess times, and standards, and professors, have changed.

Who’s right and who’s wrong?

Everybody’s wrong.

What the Tories published is the same thing the NDP and Liberals published – a platform. For those who don’t know, platforms are bullshit sprinkled with marketing dust. I say this as someone who’s helped develop two of them – both winners. The Ontario PC platform, exactly like its Liberal and NDP counterparts, bullshit. It’s based on made up numbers. Why? Because the opposition parties have no idea what the government’s books look like. Normally, the incumbent party would have a huge advantage, but not this time. Ontario’s Auditor General and the parliamentary Financial Accountability Officer have both reported the government’s 2018 budget and fiscal forecast is bullshit. So, even the government doesn’t have a clue what shape the province’s finances are in.

If you have three buckets and you don’t know how much bullshit is in any of them, how can you know which bucket has the most bullshit?

You can’t.

Is it fully costed?

Sure. Why not? There is no standard definition for “fully costed platform,” so who’s to say it isn’t? The Ontario PC Party spokesperson, Melissa Lantsman explained, “Every promise we’ve made is costed in our plan.” There’s a price listed next to most of the promises. Sometimes, there’s even a general explanation for where the money will come to pay for it. “Everything lists a cost,” is as reasonable a definition of “fully costed” as any other.

Is it a spreadsheet? No. Is it a fiscal projection? No. Should it be? That’s for you to decide on June 7.

In 2010, for the Rob Ford campaign, I produced a very detailed 4-year budget and financial projection based on the status quo Toronto budget and adding in the impact of Ford’s campaign promises – based on our best estimates of what those would be. All the numbers added up nicely. But, our assumptions didn’t last beyond election day. Because, we didn’t know what we didn’t know. For example, we had assumed based on published reports that staff attrition at city hall was six per cent annually. Much of our fiscal plan was based on a plan to reduce staffing at half the rate of attrition, i.e. by three per cent per year. It turns out, published reports were wrong. City staff attrition was, in reality, significantly lower than three per cent. We had to find another way to save money. So, what?

So, even the most well-intended platforms are based on best-guesses. If you don’t know what Ontario’s current financial position is – and not even the government seems to know that – it is impossible to know what changes to spending or revenues will produce a surplus or deficit. To say otherwise, is at best misleading and, at worst, lying. Dr. Moffatt – like everyone else who has drawn conclusions about the three party platforms – is trying to convince you he knows the unknowable. He doesn’t. They don’t. Because, they can’t.

So, what use is a platform anyway?

A platform is whatever the candidate says it is. And, you should take all of them with a heart-stoppingly massive shaker of salt. What you can learn from a platform, however, is what the party or candidate thinks is important. Where their priorities lie. And that, gives you a good idea what their decisions will be like, if elected.

The NDP platform suggests their government will respect unions above all other, work to create more taxpayer-funded social services, and pay for it by issuing debt, raising taxes on corporations, carbon and anyone they decide is “rich.” For those of you who like numbers, the NDP  include a 4-year high-level fiscal forecast beginning at page 94.

The Liberal Party’s “fiscal plan” means something, to someone. I hope.

The Liberal platform suggests their government will pursue more of the same, broader and deeper taxpayer-funded social services paid for by new carbon tax-like revenues and increased debt. For those of you who like numbers, too bad, there is no fiscal forecast in the Liberal platform. But, there is a pretty bar graph that means… something, I guess… to someone, I’m sure.

The PC platform suggests their government will try to reduce taxes on people and corporations, eliminate carbon pricing, improve healthcare, streamline government bureaucracy and pay for it with debt issuance and aggressive cost-cutting efforts. The PC’s include a cost for all (most) of their proposals, but no spreadsheets or graphs. They do, however, go into detail on 10 of their 5 priorities. So, bonus.

The Green platform doesn’t matter.

All the parties are counting on the economy to improve significantly, creating new tax revenues for government.

Your decision should be based on…

Whose priorities you think are best and whom you trust most to work hardest to achieve them.

 

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