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Lecture 6: Budgets Part Two
Ontario and its future Budgets
- The wide-ranging effort by Drummond, a former TD Bank economist, will prescribe ways to
radically transform all manner of government services as Ontario faces a record debt and
interest payments of $10 billion a year almost one-quarter of the annual health budget.
Highlights
- most government ministries face steep cuts as much as 30 per cent
- things will have to be done differently
- there will be “lots of anger.”
- more services will be moved online.
- College and university courses may be taught in schools now vacant because of declining
enrolment
- Professors will be teaching more classes and spending less time on research. Some universities
may be turned into teaching factories, like community colleges.
People don’t thank you for taking things away!
- “The attitude was always, ‘We’re Ontario and the rest of you guys are running Popsicle stands.’
- smaller jurisdictions have to innovate because they never had deep pockets,” said Decter.
- Former Progressive Conservative premier Ernie Eves said Friday he doesn’t envy his Liberal
successor, Dalton McGuinty, heading a minority government and fighting the inevitable wars
with entrenched interests to make the changes needed.
- “Part of the any government’s consideration is, are they going to be able to sell this to the
public?”
Budgets as a Management Device
- Budgets are also a management device. Budgeting was actually invented in the 19th century by
governments. As unbelievable as it may sound many 19th century business enterprises operated
without budgets including major endeavours such as the transcontinental railroads.
- Line budgets were the first and most rudimentary form of budgeting. They focus on
expenditure and provide a policy comparison usually constructed as an incremental-based
review of previous year's budget.
Line Items
- The works well with relatively small, simple organizations but has its problems:
o what changes should be made for the future?
o what has been accomplished by the budget?
o how can we measure any accomplishment? (measurement is critical for comparison
cost/benefits)
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