Premier Kathleen Wynne says she will reintroduce the same budget next week as she tabled in May. Let’s hope she does more than that. The July 14 budget is a chance for her majority government to move from election mode to thoughtful implementation.

The overarching question is: How will Wynne finance her “activist agenda” and still balance the budget by 2017-18? The May budget mentioned asset sales, expenditure reduction and wage constraint without much supporting detail. It also used unrealistic assumptions about revenue and economic growth.

The credit rating agencies will be looking closely at next week’s fiscal plan. Moody’s recently affirmed Ontario’s current rating, but downgraded the outlook from stable to negative.

Moody’s warned the province that continued accumulation of debt could jeopardize their rating and thus increase borrowing costs. The interest on the current debt is a staggering $11 billion a year — the third-highest expenditure behind education and health care.

The prospect of increased borrowing, deficits and taxes can also have a dampening effect on business investment and job creation. Businesses in Ontario, faced with an increase in minimum wages, a new mandatory pension plan and higher income taxes, aren’t thinking about new investments in capital and labour.

If Ontario is to gain a significant share of the modest economic growth that lies ahead for Canada, the Liberals will have to exercise greater fiscal discipline. Next week’s budget should begin that process.

Half of the province’s budget currently goes to public sector wages and benefits. If Wynne is to balance her budget on schedule she has to hold to her election promise:

“No new money for compensation increases.”

The last time we heard that refrain it was a “pay freeze” for teachers. That didn’t happen. We need to know more about how newly minted Treasury Board President Deb Matthews will deal with the powerful and soon-to-be-pouting public sector unions.

Governments that try to buy jobs by luring new business investments have at best a checkered record. It’s hard enough for experienced venture capital firms to pick more winners than losers. Wynne should roll out her new $2.5-billion Jobs and Prosperity Fund carefully. Back-end loading its cash flow over the next few years would help with deficit reduction.

Over 60 per cent of the province’s public infrastructure is more than 50 years old. The $130 billion, 10-year infrastructure plan was a welcome election commitment. So was the promise to make future infrastructure investments based on “rigorous business case analysis.”

Not all the dozens of transit, road, school, hospital, college and university projects mentioned during the election can be priorities. Next week is an opportunity to begin using the business case criteria to identify the highest return projects for early implementation. This is another area where investments can be phased in slowly until the operating deficit is eliminated.

The Liberals have set up a study group, led by former TD president Ed Clarke to look at unlocking and maximizing the value of government assets like the LCBO and Ontario Power Corporation. But the Liberals seem tentative about this Tim Hudak idea.

Next week Wynne should make clear that the group’s job is to recommend how the value is to be extracted, not just whether it’s a promising concept. The financial results could be a major contributor to balancing the budget.

Finance Minister Charles Sousa began his May budget speech by saying the competitive business environment he grew up in helped prepare him for his role today. But there was little evidence of that influence when it came to identifying any major expenditure cuts.

During elections all parties are loath to mention specific program cuts. But the election is over. It’s time to commit to more than “we will continue to carefully review spending.” Taxpayers, businesses and rating agencies know there is room in the province’s $130-billion operating budget to cut lower priority programs in order to finance new initiatives.

Even the federal Parliamentary Budget Officer says Ottawa is shortchanging Ontario $641 million in transfer payments annually. Wynne’s majority strengthens her leverage with a weakened Stephen Harper. Seeking federal fairness should be a centrepiece of next week’s fiscal plan.

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May’s election budget was long on spending, short on how to balance the budget. Next week is an opportunity to lay out a clearer deficit reduction path and demonstrate a stronger commitment to fiscal restraint.

R. Michael Warren is a former corporate director, Ontario deputy minister, TTC chief general manager and Canada Post CEO. r.michael.warren@gmail.com

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