McGuinty-Drummond Austerity Will Kill Jobs, Harm Economy, Steelworkers Warn

TORONTO, Feb. 15, 2012 /CNW/ - The United Steelworkers union (USW), which represents thousands of employees at universities and other provincially funded institutions, questions the Drummond Commission's premise that Ontario must slash important public services.

"The McGuinty government appointed the Drummond Commission to set the stage for cutbacks," said Ken Neumann, USW's National Director for Canada. "But the proposed austerity would damage Ontario's fragile economy and eliminate thousands of jobs."

Drummond posits a $30-billion deficit by making far more pessimistic assumptions than the last provincial budget or most private-sector economists. Since the McGuinty government ruled out any consideration of tax rates, such as reversing recent corporate tax cuts, Drummond proposes to close this projected "gap" by slashing important public services. 

"We are particularly concerned about Drummond's recommendation to terminate or privatize Ontario's Pension Benefits Guarantee Fund, which insures pensions when an employer goes bankrupt," said Wayne Fraser, USW's Ontario Director.

"This self-financed insurance fund is an essential pillar of retirement security for Ontario workers," Fraser said. "Terminating or weakening this fund would threaten the retirement security of tens of thousands of our members and other working families across this province."

The Drummond Commission rightly warns that the proposed Canada-EU free trade deal would significantly increase drug costs for Ontario's health-care system.  

The report makes some sensible recommendations to collect more revenue by removing corporate tax breaks like the resource allowance and cracking down on business tax avoidance.

However, the USW believes the Ontario government also should restore a 14-per-cent provincial corporate income tax rate.

"A good starting point for the McGuinty government would be to stop handing over billions in tax giveaways to profitable corporations," Ken Neumann said.

"Instead, the McGuinty-Drummond plan manipulates a false sense of crisis to impose austerity measures that threaten to harm our economy and kill thousands of jobs."

Wayne Fraser, USW District 6 Director, 416-243-8792; /
Ken Neumann USW National Director, 416-544-5950; /
Bob Gallagher, USW Communications, 416-434-2221, 416-544-5966, /
[email protected] /