class of february 9 – budget simulation briefing scenario: the ontario ministry of finance is...

Class of February 9 – Budget Simulation Briefing

Scenario: The Ontario Ministry of Finance is anticipating that, given current policies and economic forecasts, Ontario’s deficit will be $25 billion in 2009-10 and $21 billion in 2010-11. In preparing its spring 2010 budget and anticipating the October 2011 election, the McGuinty Government would like to show progress towards a balanced budget without drastically cutting public services.

Therefore, a privatization secretariat has been established to make recommendations to Cabinet regarding possible privatization of the Liquor Control Board of Ontario and Ontario Lottery and Gaming Corporation. Recommendations should include a forecast of revenues received in the 2010-11 fiscal year from privatization as well as revenue lost in subsequent fiscal years. The privatization secretariat should discuss market structure (as both entities are currently government-created monopolies) and public policy issues, such as regulation of addictive behaviour by both adults and adolescents.

Budget Simulation

Government departments will be asked to produce a total of $3 billion in savings in fiscal 2010-11 through program cuts or user fees. This represents approximately 5 % of base spending, excluding one-time stimulus programs and interest on public debt. Government departments are to propose cuts in their own programs or user fees for their services to contribute to this total.

Budget Simulation RolesThe following teams of two students :• Premier McGuinty and chief of staff Steeve Jamison [must have]• Minister of Finance Dwight Duncan and Deputy Minister Peter Wallace

[must have]• Minister responsible for privatization and privatization secretariat [must

have]• Minister and DM of Health and Long-Term Care [must have]• Minister and DM of Education [must have]• Minister and DM of Training, Colleges and Universities [must have]• Minister and DM of Transportation [must have]• Minister and DM of Children and Youth Services [must have]• Minister and DM of Community and Social Services [must have]• Minister and DM of Energy and Infrastructure [must have]

Budget Simulation Roles• Minister and DM of Community Safety and Correctional Services [must

have]• Minister and DM of Environment [must have]• Minister and DM of Municipal Affairs and Housing [must have]• Minister and DM of Agriculture, Food and Rural Affairs• Minister and DM of Culture• Minister and DM of Government Services• Minister and DM of Labour• Minister and DM of Natural Resources• Minister and DM of Northern Development, Mines, and Forestry• Minister and DM of Research and Innovation• Minister and DM of Tourism

Resources

• Departmental websites: access from “Explore Government” on Ontario site

(http://www.ontario.ca/en/residents/index.htm)• Fall Economic Statement:(http://www.fin.gov.on.ca/en/budget/fallstatement/

2009/paper_all.pdf)• Detailed spending by dept, Ontario Ministry of

Finance, 2008-09 public accounts, vol. 1 (http://www.fin.gov.on.ca/en/budget/paccts/2009/09vol1eng.pdf)

Budget Simulation• Deadline of 9 am Monday, Feb. 15 for two-person teams to apply for roles

(by sending me an email). Indicate first, second, third choices. I will email people their roles on Feb. 16. I may add another person or combine teams for the more complicated roles (Privatization, Health, Finance).

• Department teams to send Premier, Minister of Finance, and Prof. Borins a 5 page (max.) doubled spaced memo by 5 pm Friday, Feb. 26 with their proposals for program cuts or user fees to contribute to the $ 3 billion in savings. The memo should show how the savings would be achieved, the percentage of your budget they represent, why the programs are low priority, and why any proposed user fees would be administratively feasible and politically acceptable. Memo may have appendices (for example tables or calculations) that are in addition to, i.e. do not count within, the 5 page limit.

Budget Simulation

• Privatization Secretariat to send Premier, Minister of Finance, and Prof. Borins a 10 page (max.) doubled spaced memo by 5 pm Friday, Feb. 26 with recommendations for privatization, discussion of policy issues, estimate of budgetary implications in short and long term. Memo may have appendices (for example tables or calculations) that are in addition to, i.e. do not count within, the 10 page limit.

Budget Simulation• Spending department memos to be reviewed by Premier and Minister of

Finance over the weekend. Minister and DM of Finance prepare evaluation of proposals and recommendations to distribute at beginning of simulation on Tuesday March 2.

• Premier to chair meeting (in MW 324) to discuss proposals on Tuesday, March 3. Ministers sit at cabinet table and DMs behind them. DMs may speak on factual but not policy issues, if asked by their minister. (Note: students who have not yet made presentations in class should play role of minister.)

• Premier and chief of staff to prepare memo recording the decisions taken and rationale, due to Prof. Borins at the end of the day Friday March 5.

• Professor Borins will present a debrief of the simulation in class on March 9, as well as a discussion of federal government Speech from Throne and Budget.

Class of February 23

• Mid-terms returned and discussed• Preparation for budget exercise (question and

answer)• Watch The Thick of It in class (like Yes Prime

Minister 20 years later and with bad language)