NOW COMES THE HARD PART
Relief is here, premierdesignate Doug Ford told his raucous new caucus at Queen’s Park on Tuesday morning as they prepare to take over the provincial government next week.
Ford gave a quickie version of his stump speech from the Progressive Conservatives’ successful campaign before closing the meeting of six dozen Tory MPPs, most of them raw rookies, to outsiders.
“We’ll be the envy of North America when it comes to business, when it comes to creating jobs, when it comes to living in the greatest place on Earth, and that’s Ontario,” he promised. Let’s take stock. Ford’s big promise is jobs, especially manufacturing jobs. Ontario’s unemployment rate is 5.7 per cent, nearly the lowest it’s been in a generation, but with big disparities between urban and rural areas. Manufacturing employment specifically is down about 300,000 jobs over the past 15 years.
Reversing this will not be easy, if it’s possible at all.
Manufacturing suffered more here in May, with 12,000 jobs in the sector disappearing from Ontario. Other industries more than made up the loss, but “employment in (manufacturing) reached a five-year peak in December 2017, and has been trending downward in 2018,” Statistics Canada reported. Alberta, Quebec, New Brunswick, British Columbia — all lost manufacturing jobs in May, with other provinces posting tiny increases.
Ford promises to cut Ontario’s already low corporate taxes to slip them below U.S. tax levels, which the Republican-led government there lowered last fall.
The hundreds of thousands of manufacturing jobs we retain depend a great deal on trade with the U.S., which President Donald Trump is torpedoing. The animosity only really started during the campaign, and Ford doesn’t have a real response yet, though he’s promised to stand with the federal Liberals as they marshal Canada’s response.
Ford will have to decide what sort of aid his government will give the workers whose jobs Trump has targeted, starting with steel and aluminum and potentially expanding to automakers. If the tariff tiff is temporary, that’s one thing. If it lasts a long time, help for businesses — manufacturing businesses — that can’t survive without access to the American market could turn into corporate welfare.
If cutting taxes causes the economy to roar, that’ll help with the second big challenge: getting Ontario’s finances in order.
A major bond-rating agency, Fitch, put a negative outlook on Ontario’s credit rating at the end of last week. This isn’t the same as a downgrade, but it signals that Fitch thinks a downgrade is in the offing.
This is mostly on the Liberals, whose finances the Tories are inheriting: Fitch doesn’t like the last budget’s plan to borrow $6.7 billion this year and keep borrowing every year into the mid-2020s. The Liberals balanced the budget, more or less, and then they threw that work away.
But it’s partly on Ford, who ran on promises to spend money and cut taxes and swore he’d balance the budget with efficiencies he wouldn’t spell out. Fitch noticed.
“The willingness to exercise fiscal restraint and build a higher margin of fiscal flexibility in advance of an eventual economic slowdown is uncertain under incoming leadership and the province will remain challenged by an elevated debt burden,” the agency’s explanation for the warning says.
The head of Ontario’s public service, Steve Orsini, sent a preliminary instruction Monday to the bureaucratic heads of all the province’s departments to stop all discretionary spending, right down to buying coffee for staff meetings. Stop “any expense that can be placed on hold without putting government service delivery or the public at risk,” Orsini directed.
In the scheme of a $150-billion budget this is penny-ante stuff, but it does set a tone. The challenge is being thrifty without being so miserly that good people don’t want to work for the government because literally any private employer is more attractive.
And on Tuesday, the federal health authorities released national numbers on opioids, confirming that the overdose crisis worsened last year. Ontario’s rate of opioid overdoses in 2017 was only exceeded by British Columbia’s and Alberta’s among the provinces.
In Ontario, 1,125 people died of accidental opioid overdoses last year, the feds say, up from 726 the year before.
Ford’s promise is to increase funding for mentalhealth care, of which addictions treatment is a component, by $190 million a year, which isn’t very much. He’ll also have to decide what to do with Ontario’s supervised drug-injection sites. He’s criticized them as enabling addiction but toward the end of the campaign he moderated and said he’d seek expert advice.
The Tories get to enjoy the post-election pause while nobody at Queen’s Park is really responsible for anything, but this is serious, hard, heavy stuff that will not respond to slogans.
The Ford government will take over on June 29, and reality will hit hard.