Tuesday, September 25, 2018Canada's Leading Online Business Magazine

Ontario Gears Up For A Crucial Election

By Angus Gillespie

Ontario voters will go to the polls for an election on June 7 to determine what party will form the provincial government for the next four years or less. All signs point to it being a vicious battle in the six weeks leading up to that date between Liberal Premier Kathleen Wynne, Progressive Conservative leader Doug Ford and NDP leader Andrea Horwath.

FOR THE PAST 15 YEARS the Liberal party has formed the government in Canada’s most populous province and also the largest economically. First it was Dalton McGuinty who led the party to victory in 2003. Amidst a number of increasing problems, and without any notice, McGuinty suddenly bolted from the position by announcing his resignation in October, 2013. He was quickly replaced by current Premier Kathleen Wynne.

Despite numerous multi-billion dollar gaffes, such as the cancelled gas plants scandal and a soaring debt, the Liberals have managed to find a way to get re-elected. But this time the winds of change seem to have gone from a gale force wind to an all-out Category-5 hurricane and unless Conservative leader Doug Ford self-destructs, it would seem as if he will be the next premier with his party forming a majority government.

It should be noted, however, that self destruction is not beyond the realm of possibility for Ford, because it’s happened to countless other politicians before him and some from within his own party no less. There are political analysts who are still scratching their heads as to how both Tim Hudak and current Toronto Mayor John Tory prior to that managed to lose provincial elections that seemed to be ready for the taking on a golden platter. There were times when the ruling Liberals seemed to be on their knees in very vulnerable positions, but like Houdini somehow managed to escape. It could easily be argued that the Conservatives lost those elections due to horrible miscalculations and missteps more so than any impressive political strategies unleashed by the governing Liberals.

It’s also safe to assume that a good number of voters have become a tad skeptical about the accuracy of polls given that they can end up being way off base. But polls are all we have to get a sense of the collective public’s state of mind going into an election. Wynne and the Liberals certainly hope they are inaccurate because as of this point virtually every poll indicates they are in deep trouble.

Several recent polls reveal the Progressive Conservatives under Doug Ford hold a commanding lead and would be within reach of forming a majority government if the election were held now (as of our May 1 publication). The Conservatives would garner 43% of the popular vote, followed by the Liberals at 27% and the NDP at 23%. The Green Party has 5% support with the remaining 2% voting for other fringe parties or remain undecided. There has been talk of the NDP and Liberals joining forces in a coalition to prevent the PCs from obtaining power, but to this point NDP leader Andrea Horwath has shown no interest — at least publicly — in going down that path.

The bad news doesn’t end there for Wynne and the government. Although the Liberals are listed as being second in the popular vote in most polls, they are projected to finish third in seat count in the Legislature, which if true, would make the NDP’s Andrea Horwath the leader of the Official Opposition.

Multibillion-Dollar Disagreement

The timing of Auditor General Bonnie Lysyk’s report being made public couldn’t have come at a worse time for the governing Liberals. Lysyk says this year’s budget shortfall is a humongous $11.7 billion and not the $6.7 billion figure Finance Minister Charles Sousa forecast at the end of March.

“When expenses are understated, the perception is created that government has more money available than it actually does,” Lysyk wrote in a scathing 27-page pre-election report to the Legislature. “Government decision-makers might, therefore, allocate money to initiatives and programs that is actually needed to pay for expenses the government has failed to record properly.”

Wynne’s only response to the damning report was that she and Lysyk have had a running dispute on the numbers. But given that the Liberals have proven to be less than stellar on sticking to the financial figures they forecast, it’s not hard to believe that many voters are not likely to give their accounting figures the benefit of the doubt.

One of the main reasons for the disagreement focuses on whether or not about $11 billion in the OPSEU and the Ontario Teachers’ pension plans could – or should – be factored towards the bottom line. Lysyk says those two entities should not be considered assets because the government cannot have ready access to the funds.

And, it’s not as if this is a temporary financial drop-off with sunshine on the horizon. In addition to this year’s fiscal mess, Lysyk calculated that the deficit forecast for next year is $12.2 billion — not the $6.6 billion Sousa predicted; and it’s $12.5 billion, not $6.5 billion in 2020-21.

The problem for Wynne and the current government is that they need to essentially discredit the way the auditor general makes calculations. Given the vast overspending and understating of past budgetary shortfalls it’s a mountain that’s likely too high to climb. Arguing with an independent body is not going to gain the government any votes so it would seem more beneficial to focus on policy and platform and hope voters still see merit in continuing in the same direction.

Conservative MPP Vic Fedeli, who served as interim leader prior to Doug Ford taking the reins, has accused the Liberal government of “deceiving the people of Ontario.”

Ford has stated that if his party is elected he will fire Hydro One President and CEO Mayo Schmidt and the entire board of directors. Ford was quoted as saying Schmidt is “Kathleen Wynne’s $6-Million dollar man,” referring to his yearly salary and bonuses, which now add up to a staggering $6.2 million.

“This board and this CEO are laughing themselves to the bank,” Ford says.

However, it’s unclear what Ford could actually do in terms of a major shakeup at Hydro One for the simple fact that the provincial government no longer has majority control, which in itself is a bane of annoyance for many Ontarians. It was sold off by this current government as a means of drawing down the debt. However, it’s a shortterm gain. Hydro One will continue to be a cash cow and selling it is a hard one for any individual with fiscal acumen to understand.

Horwath says she would buy back the shares of Hydro One that the Liberals sold. That all sounds well and good for a soundbite and may draw her a few extra votes; but at what price would she be willing to pay to get those shares back? Stakeholders who now own those soldoff shares and hold them for a King’s ransom, knowing their inherent ongoing value, which will only continue to increase over time.

Meanwhile, a Hydro One spokesperson quickly attempted to quell the controversy brought forth by Ford, saying the amount customers pay to compensate the CEO’s salary is the same as before privatization — two cents on each monthly bill. Regardless of whether it amounts to two cents or $2 is not the point. It’s an obscene amount of money to be paid, and it’s that point that doesn’t resonate with this government, much to the utter dismay of the taxpayer.

Party Platforms

Progressive Conservative

In addition to promise the firing of Ontario Hydro’s CEO and the entire board, Doug Ford has been releasing his election platform in segments, as opposed to outlaying his entire plan all at once. But piece by piece he continues to provide an indication of some of the initiatives he and his party would implement if elected as the new government.

A true fiscal conservative, Ford opposes big government and wants to slash both business and personal taxes. At the front-end of his plan would be to freeze Ontario’s minimum wage at $14 an hour and to eliminate provincial taxes for anyone earning less than $30,000 a year. As of January 1, 2019 the minimum wage is slated to rise to $15 – meaning it will have risen by more than $3 per hour in one year. Numerous small business owners have been left in a quandary saying they simply cannot afford to pay so much extra to their employees. Ford has also promised corporate tax cuts to encourage more investment in Ontario, and a sizable decrease in hydro rates.

Ford, like all his fellow leadership candidates, opposes the carbon tax plan and that could be a big obstacle for the federal government should he become premier. If the next Ontario government doesn’t agree to put a price on carbon, it will have the federal pricing plan imposed on it by Ottawa starting next year. However, Saskatchewan has already said it won’t pay the tax either and is willing to go to the Supreme Court if necessary. The prairie province is largely supported by natural resources including the likes of potash, coal and oil, so the pushback could be enormous.

From a purely financial aspect the Ontario coffers could lose up to $4 billion in revenue if the carbon tax isn’t implemented. Ford’s answer to the shortfall is to find efficiencies at Queen’s Park, saving a minimum of 4 cents on every dollar of government spending.

Ford has repeatedly announced he would repeal, and then review, Ontario’s sex education curriculum, which is important to the social conservatives in his corner.

Part of Ford’s plan would include a moratorium on new energy projects, returning hydro dividends to customers and moving the costs of conservation programs off hydro bills. He says those initiatives would save the average Ontario family about $173 each year on their bills.

“After 15 years of letting Ontario hydro rates triple, the Liberals saw an election coming. They panicked and got desperate. They cooked up the so-called ‘Fair Hydro Plan’ and they paid it by hiding billions of dollars of your money,” says Ford.

On the contentious issue of automobile insurance, the PCs are promising to end “geographic discrimination” while not allowing insurance companies to raise rates in other parts of the province.

New Democratic Party

NDP Leader Andrea Horwath says Ford’s declaration on Hydro One proves he “stands proudly for a privatized hydro system” and says her party’s plan would reduce hydro bills by 30%.

“Mr. Ford has endorsed the Liberals’ disastrous hydro borrowing scheme, which will cause bills to skyrocket by 70% right after the election and add $40 billion of debt for future generations to pay off,” Horwath says. “This comes after repeatedly criticizing the Liberal scheme and the high executive salaries that come along with it.”

It is, however, unclear where Horwath came up with the 70% increase and is assuredly something Ford would say is pure fallacy. Numbers will be skewed in favour of the person or the party and what suits their needs.

At the centre of the NDP platform includes: the creation of a province-wide dental care program with a first-year cost of $670 million; implement universal Pharmacare within two years with a projected annual budget of $475 million.

The NDP wants to establish affordable child care scaled to the income of the parents or guardians, with the average cost projected at $12 per day. Hospital funding would receive a much-needed boost in the arm with an addition $916 million. A more controversial plan would be to cover the cost of drugs and medication of residents undergoing gender transition procedures.

An allotment of $16 billion would be spent to upgrade, build and repair schools while capping the size of kindergarten classes at no more than 26 students.

Horwath’s plan to de-privatize Hydro One is noble, but theory and reality may prove to be vastly different. Reacquiring such an important asset won’t come cheaply and there will be a point where the cost becomes untenable. In other words, easier said than done.

The NDP agrees with the Liberals that the minimum wage should increase to $15 per hour as of January 1. The party also says it would invest $180 billion in infrastructure and expand the number of automotive and other manufacturing sector jobs in the province.

Drivers would get the 15% savings in auto insurance promised by the Liberals, but never transpired. Benefits would also be protected.

Liberal

Premier Wynne and Finance Minister Charles Sousa have revealed billions of dollars in spending that will form the backbone of the Liberal re-election efforts. Some of the major initiatives include: $2.2 billion going towards free daycare for children from the age of two to kindergarten; an additional $822 million for hospital expenditures; expanded mental health services to the tune of $2.1 billion over four years; $575 million for free prescription drugs for all seniors; and $300 million earmarked for special needs education. There is also major investment in homecare.

“My plan for care & opportunity is a direct response to what I hear from people. From free preschool child care to the $15 minimum wage, free tuition and OHIP, we’re easing the burdens people face every day. And it’s having a positive impact on the economy,” says Wynne.

The Liberals increased the minimum wage from $11.60 an hour to $14 per hour as of January 1, 2018 and it will rise again to $15 this coming January 1. The minimum wage had been frozen at $6.85 per hour between 1996 and 2003, but increased annually between 2004 and 2010, and again in 2014, 2015 and 2016.

The government recently announced the Fair Auto Insurance Act as a means of lowering premiums. The government blames insurance fraud as being a major contributor to rates being so high. The Financial Services Commission of Ontario (FSCO), the government body that oversees auto insurance, will calculate premiums each case based on a number of factors to determine the risk level of the individual being covered.

While infamously selling off 60% of Hydro One to generate capital to help pay for skyrocketing debts, the government has faced a wave of criticism in focusing so intently on green energy strategies as outlined in their Green Energy Act, that they spent billions in propping up an emerging industry that still hasn’t proven it can stand on its own in the market. The idea of going green is something most would endorse, but the rapid pace at which they’ve attempted to implement it when it clearly wasn’t able to handle the load is what has created a great deal of backlash.

In recognizing her back is up against a wall, Wynne has also taken direct aim at Ford and has compared him to Donald Trump. She has notably spent far less time and energy attacking Andrea Horwath’s policies, likely because she recognizes Ford and the PCs are the main obstacle in her party’s path to being reelected. The vitriol between Wynne and Horwath may increase, but it’s likely to pale in comparison to Wynne versus Ford in the coming weeks.

“Doug Ford sounds like Donald Trump and that’s because he is like Donald Trump. Ugly, vicious, a brand of politics that traffics in smears and lies,” says Wynne.

Ford, never one to shy away from a good scrap, has launched his own attacks on a number of occasions, accusing Wynne of ‘cronyism’ and corruption.

“If Kathleen Wynne tried to pull these kinds of shady tricks in private life, then there would be a few more Liberals joining David Livingston in jail,” Ford says. “She’s done nothing but destroy this province.”

“She’s running in a different country against a different candidate because she can’t defend her own record,” added PC MPP Lisa MacLeod.

June 7

There is a percentage of the voting public will cast their ballots primarily based on personality and not political capabilities on June 7.

An online poll conducted by Leger reveals most people believe Ford would make the best premier, followed by Horwath with Wynne bringing up the rear.

It would seem the election will be won based on the party that is able to secure the most votes in the centre of the political spectrum – those who are either soft right or soft left in their political leanings. Card-carrying Liberals, NDP and Conservatives won’t change their votes regardless of what comes out during the campaign. However, that large undecided contingent in the middle is who will determine the province’s next government.

Campaigning will be at a fever pitch for the entire month of May and the first week in June after which we’ll find out who will lead the Legislative Assembly of Ontario.

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