Is This the End of Trying To Balance Ontario's Budget?

The Ford Government announced a major cabinet reshuffle this morning and it is obviously an attempt to reboot and rebrand a government that has run into difficulty in terms of its popularity – and particularly the popularity of the “Populist” Premier who obviously did not take kindly to be booed at this week’s Raptor’s Celebration. All politicians I believe have an deep rooted need to be liked but if it becomes a dominant characteristic it can lead to bad policy.

Obviously, the Premier has decided that the source of his current unpopularity is a function of the actions of three ministers in particular: 1)  former Finance Minister Vic Fedeli who has now been put in the Economic Development Portfolio and replaced by former Environment Minister Rod Phillips, 2) former Child and Social Services Minister Lisa MacLeod who is being replaced by the former Economic Development minister Todd Smith and  3) former education Minister Lisa Thompson who is being replaced by a cabinet newcomer – Stephen Lecce – on the eve of what will be contentious negotiations this summer as teacher’s contracts expire. There are a number of other changes – such as Caroline Mulroney moving out of the Attorney General position to Transport – and you can get the new list here.  For those of you in the Northwest, Greg Rickford fortunately remains in charge of his portfolios.

There seem to be several themes here.  First, moving ministers out of portfolios where there has been controversy and putting in new faces.  It remains to be seen if the idea is to sell the same ideas with new faces or have an abrupt policy shift.  Second, an increase in the number of GTA area ministers which given the population and clout of the region is probably a wise strategy and was an important omission the first time the cabinet was constructed.  Third, an increase in the size of cabinet - from 21 to 28 – which will no doubt raise eyebrows in the Toronto area given the early move to reduce Toronto City council from 47 to 25. 

In some respects, this cabinet shuffle probably is going to signal an end to attempts to enact major reforms and changes designed to put Ontario’s Finances on a more sustainable path.  There is no doubt that some of the issues that affected people in health, education and social service sector were handled in a particularly ham-handed way but a move towards re-opening the taps wider in order to make a populist Premier more popular is not a good thing in the long run.  However, the expansion of cabinet is an important symbol that says there is not going to be as firm an emphasis on reining in the deficit and debt.   Indeed, it is very disappointing to see Vic Fedeli out of Finance given his energy level and steady hand when it came to the operations of government.

It will be an interesting summer.

So What Is the New Plan for Northern Ontario's economy?

As the Ford government forges ahead, we should soon expect to see evidence of what its plans for boosting the economy of northern Ontario will be.   Given the change of government, the previous Northern Growth Plan is gone and will not be mourned given that evidence of its positive impact was hard to come by.  The Northern Growth Plan was essentially a form of palliative policy care given that despite the lack of progress on the economic front, there were nevertheless numerous press releases and announcements to the effect that many things were happening in the north -usually announcements of government funding - and we should feel good.  As a strategy, it has even been embraced by the federal government.

Ontario is now apparently open for business and while that can certainly be beneficial for northern Ontario, it is necessary for the government to demonstrate what that actually means for the North.  During his recent visit to northern Ontario, the Premier reiterated his “open for business mantra” and stated a commitment to sectors like steel, mineral exploration and forestry.  His visits in late October to the steel facilities in the Sault, the opening of Harte Gold’s new Sugar Zone mine near White River and Thunder Bay for Resolute Forest Products investment announcement provided excellent photo opportunities for economic success but these were projects that have been in the works for some time.

It is now time for the Premier to demonstrate his commitment to growing the northern Ontario economy.  As to what the new approach will be, one can start by an examination of the election platform that brought the provincial Ford conservatives to office.  The northern platform was a five-point plan that involved:

• Developing Northern Resources, including the Ring of Fire.
• Moving forward with resource revenue sharing from mining, forestry and aggregates to help Northern towns and Indigenous communities share in resource development
• Ensuring hunting and fishing revenues go toward their stated purpose of conservation
• Cutting the aviation fuel tax for the North to reduce the cost of living in the North and,
• Bringing back passenger rail service to the North (which I take to mean the Ontario Northland and probably not full service across the north shore).

In terms of proposed implementation, the election platform of the victorious Conservatives said that a provincial conservative government under Doug Ford would:

1.     Build the roads to the Ring of Fire.

2.     Establish resource revenue sharing from mining, forestry and aggregates to help Northern and Indigenous communities share in the benefits of resource development by having the province take a portion of provincial revenues collected from aggregate licenses, stumpage fees and the mining tax and direct it to the local, host Northern and Indigenous communities. This was estimated at $20-$30 million in annual revenue.

3.     Ensure all hunting and fishing license fees are spent on wildlife conservation.

4.     Reverse the 148 percent increase to the aviation fuel tax for all Northern airports returning the aviation fuel tax to its original 2.7 cents per litre

5.     Bring back full passenger rail service to the North by first completing an environmental assessment of what equipment needs to be purchased and what upgrades need to be made to restore the service and then providing $45 million annually for operating costs.

Despite the flurry of activity with respect to announcements about promises made and kept, it remains that these five points and their associated implementation specifics have yet to be addressed.    How they will be implemented given the fiscal constraints the province faces will be an important issue.

In terms of fostering the northern Ontario economy, to these five points, I would add the freeing up of more Crown Land for cottage and camp development to provide the inputs to grow and develop a tourism service sector in the north that can be serviced out of its existing towns and cities. I would also urge extension of the highway twinning projects already currently underway to grow needed transport infrastructure in the north and hopefully improve upon the previous government’s anticipated completion date.

When these specifics will start to take firmer shape may be indicated in the November 15^th Ontario Economic Outlook and Fiscal Statement.  Until then, we wait.  Hopefully, the Ford government will repudiate the adage that while provincial governments go and come, the problems of the northern Ontario economy abide.