The Ontario legislature resumes today (September 14th) after a three-month summer break, with the Wynne government anticipated to focus on implementing major policy commitments announced over the past several months.
There has been some change in representation at Queen’s Park over the summer with the election of Ontario Progressive Conservative (PC) Leader Patrick Brown in the Simcoe North by-election and the resignation of PC MPP Christine Elliott (Whitby-Oshawa). Once Brown has been sworn-in, the legislature will be composed of 59 Liberals, 27 PCs, and 20 New Democrats, with one seat vacant.
Policy Implementation Expected to Dominate Government’s Agenda
The Wynne government has committed over the past several months to a number of major and in some cases contentious policy initiatives. The challenge for the provincial government will be the successful execution of these initiatives, especially given the short timeframes and intensive work required to implement each of them. In order to show significant progress in advance of the next provincial general election (spring 2018), the government will need to make a number of difficult decisions over the next several months.
Further Details on Cap and Trade expected ahead of UN Climate Change Conference: Earlier this year, the Ontario government announced its intention to implement a cap-and-trade program designed to reduce greenhouse gas emissions by 15 per cent below 1990 levels by 2020 and by 37 per cent below 1990 levels by 2030, and link the province’s cap-and-trade system with Quebec’s and California’s in 2017. The technical and regulatory details of the system will need to be worked out over the next several months, and, where the Western Climate Initiative permits Ontario flexibility on implementation, the government will need to take into account potential implications for the economy. Leading up to the Conference of the Parties to the UN Framework Convention on Climate Change in Paris (scheduled for November 30th to December 11th), we expect Ontario to make an announcement to demonstrate progress.
Moving Forward on Implementation of the Ontario Retirement Pension Plan (ORPP): The Ontario Liberal government continues to push toward the implementation of the ORPP in 2020 (with benefits starting to be paid out two years later) despite opposition from small business and both federal and provincial Conservatives. Government continues to face a number of serious questions about this key initiative – particularly around management of the fund, general administration, and costs. A federal Liberal or NDP victory on October 19th could produce an enhanced Canada Pension Plan, which might cause Ontario’s government to reconsider its independent approach.
Partial Sale of Hydro One to be Determined: The Budget legislation passed in June 2015 provided the government with the authority to sell up to 60% of Hydro One (no single buyer can purchase more than 10%), but retain a 40% stake. Details on the potential sale have not been announced by the government, and will need to be carefully developed to ensure a successful sale. It is also unclear exactly how proceeds of a potential sale would be spent, although Premier Wynne has suggested that the funds would support the government’s substantial infrastructure investment commitments. Watch for a heated debate in the Legislature, both during Question Period and Estimates.
Developing Regulations for the Proposed Common Securities Regulator: Along with BC, New Brunswick, Saskatchewan, Prince Edward Island, Yukon and the federal government, Ontario’s Ministry of Finance in late August released draft initial regulations for the Cooperative Capital Markets Regulatory System, as well as a revised draft of the implementation legislation. That being said, considerable work – including initial draft regulations for prospectus exemptions, one of the most contentious issues – remains.
Recommendations on Changes to the Sale of Alcohol: Ed Clark, Chair of the Premier’s Advisory Council on Government Assets, is expected to make further recommendations on the retail of alcohol, specifically wine.
Ongoing Labour Negotiations: The government is in negotiation or arbitration with a number of public sector unions this year, including the Ontario Public Service Employees Union, Elementary Teachers’ Federation of Ontario and the Ontario Hospital Association. The government has reached tentative deals with the Ontario English Catholic Teachers’ Association and the Ontario Secondary School Teachers’ Federation.
Preparing a Fall Economic Statement: The government’s Fall Economic Statement will be released by the Ministry of Finance on or before November 15th. This report will provide an update on the government’s progress toward achieving its budget goals, as well as the state of Ontario’s economy. If the government wants to begin backing away from its 2017-18 balanced budget commitment, the Fall Economic Statement could provide such an opportunity.
Major Infrastructure Investments: The Ontario government announced extensive infrastructure investment plans as a priority in the 2015 Budget. As it seeks to demonstrate progress on this file over the next several months, the government may provide details on specific infrastructure plans.
The above initiatives, especially the implementation of the cap-and-trade system and the ORPP, will likely have significant implications for employers throughout Ontario, including higher inputs costs. Given that potential impact, we anticipate that the province’s political discourse will heat up considerably as we head into autumn.