Controlling Spending, Making Life More Affordable and Growing the Economy: Key Themes in Ontario Fall Economic Statement
In what has been a challenging few weeks for a new government, the Fall Economic Statement (FES) provides a timely channel-changer and a rallying point in the lead-up to the Party’s convention this weekend.
Since its election on June 7th, the Ford Government has moved quickly to deliver on its key campaign commitments. Today’s Fall Economic Statement, “A Plan for the People,” demonstrated that this administration seeks to move forward on their campaign promises and maintain the same ideological disposition that got them elected.
Throughout his speech, Finance Minister Fedeli repeated “promise made, promise kept,” and “Ontario is open for business,” emphasizing the continuation of campaign themes. In addition, the document featured a mix of new and repackaged announcements. The Ford government stuck to themes popular with the voting coalition that elected them in June and generally fall into the categories of:
- Getting government spending and the deficit under control,
- Making life more affordable for families, and
- Ensuring Ontario is an attractive place to do business and grow the economy.
Understanding the optics of the government’s first FES
This Fall Economic Statement was different from previous ones. The Ford government used this opportunity to deliver a mini-budget, complete with media and stakeholder lock-up.
It represented the culmination of the government’s Commission of Inquiry and the E&Y line-by-line audit. It presented a final major opportunity for the Ford Government to blame the previous Liberal government for the fiscal situation and to outline the path forward.
Importantly, today’s FES also positioned the Ford government in contrast to the Trudeau Liberals in Ottawa. It clearly outlined how Ontario will work with Tory Premiers across Canada to oppose the federal carbon tax. It also gave full-throated support to national energy projects like the Energy East pipeline.
Summary of highlights
Minister Fedeli announced the government found $3.2 billion in savings, most of which ($2.7 billion) was repurposed into various tax relief measures announced today. The remaining $500 million was used to reduce the deficit from $15 billion to $14.5 billion. He re-emphasized that the path to balance will continue to be made through efficiencies rather than cuts, and that the government’s priority will remain helping families to “make ends meet and get ahead.” In returning $2.7 billion to the pockets of Ontarians, the Ford government is demonstrating that it is not solely focused on austerity in its approach.
Notably, the provincial government reported some savings were found through the freezing of hiring and discretionary public sector spending – measures that were announced within days of the new government’s mandate. As Treasury Board President Peter Bethlenfalvy mentioned previously, such cost-saving measures reflect a government that is intent on leading by example and projecting a credible fiscal reputation.
While the government is undoubtedly active on its first few months in the job with a mixture of rollbacks and ongoing operational austerity, most commentators agree that there are many other significant shoes to drop. It can be expected that in the weeks and months ahead, further details of program spending will continue to roll out to manage the remaining significant deficit.
The FES emphasized that the Ministry of Economic Development, Job Creation and Trade committed to reducing red tape for businesses by 25% by 2022. Stakeholders should take this opportunity to identify barriers to their organizations while helping the government achieve its objectives.
Opposition and some commentators were critical of some government reorganization initiatives. The Environmental Commissioner of Ontario’s responsibilities will be assumed by Ontario’s Auditor General, and the responsibilities of the Ontario Child Care Advocate will be handled by the Ombudsman. These changes were criticized as “the government slashing child care and environmental protections in order to save a few dollars.”
Changes affecting political parties
The FES announced the wind-down of the provincial taxpayer-funded per-vote subsidy by 2022. Ending the subsidy fits nicely with the Ford government’s philosophy, but from a partisan political perspective, many believe that it will also deliver a strategic advantage to the PC Party over its competitors.
Canadian Conservative parties have a stronger track record of raising funds from small and medium-sized donors relative to their competitors. That skill in mass-based fundraising, combined with the advantages of incumbency, could give the Ontario PCs a significant leg up in future fundraising. This change in election financing rules contributes to the challenges already faced by the seven-member Liberal caucus, who are coping with their loss of both Official Party status, and the financial assistance that comes with it. Recently, this hurdle became greater when it was announced that the threshold for party status will increase from eight to twelve members of the Legislature.
The 150 page “A Plan for the People” constitutes a comprehensive snapshot of the Ford government’s state of progress and ongoing priorities, five months into their mandate. Additional details – and follow-up announcements – can be expected in the coming days and weeks as the government further lays out their path to implementation. For further reading, here are links to key government document which explain their initiatives in their own words: