After Ontario election, ‘significant’ uncertainty remains: Scotiabank report

By Staff, with files from The Canadian Press | June 8, 2018 | Last updated on June 8, 2018
6 min read

Doug Ford rode a populist wave to power in Ontario on Thursday, capturing a Progressive Conservative majority by harnessing voters’ economic anxiety and anger with a scandal-plagued Liberal government.

The Tory leader’s election promises were in stark contrast to the other left-leaning major parties and included income tax cuts, scrapping the Liberals’ updated sex-ed curriculum and strongly opposing a carbon tax.

Read: As election day nears, a look at Ontario’s debt

Ford also rolled out several pledges designed with populist appeal in mind, from cutting gas prices by 10 cents a litre to introducing buck-a-beer to cutting hydro bills.

“A new day has dawned in Ontario—a day of opportunity, a day of prosperity and a day of growth,” he told a crowd chanting his name.

In a Thursday report released this morning, Scotiabank says, “The majority result for the Conservatives reduces some of [the election’s] uncertainty and points to a smaller public sector role than the NDP and Liberals proposed.”

The report discusses some of the party’s big-ticket promises, including “a $2.25-billion middle-class income tax cut,” which would involve the Torys dropping “Ontario’s general corporate income tax rate from 11.5% to 10.5%, with a similar decrease for its 10% manufacturing/processing rate and a lower small business tax.”

Further, “A populist approach is mirrored in a number of measures, such as removing income tax for minimum wage workers,” the report says.

This fall, Scotiabank expects a budget that “will likely represent a first step toward a fuller rollout of the new administration’s plans in its Budget next spring for FY20.”

Also, over the next couple of years, Ontario will be responding alongside other provinces “to major federal policy initiatives such as national pharmacare. U.S. trade actions and negotiations are presently top of mind, but in the wings are other issues such as Ontario’s mid-term competitiveness,” the bank says.

Still, overall, “Uncertainty still remains significant for Ontario.”

Read: Loose fiscal controls lead to blown budgets: C.D. Howe Institute

For its part, CIBC said in a report last night that what is clear is “[…] Ontarians have clearly voted for change. The Liberal party, after holding power for 15 years, has seen its seat count fall to third place, setting the NDP up to play the role of official opposition.”

However, the bank notes “[…] we don’t know all of the details regarding the balance of spending and revenue and what the implications are for Ontario’s deficit and debt load.”

The report says, “While the PC election platform offered a broad glimpse into what the new government will likely prioritize in the coming years, details on the implementation, cost and funding of several campaign promises remain unknown. There’s no statutory timeline for the new government to table a budget or fiscal update, but there were some tangible promises made during the campaign.”

Election details

The Liberals lost official party status in a stunning collapse after leading the province for the past 15 years and capturing a majority government just four years ago. Premier Kathleen Wynne, who narrowly hung on to her seat, resigned as Liberal leader, and all but seven Liberal ridings fell.

The NDP under Andrea Horwath will form the Official Opposition, marking a turnaround for a party consistently stuck in third place since Bob Rae’s New Democratic government was defeated in 1995.

Green Party Leader Mike Schreiner captured the party’s first-ever seat in Ontario.

The Progressive Conservatives won 76 ridings, while the NDP got 40.

Ford is a newcomer to provincial politics, having only captured the party leadership three months ago. He beat out establishment favourite Christine Elliott after former leader Patrick Brown stepped down over sexual misconduct allegations that he denies.

“My friends, together in 88 short days we achieved the impossible,” Ford said. “We united our party and united our province and this is your victory.”

Under Ford, the Progressive Conservatives recaptured the province they have not led since 2003, overcoming the failings of the past three elections that saw them unable to defeat the Liberals.

But Ford’s campaign certainly wasn’t immune to controversy. He dismissed allegations that he was involved in selling bogus Progressive Conservative party memberships, a candidate was dropped following accusations he was involved in an alleged theft of customer data at a toll highway operator, and Ford was frequently accused of failing to be transparent by dodging calls to release a fully costed platform.

With about one week left in the campaign, the party published a list of promises and their price tags, but didn’t indicate how they would pay for them, what size of deficits they would run or for exactly how long.

Then in the waning days of the election, Ford family drama—that laid mostly dormant in the public sphere since the death of his brother, former Toronto mayor Rob Ford—burst onto the scene with a lawsuit from Rob Ford’s widow alleging Doug Ford mishandled his brother’s estate and destroyed the value of the family business.

Ontario hasn’t had a premier like Ford before, said Western University associate political science professor Cristine de Clercy.

“[He’s] someone who is new to the provincial arena, who isn’t totally familiar with the ways of the legislature,” she said. “I also think it’s worth remembering during the leadership contest not many members of the caucus backed him. Unlike other leaders who often sweep into office with their party caucus behind him, he didn’t.”

Ford, who has positioned himself as a champion of “the little guy” and has been compared to U.S. President Donald Trump, is a wealthy businessman.

He’s the second son of Diane and Doug Ford Sr., a provincial politician for one term in the late 1990s. He has spoken about his family on the campaign trail and launched his bid for the Tory leadership from his mother’s basement in west Toronto.

He was first thrust into the national spotlight because of his defences of his scandal-plagued brother, whose admission of using crack cocaine made international headlines. He grabbed his brother’s former city council seat when Rob Ford was mayor, and stepped in as a Toronto mayoral candidate when cancer forced his brother to give up on running for a second term.

The crowd of Tory supporters at the Toronto Congress Centre erupted into cheers as a Progressive Conservative majority was called. People waved party signs and embraced while they waited for Ford to arrive. Each time Wynne’s image came up onto the screen, the crowd booed. The crowd booed again when news came that Horwath won her Hamilton riding.

Prime Minister Justin Trudeau called Ford to congratulate him and said he looks forward to working with him.

Voter turnout was up significantly, to 58% from about 51% in the 2014 election.

Nearly every Liberal cabinet minister was defeated, including Yasir Naqvi, Charles Sousa, Glenn Thibeault, Steven Del Duca, Kevin Flynn, Eleanor McMahon and Chris Ballard. Jim Bradley, who had held the riding of St. Catharines for the Liberals for 41 years, was also defeated.

A Liberal defeat was predicted by Wynne herself just days before the vote, as she admitted her party had such low support it would not form government again. She inherited a government already rife with billion-dollar scandals, but under her leadership more fuel was added to the fire, such as rising hydro bills and questionable government spending.

The Liberals came to power in 2003 under Dalton McGuinty, and when he stepped down in 2013, Wynne took the reins. She led the party to a majority in 2014, despite the party already being bogged down by scandals at eHealth Ontario, air ambulance service Ornge and a price tag of up to $1.1 billion to cancel two gas plants.

But her popularity soon began to dip, and reached well below 20% in 2016 and 2017, in large part due to anger over rising hydro prices. She also faced criticism over her partial privatization of Hydro One and her decision to plunge the province’s books back into the red after finally getting them to balance in 2017-18.

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Staff, with files from The Canadian Press

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