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Ontario Election Outcome: Is a Return to the Status Quo Ante the Best Thing for Ontario’s Environment?

Ontario environmentalists have generally been breathing a sigh of relief over the re-election of the McGuinty government, with its implication of the continuation of the Feed-in Tariff system under the Green Energy Act, and more general avoidance of the major retreat by the province on environmental matters that would almost certainly have accompanied a PC victory. However, as I noted in my previous blog, even with the re-election of the Liberals, the possibility of some sort of retrenchment on the environment, particularly in light of the province's fiscal situation cannot be ruled out. In fact, I am increasingly of the view that a major restructuring in the province's approach to environment and natural resources management is likely, most probably through the 2012 budget. Such a development would not be unprecedented - recall the 1996 federal Liberal Program Review budget that followed the relatively progressive 1993 "Red Book" platform. Moreover, in terms of core environmental protection and natural resources management policy, such moves could be seen continuations of the status quo ante for the government.

We have already seen moves in this direction, particularly the 2009 transfer of responsibility for forest management from the Ministry of Natural Resources (MNR) to the Ministry of Northern Development and Mines (MNDM), clearly signalling a shift in emphasis from multi-functional forestry to economic development. In the case of the Ministry of the Environment, the government has claimed that the shift to a "permit-by-rule" or "registration" system, where project and facilities are 'deemed' to have approvals if they indicate compliance with standards established by the ministry, as opposed to detailed review by ministry staff, will permit the transfer of resources from environmental approvals to enforcement and other ministry functions. However, given the province's fiscal situation, the more likely outcome is for those resources to disappear from the ministry's operational budget and staff.

The Commission on the Reform of Public Services, chaired by former TD Bank Chief Economist Don Drummond, is scheduled to report in time to influence the 2012 budget. Expect the Commission’s report to contain a strong focus on new public management (NPM) approaches to the delivery of the province's regulatory functions in relation to public goods. New public management models emphasize self-management and self-regulation by regulated industries. The model is epitomized by the Technical Standards and Safety Authority (TSSA) and Electrical Safety Authority (ESA), created by the previous Progressive Conservative government. These not-for-profit corporations, whose boards of directors are dominated by representatives of the regulated sectors, took over the public safety regulatory functions of the Ministry of Consumer and Commercial Relations and Ontario Hydro respectively. The same government's moves in the direction of replacing compliance inspections by ministry staff with industry self-inspection and compliance reporting in relation to forestry, aggregates and other natural resources sectors reflected the similar principles.

Despite considerable evidence of serious problems with these models in terms of their effectiveness in protecting the public and providing for accountability, transparency and access to information, particularly in light of events like the August 2008 Sunrise Propane explosion, the Liberals pointedly left the NPM structures established by the Harris PCs in place. They were, in fact, extending them to other sectors, like the regulation of nursing homes. A strong push further in this direction in relation to the province's remaining regulatory functions, particularly at the Ministry of the Environment, as first proposed in the post-Walkerton Gibbons report (and rejected by the Walkerton Inquiry), is almost certain.

A major restructuring among environment and natural resource agencies is also possible. The MNR is perhaps the most vulnerable in the context. It is possible to envision the dissolution of the ministry, with its remaining resource management functions (e.g. mineral aggregates, petroleum, brine, fur and wildlife) being transferred to MNDMF and its conservation and planning functions being moved to what remains of the Ministry of the Environment or even the Ministry of Municipal Affairs and Housing.

Given the centrality of urban areas and larger towns and cities to the Liberals' survival as a government, municipalities are likely less vulnerable to a repeat of the "who does what" downloading exercise of the "Common Sense Revolution." The 2004-06 land-use planning reforms (the Greenbelt, Places to Grow plan and Planning Act Revisions) can also be expected to survive, although it remains to be seen how active the province will be in backing up its policies as they are challenged before the OMB by some municipalities and developers.

While the NDP might be expected to oppose some of the potential backsliding, the government will likely be able to bring the PCs on-side both in terms of budgetary measures and any required implementing legislation. None of this can be seen as good news for the protection of public goods in Ontario. The role of self-regulatory models in the financial services sector in permitting the behaviour that led to the 2008 financial crisis is well recognized, even among some of their proponents. Those experiences should have lead to some serious reconsideration of the use of similar approaches in relation to the protection of other public goods, such as the environment, public health and public safety. But in Ontario there is no evidence of any change in course so far.