June 2018
Last week’s election in Ontario produced a new Progressive Conservative (PC) government, led by former Toronto city Councillor Doug Ford. The PCs received just over 40 percent of the popular vote, winning 76 of 124 seats in the Ontario Legislature. The election saw the highest voter turnout in Ontario in nearly 20 years.
The strength of the PC’s performance surprised many, given that the party went through a last-minute and highly controversial party leadership selection process. Ford’s own weak performances in the party leader debates, an at times apparently chaotic campaign, featuring serious questions about the background and behaviour of several high profile candidates, and a ‘platform’ that was little more than a collection of slogans, and never properly costed, all reinforced doubts about how well the party would do on election night.
The outcome can be interpreted in several different ways. The results can be seen as something of a fluke, flowing from the convergence of a unique set of factors going into the campaign: a deeply unpopular incumbent government; vote-splitting among moderate and progressive voters between the NDP, Liberals, and Greens; and a highly efficient geographic vote distribution on the PC side. The final seat count notwithstanding, it is important to remember that nearly 60 percent of those who voted in the election didn’t vote for Doug Ford and PCs.
Other readings of the outcome have pointed to deeper structural shifts in Ontario politics. The 2014 election had already highlighted a significant urban/rural split, with the PC’s finding their base in rural central Ontario. The core of Liberal support was, in contrast, found in the cities and towns that were doing relatively well through the province’s economic transition from manufacturing to service and knowledge-based industries, particularly in the Greater Golden Horseshoe around the western end of Lake Ontario, and in eastern Ontario around Ottawa. Urban centres, especially in the southwest, including Windsor and London, as well Hamilton and the Niagara region, suffering heavily from the impacts of declining of manufacturing activity, turned to the NDP. The north remained divided between the Liberals and New Democrats.
Elements of these themes were reinforced in 2018. The NDP, for example, which more than doubled its seat count relative to 2014 to 40, found much of its new strength in southern urban centres, including Toronto, Windsor, London, Kitchener-Waterloo, Brampton, Hamilton, and Niagara. For the PCs the critical shift was their gains from the Liberals in the 905 area code region surrounding the City of Toronto, and perhaps most significantly in the outer suburbs of the city itself. Indeed, the Conservative’s successes in former Cities of Etobicoke, North York, and Scarborough are what clinched their majority government, bolstered by significant vote splitting between the Liberals and NDP.
Ford’s victories in the 905 and 416 regions has been interpreted as a confirmation of the PC's status as the party of the disenfranchised, who have come to view the provincial government as the source of traffic congestion, poor transit services, overcrowded schools and hospitals, rising hydro rates and gasoline prices, and little else. They appear to have perceived Doug Ford as their instrument of the disruption of the institutions responsible for these troubles, and like US President Donald Trump, his unwillingness to abide by normal rules of politics seems to have enhanced his appeal that role.
For the New Democrats the failure to make even greater headway towards government in the face of a deeply unpopular incumbent and highly controversial PC leader invites questions about whether the result represents the maxing out of their potential under the party’s current platform and leadership. The party needs to find ways to connect with the disenfranchised voters in the outer 416 and the 905 regions if it is to have any hope of replacing the Progressive Conservatives in government in 2022.
The Liberals, reduced to less than official party status, with only 7 seats in the Legislature, seem likely to interpret the progressive directions taken by the Wynne government as a failure. They may try to move into a ‘moderate’ space between NDP and PCs in response. The one potential bit of good news for the Liberals is that the PCs are almost certain to grant them party status in the Legislature. Such a step would flow less from the goodness of Doug Ford’s heart, than from a desire to ensure continued vote-splitting among the moderate and progressive opposition parties.
The Green’s breakthrough success, with the election of Leader Mike Schreiner in Guelph, could compel the other parties competing on the progressive side of the political agenda to pay more attention to environmental issues. At the same time, absent any movement in the direction of proportional representation, it could also reinforce the problem of vote splitting among those parties running against the PCs.
The PCs may have been left wondering if they might have done even better under a more moderate leader, like Patrick Brown or Christine Elliot. Such considerations may move into the forefront in the longer term, as Mr.Ford is likely to have a profoundly polarizing effect on the electorate heading into the next election. The other key challenge for the PCs will be to hold their emergent coalition of an older, rural central Ontario base, and the newer, far more diverse communities of the Ford Nation in the 905 and outer 416 regions, together. The two elements are joined, for now, by Ford’s slogan-level mixture of fiscal and social conservatism, but are vulnerable to their underlying urban/rural and cultural divisions in the longer term.
In substantive policy terms, the PC’s platform commitments leave Ford with a combination of lost revenue through the elimination of the greenhouse gas cap and trade program and tax cuts, and new spending promises, in the range of at least $9 billion.
The new Premier faces powerful political incentives to deliver on his big-ticket themes items, including cuts to Hydro rates and the provincial gas tax, ending cap and trade, and delivering corporate and personal income tax reductions.
Trying to carry through on these commitments will leave the options of a catastrophic increase in provincial deficit or major spending and program cuts. The new premier seems to have very little sense of what the provincial government should actually do, other than to build subways in the City of Toronto. That suggests movement in the direction of major expenditure cuts, reinforced by his belief in the availability of dramatic “efficiencies” within the provincial government.
Cue the inevitable pronouncements, within a week or two of the new government taking office, that the province’s finances are in far worse shape than anyone could have ever imagined. This news will be followed by a replay of the 1995 Common Sense Revolution’s “savings and restructuring” exercise. The results then were chaos in the health, education and municipal sectors, the laying off of thousands of staff among provincial ministries and agencies and, ultimately, disasters like the Walkerton drinking water contamination tragedy. A good deal of the past fifteen years have been spent repairing the resulting damage.
Despite its commitments to further reduce electricity rates, the new government appears to have no clear path forward on what to do in the electricity sector. The most sensible option would be to take stock of the full range of options available to the province; nuclear refurbishments; electricity imports from Quebec; conservation; renewable energy in terms of which offer the lowest long-term costs, and the greatest flexibility to respond to changing economic and environmental conditions.
Instead, the new government may attempt to re-open existing contracts, particularly for renewable energy projects. Such an approach, as demonstrated by the gas plant cancellation scandal that ended Dalton McGuinty’s premiership, could prove far more expensive than allowing contracts, many of which are at or near their mid-life points anyway, to expire and then be negotiated anew. The effective termination of energy conservation programs by moving their funding to what will be a rapidly shrinking tax based would be equally unwise. Conservation initiatives are by far the most cost-effective means of meeting consumers’ energy needs, Revenues from a proposed sale of the remaining shares of Hydro One would almost certainly be frittered away to finance short-term Hydro rate and tax cuts.
Trying to undo the cap and trade system for greenhouse gases could lead in the direction of a similarly hideously expensive mess. Companies in Ontario have already made major expenditures on emission credits and reorganized their business activities around the cap and trade system. They are unlikely to respond well to the news that those investments are now worthless. Mr. Ford’s proposed constitutional challenge to the federal government’s authority to impose a carbon price in Ontario if the province dismantles its own regime is virtually certain to end in failure. The Constitution Act gives the federal Parliament explicit authority to impose “any mode or system of taxation” (s.91(3)) it wishes to. The one piece of good news is that the revenues from a federally imposed carbon price would flow back to Ontario, helping to plug some of the leaks in Mr.Ford’s already floundering fiscal ship.
Most importantly, the fundamental challenges faced by province have not been changed by the outcome of the election. Ontario has been exceptionally successful in making an economic transition from manufacturing and resource extraction and processing towards knowledge and service-based activities relative to its US neighbours around the Great Lakes basin. This has been due, in no small part, to the higher levels and quality of services and infrastructure provided by the province relative to those jurisdictions. At the same time, the transition has been regionally uneven within the province. While population growth and economic activity have been concentrated in the Greater Toronto Area and eastern Ontario around Ottawa, large areas of the province’s former manufacturing base have been left behind, particularly in the southwest. Even within the GTA, the election outcome hints at economic dislocation within the 905 and outer 416 regions.
Responding to these dynamics will require a more sophisticated economic strategy than tax cuts and further deregulation in a province that had already declared itself “open for business” under the Liberal government. Indeed, the approach outlined in the PC platform runs a very real risk of undermining the basis of the province’s relative economic success. It will be a hopelessly inadequate response to the trade actions of Donald Trump’s US administration on agriculture, steel, and auto manufacturing.
Nor will opposition to carbon pricing make the increasingly evident impacts of climate change, and the need to adapt to those impacts, go away. The province’s current path in electricity sector, focused on life-extensions and refurbishments for a fleet of aging nuclear power plants, continues to run major risks of embedding even higher costs in the future. It also carries risks of sidelining the province in the emerging technological revolutions in the electricity sector related to smart grids, and the dramatic improvements in the technological and economic performance of renewable energy sources and advanced energy storage technologies.
Other major issues will demand attention as well. The process of reconciliation with Ontario’s indigenous peoples, for example, remains far from complete. The scars from Grassy Narrows and Ipperwash, among many other unhappy events in the history of the province’s relationship with its first inhabitants, continue to be close at hand.
None of these challenges lend themselves to one-line, slogan-level solutions. Rather they require political leadership to convey the need to respond to these types of issues in terms that relate to their effects on residents’ everyday lives. Whether Mr.Ford can rise to these kinds of tests, or even understands the need to do so remains a very open question.