What the Progressive Conservatives’ season of 180s could mean for the deficit

ANALYSIS: The government seems to be trying to win back friends after a rough first year in office. Will it still be able to meet its own targets to balance the province’s books?
By John Michael McGrath - Published on Sep 09, 2019
The government announced in the 2018 fall economic statement that it was cancelling plans for a French-language university in the province. (Frank Gunn/CP)

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Another week, another reversal by the Doug Ford government. On Saturday, while the rest of the country was watching Bianca Adreescu win the U.S. Open, the province announced that Ontario and Canada had signed a memorandum of understanding committing both to building a francophone university. The news came after a week or so of conservatives, provincial and federal, trying to pin the blame on Ottawa for the lack of funding for a French-language campus.

A couple of points: First, it was Ontario, not Ottawa, that announced last year that it wouldn’t be moving forward with a French-language university campus. Even under the Liberals, there were reasonable criticisms levied at the plan: some questioned whether the government should spend tens of millions (the recent argument was over whether Ottawa and Queen's Park could split $126 million 50-50) on building a whole new campus for the francophone population. Nevertheless, it came as a shock to many when, in the 2018 fall economic statement, the government announced the cancellation of the campus. The move led MPP Amanda Simard to leave Ford’s caucus (she now sits as an independent) and soured relations between the party and francophone voters.

Second, the Tories have been trying to frustrate all attempts by the federal Liberals to connect Ford with Andrew Scheer by telling the Liberals to stick to their own, federal, jurisdiction. For example, when the Liberals attack Scheer over his prior (and since abandoned) promise to provide a tax break for parents of children in private schools — saying such a move would hurt public schools — PC staffers at Queen’s Park have responded by noting that education falls under provincial, and not federal, jurisdiction.

That’s accurate and true — but it’s a bit much for the Tories to tell Ottawa to keep its nose out of their business on Monday only to cry poverty and come asking for federal dollars on Friday.

The silliness of election season will, eventually, be over, and then the Tories will have a bigger problem. The hard turn they’ve made on the French-language university is only the latest of several whiplash-inducing 180s they’ve executed since the cabinet shuffle in June (and the expulsion of Ford’s chief of staff, Dean French). Last week on TVO.org, Steve Paikin wrote about some of the efforts the government has made this summer to reverse course, and Matt Gurney elaborated on some ways it could all still go wrong for the Tories.

But whether their current efforts revive their standing in the polls (or, more immediately, stop hurting Andrew Scheer), the Tories will have the same problem next spring that they had in April 2019: they’ve got to present a provincial budget to the legislature, one that makes some headway on reducing the provincial deficit. There are plenty of arguments to be made about how serious Ontario’s deficits really are, but, for now, it’s important to note only that the Ontario PC party believes they’re very severe indeed.

Because a summer is a long time in politics, it’s been nearly forgotten now, but the spring budget — the same document that caused so many political problems for the government — was trying to do something real: contain the growth of spending at Queen’s Park in order to reduce the deficit. And, while not every reversal the Tories have made since then carries a big price sticker, many of them do. Keeping the peace with the provincial teachers’ unions certainly will, and if they also want to make peace with the parents of children with autism, that will also come with a substantial cost.

And that’s the dilemma facing the Tories. They could have tried to tough out the bad press from the spring budget on the grounds that it would be a distant memory by the time of the 2022 election — and hoped that voters would reward them for their fiscal discipline. Instead, they’ve opted to change direction and try to make nice (at least a little), even though doing so will prove expensive.

I can’t say for certain which choice was the correct one — that will emerge in the years to come, and prediction is a sucker’s game — but it’s worth being clear-eyed about the risks the PCs face if they stick to their plan to balance the province’s books by 2023. It could mean delaying or abandoning some of the promises they made in the last election and have yet to fulfill, like cutting gas taxes by 10 cents a litre. Or it could mean pushing back the deadline — which could result in more costs for the province if financial markets start demanding higher interest on government debt.

The Tories came to office believing that the Liberals were incapable of making the hard choices necessary to balance the books, and there was no small amount of evidence to back up that accusation. But it’s also an easy opinion to hold when you’re in the opposition benches. Power means making choices in a real world where every option comes with costs — and that’s harder than it looks from the outside.

Correction: Bianca Andreescu won the U.S. Open on Saturday, not Sunday.

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