Transcript: Ep 76 - Ontario's frightening bottom line | Aug 14, 2020

Jazzy music plays.

A pale blue slate shows pictures of Steve Paikin and John Michael McGrath. A title reads "Hashtag OnPoli, a TVO podcast with Steve Paikin and John Michael McGrath."

Steve says WELCOME, EVERYONE, TO THE ONPOLI PODCAST. I'M STEVE PAIKIN.

John Michael says AND I'M JOHN MICHAEL MCGRATH.

Steve says WELL, IT'S NOW OFFICIAL. THE ONTARIO MINISTRY OF FINANCE HAS RELEASED ITS FIRST-QUARTER NUMBERS, AND WE HAVE NEVER SEEN THE PROVINCE'S BOTTOM LINE LOOK SO FRIGHTENING. THE RESPONSE TO COVID-19 WILL SEE ONTARIO'S DEFICIT REACH STRATOSPHERIC HEIGHTS NEVER BEFORE SEEN. THAT, PLUS NEW DEVELOPMENTS ABOUT REOPENING OUR SCHOOLS ON THIS FRIDAY, AUGUST 14, 2020. SO, LET'S GET TO IT.
J.M.M., I'VE BEEN FOLLOWING QUEEN'S PARK SINCE THE EARLY 1980S, AND IN ALL THAT TIME, I HAVE NEVER SEEN THE BOOKS OF THIS PROVINCE LOOK AS BLEAK AS THEY DO RIGHT NOW. LET US DIVE INTO THE NUMBERS. WHAT'S THE DEFICIT LOOKING LIKE FOR THIS FISCAL YEAR?

John Michael says WELL, STEVE, IT'S THE BIGGEST NUMBER EVER. KIND OF UNSURPRISINGLY, I SUPPOSE. A 38.5 BILLION DOLLAR DEFICIT. JUST TO GIVE PEOPLE A SENSE OF CONTEXT HERE, BACK IN MARCH, AT THE OUTSET OF THE PANDEMIC, WHEN WE ALREADY KNEW THINGS WERE GETTING BAD BUT WE DIDN'T KNOW HOW BAD, THE PROVINCE WAS PROJECTING AN 18 BILLION DOLLAR DEFICIT. SO, MORE THAN DOUBLE WHAT WE WERE PROJECTING JUST IN MARCH. UH, IT'S A BIG NUMBER. IT'S NOT ENTIRELY A SURPRISE. OBVIOUSLY, WE KNOW THERE'S BEEN THIS DRAMATIC RECESSION. IT'S ALSO WITHIN A FEW BILLION DOLLARS OF WHAT THE FINANCIAL ACCOUNTABILITY OFFICER HAD PREDICTED EARLIER THIS SUMMER. SO, A SHOCKING NUMBER IN A HEADLINE, BUT ALSO UNDERSTANDABLE IN THE CONTEXT. THE ECONOMY IS ALSO RECOVERING FROM THE, UH, EARLIEST FORMS OF THE PANDEMIC. SO, WHAT WE'RE CURRENTLY SEEING IS AS A PERCENTAGE OF THE GDP, THE DEBT IS NOW PROJECTED TO BE 47.1 percent. THAT IS HIGHER THAN IT HAD INITIALLY BEEN PROJECTED. BUT THAT NUMBER WILL ALSO CHANGE AS THE ECONOMY CONTINUES TO GROW, AND HOPEFULLY, NOT QUITE SO MUCH DEFICIT SPENDING WILL BE NEEDED IN THE NEXT FISCAL YEAR.

Steve says LET'S PUT THOSE NUMBERS INTO CONTEXT, BECAUSE 47.1 percent DEBT-TO-GROSS-DOMESTIC-PRODUCT RATIO... I REMEMBER, IN THE EARLY 1980S, COVERING THE GOVERNMENT OF ONTARIO, WHEN THERE ALSO WAS AN HISTORICALLY AWFUL RECESSION. AND THE DEBT-TO-GDP RATIO BACK THEN GOT AS HIGH AS 13 percent.

(JOHN MICHAEL CHUCKLING)

Steve continues NOW, MORE THAN 47 percent. SO, THAT DOES GIVE YOU A SENSE ABOUT HOW MUCH DEBT AS A PERCENTAGE OF OUR ECONOMY WE ARE INCURRING RIGHT NOW TO FIGHT THIS PANDEMIC. LET'S REMIND EVERYBODY, JMM, HOW WE GOT HERE. THE PROVINCE HAS ESSENTIALLY CATEGORIZED ITS 30 BILLION DOLLAR COVID-19 RESPONSE PLAN INTO THREE... LET'S CALL THEM THREE GENERAL BUCKETS, AND LET'S GO THROUGH THEM RIGHT NOW. THE FIRST BUCKET IS HEALTHCARE. WHAT'S BEEN HAPPENING?

John Michael says THERE, THE PROVINCE HAS ANNOUNCED AN ADDITIONAL 4.3 BILLION DOLLARS IN SPENDING SINCE THEIR MARCH PROJECTIONS. THIS IS EVERYTHING THAT WE'VE ALREADY HEARD ABOUT IN TERMS OF HOSPITAL CAPACITY, MORE PERSONAL PROTECTIVE EQUIPMENT FOR FRONT-LINE WORKERS, THE TESTING STRATEGY, THAT WE'RE NOW USUALLY AVERAGING 25,000 TO 29,000 TESTS A DAY, THE EMERGENCY PANDEMIC PAY THAT THE GOVERNMENT HAS MADE AVAILABLE TO FRONT-LINE WORKERS, AND ALL OF THESE TOTALLY, I GUESS, UNDERSTANDABLE RESPONSES TO THE PANDEMIC. THEY HAVE ALL COST REAL MONEY.

Steve says NOW, ALL THESE NUMBERS WE'RE GIVING OUR LISTENERS, INCIDENTALLY, COME FROM THE FINANCE MINISTER ROD PHILLIPS'S FIRST-QUARTER UPDATE, WHICH JUST HAPPENED EARLIER THIS WEEK. AND YOU KNOW, WE ARE GOING TO BEG THE INDULGENCE OF OUR LISTENERS HERE, 'CAUSE WERE ARE GOING TO THROW A LOT OF NUMBERS AT YOU HERE, BUT THAT'S WHAT ONE DOES. ONE DOES THAT WHEN WE'RE GOING THROUGH MINISTRY OF FINANCE NUMBERS HERE. SO, THAT'S THE FIRST BUCKET: HEALTHCARE. THE SECOND BIG BUCKET IS, I GUESS, WHAT THEY'RE CALLING PROTECTION FOR PEOPLE AND JOBS. AND TO THAT END, FINANCE MINISTER PHILLIPS ANNOUNCED AN ADDITIONAL 3 BILLION DOLLARS TO TOP UP WHAT HE HAD ALREADY SPENT. SO, WHAT DOES ALL THAT INCLUDE?

John Michael says THIS IS SOME OF THE PROVINCIAL EXPENSES THAT HAVE BEEN INCURRED IN THINGS LIKE THE RENT SUPPORT THAT THE PROVINCE ANNOUNCED EARLIER THIS YEAR. YOU MAY RECALL THAT WAS A COST-SHARE BETWEEN THE FEDERAL AND PROVINCIAL GOVERNMENT. SO, SOME OF THAT IS SHOWING UP ON THE PROVINCE'S BOOKS, EVEN THOUGH THE MAJORITY OF THAT WAS FEDERAL SPENDING. THERE ARE ADDITIONAL MEASURES TO TRY AND HELP BUSINESSES STAY OPEN. THE GOVERNMENT HAS INCURRED THINGS LIKE CORPORATE INCOME TAX CUTS. THAT WAS ONE THE EARLY MEASURES THAT THE GOVERNMENT BROUGHT IN TO TRY AND HELP BUSINESSES. SO, THESE ARE MEASURES THAT HAVE USUALLY INVOLVED SOME AMOUNT OF PROVINCIAL AND FEDERAL COST-SHARING. SO, THINGS LIKE THE RENT SUPPORT AGREEMENT THAT THE GOVERNMENT ANNOUNCED TO TRY AND GET COMMERCIAL LANDLORDS TO GIVE THEIR TENANTS A BREAK. PEOPLE WILL REMEMBER THAT THAT WAS MOSTLY FEDERAL FUNDING, BUT THERE WAS A COST-SHARING ELEMENT TO THAT WITH THE PROVINCIAL GOVERNMENTS AS WELL. AND THE MEASURES LIKE THAT THAT HAVE BEEN DESIGNED TO NOT JUST, YOU KNOW, KEEP FAMILIES AND HOUSEHOLDS WHOLE, BUT TO TRY AND KEEP BUSINESSES UP AND RUNNING. THOSE ARE ALL FALLING INTO THAT 3-BILLION DOLLAR BUCKET.

Steve says OKAY. SO, BUCKET ONE IS HEALTHCARE. BUCKET TWO IS PROTECTION FOR PEOPLE AND JOBS. LET'S LOOK AT THE LAST BUCKET, BUCKET THREE. I GUESS WE SORT OF CALL THIS A RAINY DAY FUND. IN, YOU KNOW, FANCY MINISTRY OF FINANCE PARLANCE, THEY CALL IT CONTINGENCY ACCOUNTS. AND FINANCE MINISTER PHILLIPS IS PUTTING 11 BILLION DOLLARS INTO THAT. THAT IS THE BIGGEST CONTINGENCY ACCOUNT NUMBER EVER IN THE HISTORY OF THE PROVINCE OF ONTARIO. AND WHAT DOES ALL THAT ENCOMPASS?

John Michael says YOU CAN UNDERSTAND WHY THE GOVERNMENT WANTS TO SOCK AWAY MONEY IN SPECIFIC SAVINGS. IN ORDER TO DEAL WITH POTENTIAL UNEXPECTED EVENTS. LORD KNOWS THERE HAVE BEEN ENOUGH UNEXPECTED EVENTS IN THIS YEAR SO FAR. THE PROVINCE ALWAYS HAS SOME LEVEL OF RESERVE, SOME LEVEL OF CONTINGENCY THAT IT OPERATES ON. THIS IS JUST SUBSTANTIALLY LARGER THAN WE'VE EVER SEEN IT BEFORE. THIS IS TO HELP THE PROVINCE GIVE SOME TAX DEFERRAL TO BUSINESSES THAT WILL NOW BE ALLOWED TO FILE FOR THEIR TAXES ON OCTOBER 1ST. THIS MATCHES A DEADLINE THAT THE FEDERAL GOVERNMENT HAD ALREADY PUSHED BACK ON ITS END. SO, BUSINESSES THAT, YOU KNOW, MIGHT HAVE BEEN INITIALLY, THIS YEAR, BEEN LOOKING TO START PAYING THEIR TAXES ON APRIL 1ST OR JUNE 1ST, THOSE ARE NOW GETTING PUSHED BACK INTO THE FALL. SOME OF THESE MEASURES WON'T NECESSARILY COST THE GOVERNMENT THAT MUCH MONEY, BECAUSE IT IS AT LEAST, SO FAR, JUST TALKING ABOUT POSTPONING THESE TAX PAYMENTS; THAT THE GOVERNMENT IS STILL HOPING TO GET THAT TAX MONEY FROM BUSINESSES AND PEOPLE EVENTUALLY. BUT THEY ARE REALLY EMPHASIZING THAT AT THE MOMENT, THIS IS ABOUT HELPING BUSINESSES THAT ARE JUST SUFFERING FROM CASH-FLOW PROBLEMS. THEY JUST LITERALLY DON'T HAVE THE MONEY AT THE MOMENT TO PAY THEIR TAXES, AND THEY WON'T UNTIL THEIR CUSTOMERS COME BACK. WHEN THOSE CUSTOMERS COME BACK, THEY ARE GOING TO OWE THEIR FULL YEAR'S WORTH OF TAXES, AT LEAST SO FAR.

Steve says WELL, LET ME MAKE ONE QUICK OBSERVATION COMING OUT OF THAT. 11 BILLION DOLLARS IS WHAT ROD PHILLIPS IS PUTTING INTO ONTARIO'S CONTINGENCY FUNDS RIGHT NOW. THE GOVERNMENT OF CANADA, IN A TYPICAL YEAR, WILL SET ASIDE 3 BILLION DOLLARS FOR ITS RAINY DAY FUND FOR THE ENTIRE COUNTRY FOR THE YEAR. 3 BILLION DOLLARS. THIS IS 11 BILLION DOLLARS FOR ONE PROVINCE FOR BASICALLY, YOU KNOW... WELL, IT'S NOT EVEN THE FULL YEAR YET, BECAUSE OF COURSE, THIS PANDEMIC DIDN'T HIT UNTIL MID-MARCH. SO, THAT AGAIN GIVES YOU A SENSE OF THE SCOPE OF WHAT WE'RE DEALING WITH RIGHT HERE. I CAN TELL YOU AS WELL, JOHN MICHAEL, I SPOKE TO ROCCO ROSSI, WHO'S THE HEAD OF THE ONTARIO CHAMBER OF COMMERCE. I SPOKE TO DIANE BRISEBOIS, WHO IS THE HEAD OF THE RETAIL COUNCIL OF CANADA. AGAIN, EARLIER TODAY. THEY DON'T WANT TO LOOK A GIFT HORSE IN THE MOUTH, BUT BOTH OF THEM SAY THAT THESE TAX DEFERRALS AREN'T NECESSARILY GOING TO BE ALL THAT HELPFUL TO KEEP SMALL BUSINESSES AFLOAT. BECAUSE OF COURSE, IF YOU'RE SINKING, YOU DON'T WANT TO TAKE ON MORE DEBT IN THE HOPES THAT, YOU KNOW, SOME SHIP IS GOING TO COME BY AND EVENTUALLY RESCUE YOU. YOU'D LOVE NOT TO HAVE TO TAKE ON MORE DEBT AT ALL IN THE HOPES THAT YOU GET BACK ON YOUR FEET. THAT'S WHAT I'M HEARING. WHAT ARE YOU HEARING?

John Michael says YOU KNOW, OBVIOUSLY, FOR MANY BUSINESSES, A DEFERRAL ISN'T GOING TO CUT IT. THEY NEED, OR THEY SAY THEY NEED, A HOLIDAY ALTOGETHER, FULL FORGIVENESS. NOW OBVIOUSLY, THAT GETS VERY EXPENSIVE. FINANCE MINISTER ROD PHILLIPS HAS SAID THAT THEY ARE STILL LOOKING AT A GENERAL POLICY OF BUSINESSES PAYING THEIR TAXES. PLENTY OF BUSINESSES IN CANADA ARE STILL OPERATING. MAYBE NOT AT 100 percent, BUT THEY CAN STILL PAY THEIR TAXES. AND THAT'S WHY THE GOVERNMENT IS TALKING ABOUT A DEFERRAL RATHER THAN AN OUTRIGHT HOLIDAY. BUT YOU KNOW, KEEP AN EYE ON THIS ISSUE, BECAUSE PHILLIPS WAS ASKED ABOUT THIS, THIS ISSUE OF FORGIVING TAXES OUTRIGHT, ON WEDNESDAY, WHEN THE GOVERNMENT ANNOUNCED ITS QUARTER ONE FINANCES, AND HE DIDN'T DISMISS THE IDEA OUTRIGHT. SO, THERE'S SOME FLEXIBILITY, MAYBE, AT QUEEN'S PARK ON THIS.

Steve says NOW, HERE'S ONE OF THE REALLY FASCINATING ASPECTS OF THIS WHOLE THING. IS THAT EVEN THOUGH THE PROVINCE OF ONTARIO IS BORROWING UNTOLD BILLIONS... WELL, I GUESS NOT UNTOLD. WE KNOW WHAT THE NUMBER IS.

(JOHN MICHAEL CHUCKLING)

Steve continues BUT MANY. MANY, MANY BILLIONS UPON BILLIONS OF DOLLARS TO HELP FIGHT THE RAVAGES OF COVID-19. THE COST OF BORROWING ALL THAT MONEY IS ACTUALLY GOING TO BE LESS THIS YEAR THAN IT WAS LAST YEAR. INTEREST RATES, OF COURSE, ARE AT HISTORIC LOWS. SO, EVEN THOUGH WE'RE BORROWING MUCH MORE, THE INTEREST ON THAT DEBT IS ACTUALLY GOING TO COST TAXPAYERS FAR LESS THAN EXPECTED. THAT'S UNUSUAL. YOU WANT TO TAKE US THROUGH THAT?

John Michael says SO, THE SHORT VERSION, BEFORE WE GET INTO THE DETAILS HERE, IS JUST THAT INTEREST RATES HAVE FALLEN DRAMATICALLY SINCE THE PANDEMIC STRUCK. THE FINANCE MINISTER'S BRIEFING EARLIER THIS WEEK... THESE ARE, YOU KNOW, BACKGROUND BRIEFINGS WHERE WE ARE ALLOWED TO ASK QUESTIONS OF THE GOVERNMENT'S OWN TECHNICAL EXPERTS. THE GOVERNMENT SAYS THEY ARE NOW ABLE TO BORROW MONEY AT RATES THAT ARE MORE THAN A FULL PERCENTAGE POINT LOWER THAN WAS EXPECTED EARLIER THIS YEAR, AND MORE THAN TWO POINTS LOWER THAN WHAT WAS ANTICIPATED IN LAST YEAR'S BUDGET. THAT IS THANKS, IN LARGE PART, TO THE BANK OF CANADA, WHICH RESPONDED EARLY ON IN THE PANDEMIC WITH TWO PROGRAMS. WHEN SOME PROVINCES, ESPECIALLY SOME ATLANTIC PROVINCES, WERE WARNING THAT THEY WERE IN DANGER OF A REAL FINANCIAL DISTRESS...

(CHUCKLING)

John Michael continues YOU MIGHT HAVE SEEN SOME HEADLINES AROUND THE TIME WONDERING IF IT'S POSSIBLE FOR A PROVINCE TO DECLARE BANKRUPTCY.

Steve says MM-HMM.

John Michael says WE NEVER GOT THAT FAR, OF COURSE, BUT IT WAS THE KIND OF THING THAT PEOPLE WERE TALKING ABOUT. ONTARIO WAS NEVER QUITE IN THAT BOAT, BUT IT IS BENEFITING FROM THE BANK'S WORK TO LOWER INTEREST RATES OVERALL. SO, TAXPAYERS ARE GOING TO SAVE 741 MILLION DOLLARS RELATIVE TO WHAT THEY WERE PROJECTING IN MARCH, JUST ON INTEREST PAYMENTS. SO, THAT MAY BE THE ONLY GOOD NEWS THAT THE GOVERNMENT GOT SO FAR IN THIS YEAR'S FINANCES. IT'S ABOUT three quarter BILLION DOLLARS LESS IN INTEREST PAYMENTS, DESPITE SPENDING NEARLY TWICE AS MUCH IN DEFICIT.

Steve says YEAH. YOU'RE QUITE RIGHT. THERE'S NOT A LOT OF GOOD NEWS IN ANY OF THESE NUMBERS, BUT THAT IS A LITTLE BIT OF IT. AND YOU KNOW, I GUESS IF WE DIG DEEP ENOUGH, WE CAN FIT A BIT OF OTHER GOOD NEWS AS WELL. UH, THIS ISN'T IT. WAIT FOR IT. WE LOST 1.2 MILLION JOBS BETWEEN FEBRUARY AND MAY IN THE PROVINCE OF ONTARIO, IF YOU CAN IMAGINE THAT. WE'VE HAD HALF A MILLION JOBS COME BACK SINCE JUNE. SO, THAT IS ENCOURAGING. NOT ENOUGH, OF COURSE, BUT IT'S ENCOURAGING. AND THE PROVINCIAL UNEMPLOYMENT RATE NOW IS 11.3 percent, WHICH OF COURSE IS HIGH. YOU KNOW, YOU CAN REMEMBER NOT THAT LONG AGO IT WAS AROUND FIVE AND CHANGE. SO, YOU KNOW, SURE: IT'S HIGH. BUT IF YOU REMEMBER, DURING THE GREAT DEPRESSION 90 YEARS AGO... AND AS YOU KNOW, JOHN MICHAEL, I COVERED THAT...

(JOHN MICHAEL LAUGHING)

Steve continues THE UNEMPLOYMENT RATE WAS 25 percent RIGHT THEN. SO, MORE THAN DOUBLE WHAT IT IS TODAY. AND THERE WAS NO SUCH THING BACK THEN AS UNEMPLOYMENT INSURANCE OR OTHER PROGRAMS TO PROTECT PEOPLE. SO, ALL THINGS IN PERSPECTIVE HERE, RIGHT?

John Michael says RIGHT. AND I WOULD SAY, EVEN IN OTHER HISTORIC RECESSIONS, EVEN IN MY LIFETIME, WE HAVE SEEN DOUBLE-DIGIT UNEMPLOYMENT IN ONTARIO. IT'S NOT, OBVIOUSLY, COMFORTABLE FOR ANYBODY, AND IT'S NOT AN OUTCOME ANYBODY WANTS TO SEE. BUT WE HAVE SOME SENSE OF HOW THE SYSTEM WORKS TO DEAL WITH THIS. AND YOU KNOW, IN THE CANADIAN CONTEXT, THE WAY GOVERNMENTS AT ALL LEVELS HAVE, I THINK, WORKED TOGETHER DURING THIS PANDEMIC HAS BEEN, I WOULD SAY...

(LAUGHING)

John Michael says CERTAINLY MORE GOOD THAN BAD. THERE ARE DEFINITELY PLACES IN THE WORLD THAT ONTARIO COULD STILL TAKE SOME LESSONS FROM IN TERMS OF DEALING WITH THE PANDEMIC, BUT BOY. THERE ARE DEFINITELY PLACES THAT ARE DOING WORSE THAN WE ARE, AND UNFORTUNATELY, ONE OF THEM HAPPENS TO BE RIGHT NEXT DOOR. YOU'VE GOT THE WHITE HOUSE CONSTANTLY FIGHTING, NOT JUST WITH DEMOCRATS IN CONGRESS BUT WITH OTHER STATES, AND EVEN HIS OWN PUBLIC HEALTH BUREAUCRACY. IN CONTRAST, THE FEDERAL, PROVINCIAL AND MUNICIPAL GOVERNMENTS ARE LARGELY DOING REALLY WELL AT, YOU KNOW, IGNORING SOME OF THE PARTISAN BICKERING THAT IS NATURAL IN NORMAL TIMES AND GETTING WORK DONE. YOU EVEN SEE THAT IN THE FINANCES THAT WE'RE TALKING ABOUT HERE. THE ONTARIO GOVERNMENT HAS LOST 10 BILLION DOLLARS IN TAX REVENUE JUST FROM WHAT IT WAS EXPECTING IN MARCH, AND AGAIN, I KEEP EMPHASIZING: IT WAS ALREADY LOOKING BAD IN MARCH. BUT THE FEDERAL GOVERNMENT HAS STEPPED IN WITH 6 BILLION DOLLARS IN NEW TRANSFER MONEY. THAT OBVIOUSLY DOESN'T REPLACE EVERYTHING THAT THE PROVINCE WAS, YOU KNOW, HOPING TO SEE, BUT IT CERTAINLY IS HELPING.

Steve says YOU KNOW, I HAVE SEEN THE SHOW BREAKING BAD, SO I DO GET THIS NEXT JOKE.

JOHN MICHAEL laughs and says WHERE IS THIS GOING?

STEVE laughs and says WELL, YOU WONDER, RIGHT? SO, WHEN SOMEBODY SENT ME THIS TEXT EARLIER TODAY, I DID GET THE JOKE, BUT THAT'S ALL I KNOW ABOUT THIS SUBJECT. AND IT, UM... WELL, THE JOKE GOES LIKE THIS. LIVING IN CANADA IS LIKE HAVING AN APARTMENT ABOVE A METH SHOP. UH, THAT'S A REFERENCE TO DONALD TRUMP'S AMERICA. WHEN YOU CONSIDER HOW WELL OUR POLITICIANS HERE ARE GETTING ALONG, AND HOW BADLY THEY ARE DOWN THERE, UM, THE LINE, I GUESS, DOES HAVE SOME RESONANCE. LET'S JUST PUT IT THAT WAY. OKAY. FROM FINANCES TO EDUCATION. WE DO NEED TO REVISIT THE ISSUE OF HOW PREPARED OUR SCHOOLS ARE TO WELCOME BACK STUDENTS, IN SOME CASES, IN JUST A COUPLE OF WEEKS. ESSENTIALLY, THE DEBATE HAS BEEN SHOULD WE BE HOLDING ELEMENTARY SCHOOL CLASSES WITH AS MANY AS 30 STUDENTS IN THEM. WHERE ARE WE AT ON THAT ISSUE NOW?

John Michael says SO, THE DEBATE HAS REALLY FOCUSED ON ELEMENTARY SCHOOL CLASS SIZES, BECAUSE HIGH SCHOOL STUDENTS ARE ALREADY GOING TO BE DOING REMOTE LEARNING FOR HALF THE TIME, AND THEY ALREADY HAVE SMALLER CLASSES THAN THE ELEMENTARY GRADES TO BEGIN WITH. THE PROVINCE HADN'T REALLY MADE ANY KIND OF PLANS TO SHRINK CLASS SIZES, LEADING TO THE CONCERN THAT THERE WAS NO WAY THAT KIDS COULD REASONABLY KEEP TWO METRES AWAY FROM EACH OTHER. EDUCATION MINISTER STEPHEN LECCE ANNOUNCED THAT HE'S DIRECTING SCHOOL BOARDS TO SPEND 500 MILLION DOLLARS FROM THEIR RESERVES TO OPEN UP NEW SPACE TO REDUCE CLASS SIZES. THAT'S SCHOOL BOARD MONEY. AND HE'S ALSO COMMITTING PROVINCIAL MONEY TO THE TUNE OF 50 MILLION DOLLARS FROM QUEEN'S PARK TO IMPROVE VENTILATION IN CLASSROOMS. THIS IS PERHAPS AN OBVIOUS PRIORITY IN A RESPIRATORY PANDEMIC. THE PROVINCE IS ALSO DIRECTING SCHOOL BOARDS TO ENSURE THAT ANYONE WHO CHOOSES DISTANCE LEARNING WILL GET FULL-DAY, ONLINE LEARNING FOR THE EQUIVALENT OF 70 percent OF A NORMAL SCHOOL DAY. THE PROVINCE'S SCHOOL BOARDS HAVE BEEN GOING BACK AND FORTH, AND THE TEACHERS' UNIONS HAVE BEEN GOING BACK AND FORTH ON THIS NUMBER, AND THE TEACHERS' UNIONS HAD NOTED THAT THEY WON'T JUST BE DOING FULL-DAY CLASSES. THEY ARE ALSO EXPECTED TO DO ONE-ON-ONE ONLINE LEARNING WITH SOME STUDENTS, AND THEY WERE WORRIED THAT EFFECTIVELY, IF YOU SAID 100 percent OF A NORMAL SCHOOL DAY WOULD HAVE TO BE ONLINE, THAT THEY WOULD END UP SQUEEZING OUT THAT ONE-ON-ONE TIME. SO, THE GOVERNMENT HAS SAID 75 percent. THIS WAS ALL PART OF AN ANNOUNCEMENT THAT MINISTER LECCE MADE RELATIVELY LATE IN THE DAY AT QUEEN'S PARK ON THURSDAY.

Steve says WELL, LET'S... HOW DO I KNOW HOW TO PUT THIS? YOU KNOW, OUR JOB HERE IS NOT TO BE DIFFICULT, BUT IT IS OUR JOB TO SORT OF POINT OUT, YOU KNOW, FACTS. AND THE FACT IS, FOR THE LAST WEEK OR MORE, BOTH THE EDUCATION MINISTER AND THE PREMIER OF THE PROVINCE HAVE BEEN SAYING, "WE'VE ROLLED OUT OUR SCHOOL REOPENING PLAN. "WE LIKE THE PLAN. WE'VE TAKEN GOOD ADVICE "TO PUT THE PLAN TOGETHER. "WE THINK IT'S A 10 OUT OF 10, AND LET'S JUST SEE WHAT HAPPENS." THERE'S BEEN QUITE A FIRESTORM OF REACTION TO THAT PLAN, AND MY IMPRESSION WAS THAT THE ISSUE WAS NOT GOING TO GO AWAY. SO, THIS 10 OUT OF 10 PLAN APPARENTLY, I GUESS, MAYBE WASN'T, BECAUSE OBVIOUSLY, THEY'VE MADE AN ANNOUNCEMENT TODAY OF FURTHER MONEY. AND I'M INTERESTED IN THE FACT THAT, YOU KNOW, SCHOOLS ARE ALLOWED TO SPEND 500 MILLION DOLLARS FROM THEIR SCHOOL BOARD RESERVES. THERE ARE FOUR SCHOOL BOARDS IN THIS PROVINCE, APPARENTLY, THAT HAVE NO MONEY IN THEIR RESERVES AT ALL, SO I'M NOT EXACTLY CLEAR HOW THAT'S GOING TO WORK OUT. THE ELEMENTARY TEACHERS HAVE BEEN SPENDING SOME BIG BUCKS, ADVERTISING THEIR CONCERNS ON RADIO SHOWS. OTHER INTEREST GROUPS HAVE NOT BEEN SOLD. THERE'S BEEN A LOT OF CHATTER ON TWITTER ABOUT THIS, WHICH ADMITTEDLY IS NOT REAL LIFE, BUT IT'S A REFLECTION OF SOMETHING. WHAT'S YOUR SENSE? AND ADMITTEDLY, WE'RE LITERALLY IN THE FIRST MINUTES HERE, POST-LECCE ANNOUNCEMENT... AS TO WHETHER OR NOT THIS IS GOING TO ALLAY SOME OF THE CRITICISMS? WHAT'S YOUR SENSE OF WHETHER OR NOT HE'S BEEN ABLE TO DO THAT TODAY?

John Michael says WELL, YOU ALREADY MENTIONED THE FOUR BOARDS THAT DON'T HAVE RESERVES. THE GOVERNMENT SAYS IT'S GOING TO COME IN WITH TOP-UP FUNDING FOR THOSE FOUR BOARDS SPECIFICALLY. THAT NUMBER, BY THE WAY, IS OF COURSE CONTROVERSIAL. JUST BEFORE HOPPING INTO THE PODCASTING CLOSET HERE, I SAW REMARKS FROM THE HEAD OF ETFO, THE ELEMENTARY TEACHERS' UNION, SAYING THAT THERE ARE IN FACT 40 BOARDS WHO DON'T HAVE RESERVES THAT THEY CAN REALISTICALLY DRAW ON. SO, THAT WILL HAVE TO BE HASHED OUT SOMEHOW. SOME OF THIS MONEY COULD COME, POTENTIALLY, FROM IMPORTANT OTHER PRIORITIES THAT SCHOOL BOARDS STILL HAVE TO MEET. LIKE, THERE ARE SCHOOL BOARDS AROUND THIS PROVINCE WHO ARE STILL BUILDING NEW SCHOOLS, THAT KIND OF THING. SO, IT'S NOT CLEAR WHETHER THAT WILL IMPACT THOSE ANNOUNCEMENTS. YOU KNOW, I THINK THE BIGGER THING THAT WE'RE GOING TO HAVE TO SEE IS WHAT PARENTS ACTUALLY SEE HAPPEN ON THE GROUND. THERE IS A TENDENCY AT QUEEN'S PARK... AND I REALLY WANT TO EMPHASIZE THAT I'M NOT MAKING THIS AS A PARTISAN POINT. I HAVE SEEN IT BOTH FROM THE PREVIOUS LIBERAL GOVERNMENT AND FROM THIS ONE. THERE IS A TENDENCY FOR QUEEN'S PARK TO MAKE AN ANNOUNCEMENT ABOUT EDUCATION POLICY, AND THEN PUSH IMPLEMENTATION TO THE SCHOOL BOARDS. AND THEN, WHEN THINGS DON'T GO WELL... AND I'M THINKING OF IN THE LIBERAL GOVERNMENT, WHEN LOCAL SCHOOL BOARDS HAD TO MAKE DECISIONS ABOUT CLOSING SCHOOLS BECAUSE PROVINCIAL FUNDING WASN'T THERE TO KEEP THE SCHOOLS OPEN, THE BLAME FALLS ON THE SCHOOL BOARDS. AND IT DOESN'T REALLY SOLVE ANYTHING, BECAUSE ONTARIO VOTERS KNOW THAT QUEEN'S PARK IS REALLY THE ONE THAT MAKES THESE DECISIONS IN THE FINAL ACCOUNT. SO, WE WILL SEE. I THINK THERE IS AN INITIAL INSTINCT AT QUEEN'S PARK TO SEE IF A SCHOOL BOARD... OR PUSHING THESE THINGS TO THE SCHOOL BOARDS, RATHER, CAN SORT OF SETTLE THE POLITICAL PROBLEM. BUT PARENTS AREN'T DUMMIES.
(LAUGHING)
I SAY THAT AS A PARENT. SO, AT LEAST I HOPE WE'RE NOT DUMMIES.

(STEVE CHUCKLING)

John Michael says AND IF YOU SEE THINGS THAT ARE JUST NOT WORKING ON THE GROUND IN REAL LIFE WITH YOUR KIDS, PEOPLE AREN'T GOING TO SIT QUIETLY FOR THAT.

Steve says YOU KNOW, WE'VE FINALLY FOUND A POINT OF DISAGREEMENT BETWEEN THE TWO OF US, BECAUSE I AM A DUMMY, AND I AM THE PARENT OF A PUBLIC HIGH SCHOOL STUDENT.

(JOHN MICHAEL LAUGHING)

Steve continues AND THE REASON I KNOW I'M A DUMMY IS BECAUSE MY 17-YEAR-OLD TELLS ME EVERY DAY THAT I AM ONE.

(CHUCKLING)

Steve continues SO, WE'VE FOUND SOMETHING TO ARGUE ABOUT HERE.

John Michael says WELL, MY DAUGHTER HASN'T GOTTEN THERE YET, BUT I'VE GOT SOME YEARS.

Steve says NO. SHE'S TOO YOUNG. YOU WAIT FOR IT. IT'S COMING, PAL. IT'S COMING. BUT OKAY. FOR ARGUMENT'S SAKE, LET ME JUST TAKE US THROUGH THE GOVERNMENT'S SIDE OF THIS, WHICH IS, YOU KNOW, PREMIER FORD DID ASK A REASONABLE QUESTION AT YESTERDAY'S DAILY BRIEFING, WHEN HE POINTED OUT... HE SAID, "LOOK. I'M GETTING ALONG JUST GREAT "WITH THE FEDERAL LIBERAL GOVERNMENT. "I AM GETTING ALONG JUST GREAT WITH THE MAYOR OF TORONTO, JOHN TORY." WHO, YOU KNOW, BEFORE THE PANDEMIC HIT, HE WAS CONSTANTLY AT LOGGERHEADS WITH. HE SAYS, "I GET ALONG GREAT WITH THE NDP PREMIER OF BRITISH COLUMBIA." HE LISTED A BUNCH OF OTHER POLITICIANS FROM VARIOUS LEVELS OF GOVERNMENT WHO MAY NOT SHARE HIS PARTY'S STRIPE BUT WITH WHOM HE'S DOING WELL AND GETTING ALONG WITH AND WORKING TOGETHER. AND THEN HE SAYS, "BUT THE TEACHER UNIONS?" HE SAYS, "I LOVE THE TEACHERS, BUT FOR SOME REASON, "THE TEACHER UNIONS WANT TO PICK A FIGHT WITH ME AND I DON'T KNOW WHY." BECAUSE HE WOULD SAY HE'S DEMONSTRATED, YOU KNOW, THAT HE'S ARG... HE'S DEMONSTRATED BARGAINING IN GOOD FAITH WITH THE TEACHER UNIONS. THEY'VE COMPLAINED ABOUT SOME OF THE THINGS THEY THOUGHT NEEDED DOING. HERE'S THE ANNOUNCEMENT ON THURSDAY BY STEPHEN LECCE TO MAKE SOME IMPROVEMENTS TO WHAT THEY ALREADY THOUGHT WAS A GOOD PLAN. THAT'S THE PREMIER'S POINT OF VIEW. DOES HE HAVE A POINT?

JOHN MICHAEL chuckles, then says I MEAN, TEACHERS' UNIONS ARE NOT GIVING THE TORIES THE BENEFIT OF THE DOUBT. FILM AT 11, RIGHT?

(BOTH LAUGHING)

Steve says "THIS JUST IN."

John Michael says NO. I THINK THE GOVERNMENT HAS NOT EXACTLY BEEN A MODEL OF CLARITY AND CONSISTENCY HERE. THE... IF WE CAST OUR MINDS BACK TO, WHAT WAS, IT, JUNE? WE WERE SUPPOSED TO HAVE A FULLY FLESHED-OUT PLAN FOR THE RETURN OF STUDENTS TO SCHOOL BY THE END OF JUNE. THAT ANNOUNCEMENT ENDED UP BEING THAT SCHOOL BOARDS WERE BEING TOLD TO PREPARE FOR THREE PLANS. THEN, AS THE PANDEMIC HAS EVOLVED, THE GOVERNMENT CHANGED ITS PLAN AGAIN. AND I THINK, YOU KNOW, THAT'S A TOTALLY DEFENSIBLE DECISION FOR THE GOVERNMENT TO MAKE. IN FACT, I KIND OF WANT TO SEE A GOVERNMENT THAT IS ABLE TO ROLL WITH THE PUNCHES A LITTLE BIT. BUT FROM THE TEACHERS' PERSPECTIVE, THEY ARE NOW LOOKING AT T-MINUS, WHAT, THREE WEEKS BEFORE THEY HAVE TO BE BACK IN SCHOOL, WITH STUDENTS. AND IT HAS NOT EXACTLY BEEN EXTREMELY CLEAR WHAT THEIR JOBS WILL ENTAIL AND WHAT RESOURCES WILL BE AVAILABLE TO THEM TO DO THOSE JOBS. SO, I MEAN, THERE IS THE SORT OF BASIC PARTISAN POINT THAT THE TEACHERS' UNIONS... LET'S JUST SAY THEY DID NOT SUPPORT THE TORIES IN THE LAST ELECTION, AND I DON'T EXPECT THEM TO IN THE NEXT ONE. BUT I DO THINK THERE IS ALSO A FAIR QUESTION OF WHETHER THE GOVERNMENT HAS COMMUNICATED THINGS ON ITS SIDE FAIRLY, EITHER.

Steve says THERE WE GO. ALL RIGHT. WE ALWAYS CONCLUDE THIS PODCAST WITH OUR FAVOURITE QUOTES OF THE WEEK, AND WE'LL HAVE THOSE IMMEDIATELY AFTER WE ASK YOU TO GIVE US A RATING ON APPLE PODCASTS. WE ALWAYS LOVE YOUR FEEDBACK.

John Michael says AND IF YOU'D LIKE TO SEND US A COMMENT, SHOOT US AN E-MAIL AT ONPOLITICS@TVO.ORG, OR TWEET AT US. I'M @JM_MCGRATH.

Steve says AND I'M @SPAIKIN. THAT'S S-P-A-I-K-I-N.

John Michael says SUBSCRIBE TO THE ONPOLI PODCAST ON APPLE PODCASTS, GOOGLE PLAY, SPOTIFY OR YOUR FAVOURITE PODCAST APP.

Steve says HERE NOW, MY QUOTE OF THE DAY. AND IF YOU WANT TO KNOW WHY SO MANY LOCAL POLITICIANS ARE SAYING SUCH GOOD THINGS ABOUT DOUG FORD THESE DAYS, CONSIDER THIS. AT THURSDAY'S DAILY BRIEFING, WHICH TOOK PLACE IN WINDSOR, ONTARIO, THE PREMIER GOT THROUGH HIS OPENING SPIEL AND THEN, AS HE WAS ABOUT TO TAKE QUESTIONS, ROB BENZIE FROM THE TORONTO STAR WAS THE FIRST PERSON IN LINE TO ASK A QUESTION, ON THE PHONE OF COURSE. AND THE PREMIER, JUST AS ROB WAS GETTING ROLLING ON HIS QUESTION, SAID, "ACTUALLY, ROB, CAN YOU HOLD ON FOR ONE SECOND? "HOLD OFF ON THAT FIRST QUESTION, BECAUSE I GOT SOMETHING I WANT TO SAY FIRST." HERE'S THE PREMIER. HAVE A LISTEN.

In a recording, a female COORDINATOR says YOUR FIRST QUESTION COMES FROM ROBERT BENZIE FROM THE TORONTO STAR. PLEASE GO AHEAD.

Premier Ford says WELL, ROBERT, CAN YOU JUST HOLD ON THERE FOR TWO SECONDS THERE, ROBERT?

Rob says YEAH. SURE, PREMIER. SURE.

Ford says YOU KNOW, I JUST HAD LUNCH WITH 10 GREAT MAYORS. AND YOU KNOW, VERY SELDOM DO YOU GET 10 MAYORS IN A REGION AND THEY'RE ALL SINGING OFF THE SAME SONG SHEET. I CAN ASSURE YOU, DOWN HERE IN THE CHATHAM-KENT, WINDSOR-ESSEX AREA, EVERYONE'S SINGING OFF THE SAME SONG SHEET. AND YOU ALWAYS... "WHAT'S YOUR ASK?" BASICALLY, THAT'S WHAT I ALWAYS FIND OUT. WHAT ARE THEIR CONCERNS, THEIR COMMUNITY'S? NO ONE UNDERSTANDS THE COMMUNITIES BETTER THAN MUNICIPALLY ELECTED MAYORS, COUNCILLORS. AND MAYORS, I KNOW THIS WASN'T SCRIPTED, BUT IF I COULD ASK YOU TO JUST COME IN, SAY WHO YOU ARE AND WHAT REGION YOU REPRESENT? AND I JUST WANT EVERYONE TO KNOW WHAT A GREAT BUNCH OF MAYORS WE HAVE.

The clip ends.

Steve says THERE'S DOUG FORD, GIVING THE SPOTLIGHT AT HIS DAILY BRIEFING TO 10 MAYORS OF SMALL COMMUNITIES IN SOUTHWESTERN ONTARIO, ALL OF WHOM CAME UP TO THE MICROPHONE AND IDENTIFIED THEMSELVES. THAT'S A LITTLE SHOT OF PRIME-TIME FOR THEM, AND IN POLITICS, THAT GOES A LONG WAY WHEN IT COMES TO RELATIONSHIP-BUILDING.

John Michael says AND MY QUOTE OF THE DAY IS FROM YESTERDAY, ACTUALLY. FROM THE MINISTER OF FINANCE, ROD PHILLIPS, WHO WAS ASKED HOW HE EXPLAINS RECORD DEFICITS TO CONSERVATIVE SUPPORTERS WHO PROBABLY THOUGHT IN 2018 THAT THEY WERE VOTING FOR THE SMALL-GOVERNMENT PARTY.

In a clip, Rod Phillips says BUT THERE ARE TWO WORDS FOR IT: A GLOBAL PANDEMIC. THIS IS AN UNPRECEDENTED HEALTH CRISIS INTERNATIONALLY. I THINK THE PROGRESS THAT ONTARIO IS MAKING IS EMBLEMATIC OF A PLAN THAT WE LAID OUT IN APRIL THAT IS WORKING. AGAIN, LESS THAN A HUNDRED CASES TODAY. AND THIS DOESN'T MEAN THAT WE CAN REST ON OUR LAURELS. THERE IS STILL RISK IN COVID-19. BUT I BELIEVE THAT THE INVESTMENTS WE'VE MADE AND THE APPROACH WE'VE TAKEN, WHICH IS DELIBERATE... YOU KNOW, WE ALWAYS SAID WE ARE GOING TO BE STEADY AND WE'RE GOING TO BE CAREFUL WHEN IT COMES TO THE HEALTH OF ONTARIANS. BUT THAT THAT'S ALSO THE BEST APPROACH FOR THE ECONOMY.

John Michael says THAT'S FINANCE MINISTER ROD PHILLIPS, EXPLAINING HOW THE PROGRESSIVE CONSERVATIVES RACKED UP THE LARGEST DEFICITS IN ONTARIO HISTORY.

Steve says THAT IS WHAT YOU CALL IRONY.

(JOHN MICHAEL CHUCKLING)

Steve says AND THERE WE GO. THAT IS EPISODE 76 FOR THE ONPOLI PODCAST. THANKS TO PRODUCERS KATIE O'CONNOR AND AUDIO WIZARD MATTHEW O'MARA. JMM, AS WE LIKE TO SAY, STAY POSITIVE. TEST NEGATIVE.

John Michael says HAVE A GOOD WEEKEND, STEVE.

Jazzy music plays.

Watch: Ep 76 - Ontario's frightening bottom line