September 23, 2008

McGuinty faces major challenges

The Ontario Legislature resumes sitting today after a three-month recess. In the coming days, its order paper will be filled with earnest legislation like amendments to the Mining Act (to give First Nations more of a say in prospecting and mining on their traditional lands), a measure to limit toxic emissions by industries, and a ban on the use of hand-held cellphones by motorists.

There will also be an economic statement, likely in November, with some short-term fixes for the ailing provincial economy.

And in the daily question period in the Legislature, Premier Dalton McGuinty's government will come under attack for not doing enough to address the economic slump.

But McGuinty should be able to withstand the barrage, given the weakened state of the opposition, with one lame-duck leader (the NDP's Howard Hampton, who is stepping down next year) and the other on probation (the PC's John Tory, who was given a tepid endorsement by his party earlier this year).

Behind the scenes, however, McGuinty will be wrestling with two enormous decisions that will shape the province's future.

The first is whether to keep the budget balanced or to let it slide into deficit if, as expected, the current economic slump continues and significantly erodes the provincial revenue base.

The second is what kind of reactor to choose to replace the aging nuclear power plants at Pickering and Darlington.

On the deficit, even bank economists have said that, given the circumstances, it ought to be under consideration. But so far McGuinty has stuck doggedly to the goal of a balanced budget.

"Obviously if we anticipate that our revenues are going to slow down, as I've said many times in the past, we're going to have to do in government what families do at home," said McGuinty last week. "You've got to make some adjustments and you've got to make sure you're focusing on your priorities."

Thus, with one eye on the fiscal storm clouds, McGuinty has sought to dampen expectations of government assistance. He told municipalities last month not to expect instant relief from the downloading of provincial services onto their plates. And last week he suggested the timetable for his promise to reduce poverty will have to be stretched out.

So no new spending initiatives. But even existing spending – on schools, hospitals, roads, transit, courts, jails and so on – will come under pressure if the recession deepens and the treasury is further squeezed. It remains to be seen whether McGuinty's commitment to a balanced budget is sustainable in that circumstance.

As for the decision on a new nuclear reactor, in hot competition for the multi-billion-dollar contract are: Atomic Energy of Canada Ltd. (AECL), the homegrown company whose design is now in place in the province's power plants; French-owned Areva; and U.S.-based Westinghouse.

The McGuinty government would like to give the nod to AECL, which is owned by the federal government. But Ontario wants Ottawa to back up any sale with guarantees to cover cost overruns. So far, those guarantees have not been forthcoming, as Stephen Harper's government has wrestled with its own decision whether to keep AECL or sell it.

Both these decisions are due to be made next spring (the deficit in the annual provincial budget, the reactor likely in a separate announcement). The behind-the-scenes struggles that precede the decisions will be more ferocious – and hugely more significant – than the daily battles on the floor of the Legislature between the government and the opposition parties.


Major Challenge is getting rid of McGuinty

At what point will Ontarions ever get choices for good government? The current system is only about getting votes and not doing anything that benefits us. Mr. McGuinty was a reckless promiser in opposition and his party had even tried to get rid of him. He has been elected by playing the game (twice now) with no real strategic plan. You got wonder at a guy who now wants to use a web based petition when many such as tax payers association, support for parents of autistic children and even the small business association have used similar tactics with him with absolutely zero positive results. Can you say PR?

Posted by Ignorance is Bliss

don't bite the hand...

McGuinty never thought about how he's going to pay for all his massive increases in civil servants and their salaries. A strong public sector always requires a strong private sector. Someone has to pay the bills.

Posted by scamper

Grow up and govern

Have you received your property assessment yet? Lets see some real leadership and halt this annual insanity courtesy of MPAC. Mr. McGuinty road the coattails of fear in the '07 election on the religious schooling issue. It was a non starter. Mr. Tory could have OVERNIGHT turned this entire platform 180 degrees by promising a total revamp of this insane, bully pulpit tax grab. He didn't. Where were the NDP and Howard Hampton? If they raised this issue , they allowed it to be muted. The middle class is being fleeced and all the while wooed with empty promises in this campaign. WAKE UP

Posted by Steve Canyon


Sure, lets bring more competition to the provision of hydro power. Remember when Mr. Eaves let the rates for electricity float after full deregulation, and everyone hand to pay market price? The government had to step in again to prevent the public outcry from becoming riots in the streets. If we are already so incensed by the collusion of the oil conglomerates, how will it be when the electricity generators and distributors do the same thing? But by all means, Mr. Jones, lets have more competition.

Posted by sobersecondthought

Econimic denials and foolishness

McGullible was too busy boasting of irrelevant issues like banning smoking and pitbulls - the real easy stuff - how proactive. Mr Flaherty urged McG to start cutting taxes across the board, including the health tax. Instead, McG sulked and felt he was victimised - now, Ontario is in a recession and all he can do is give the doctors a big raise and shuffle the cabinet - liberals are all alike - why face reality when you can blame your foolhardyness on someone else.

Posted by freebel

Cost Over Runs

Let's end the old boys club once and for all. Ontario is shy on competition: there's very very little in hydro and very very very very little in education. This results in complacency, lack of accountability, mediocrity, and inefficiency. As Bob Rae said, " We can do better" Ontario would thrive with an injection of competition into it's highly protected socialized public work force.

Posted by Templeton Jones

No Short Term Fixes

The crisis in manufacturing has been brewing for a long time. Expect to see many more small companies in Ontario close. In the globalized economy, consolidation is a critical trend. Mass is king. Our cpompanies are typically one tenth the size of American companies. Guess who closes first when the market contracts?

Posted by Herschell Hollywood

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