Rivers: As budgets go this is a pretty good one. Ontario is back as an economic powerhouse.

Rivers 100x100By Ray Rivers

May 5th, 2017



The Duke of Edinburgh, Prince Philip, has had enough and is retiring from his official duties serving the Queendom of England, Scotland, Northern Ireland and Wales. And why not? He’ll be turning 95 years this year. And the biggest part of his old job was cutting ribbons, visiting the colonies and keeping two careful steps behind the real power on the throne. ‘Bin there, ‘dun that – time to move onto other things.

Premier Wynne runs a job training course for MAyor and NAME, gYPTECH

Premier Wynne runs a job training course for Mayor and Rotary official at Ribfest.

Ontario’s Kathleen Wynne isn’t royalty but she also has a palace, the Pink One. And she has tumbled so far down the polls since the last election, barely skirting single digits, that you’d think it would be time for her to perform that preverbal ‘walk in the snow’ and retire as well. Though she’s not anywhere near Prince Philip’s ripe old 95, she has had an impressive career including being Premier of Canada’s largest province. There’s no shame in voluntarily leaving office with that kind of rap sheet.

But the province announced its annual budget last week and now, all bets are off. It was a blockbuster budget that should restore confidence in her party, even if you think the Liberals reign of almost 15 years has been too long. But this year’s budget is actually balanced folks. For the first time in a decade, in fact since Dalton McGuinty ran balanced budgets ahead of the recession in 2008, Ontario is out of the red.

Budget on 2017 revenue side

Where the money comes from …

Budget on 2017 spending

… how we spend it.

Sure, Stephen Harper balanced the federal budget three years earlier. But he had to sell off some serious furniture (GM shares) to make it happen. And even if he’d won the 2015 election, the way his government was heading was back towards deficit again. And Harper’s austerity plan for Canada to return to balance included some of the largest public service cuts ever, as he tried to shave costs.

By contrast, the Wynne government was relatively expansionary, adding full-time kindergarten for 260,000 children; introducing free tuition for needy students and free dental care for children in low-income families, and tackling a promised $50 billion investment in infrastructure programs. Despite that, Finance Minister Charles Sousa has committed to an ongoing string of balanced budgets.

The province has the strongest economic growth in Canada In fact Ontario’s economy is well ahead of all the rest of the G7 including the USA, and with unemployment numbers lower than at any time since the 2008 recession. Of course the lower exchange rate has helped, as has revitalized federal infrastructure spending, but the Premier’s people will tell you they’ve been planning this for a long time.

So a strong economy means that, even with a balanced budget, we can still afford to undertake new initiatives like a new universal pharmacare program for those under 25. Also in the budget is more money to cut hospital wait times. And then there is the on-going commitment for billions in new infrastructure, including more to ensure reliability of the electricity sector and to subsidize lower income electricity users.

And to all those hand waving critics complaining about how Ontario’s electricity rates were killing jobs and the economy – I guess they were wrong. And they were wrong even before the Premier announced her new Hydro Plan, which will reduce consumer rates by up to 25%, starting later this summer. Of course there is no such thing as a free lunch so we’ll be ultimately paying for that re-mortgaging of hydro costs.

But the jobs and economic growth tell us that higher electricity rates have also provided incentives for the development of new energy technologies, such as LED light bulbs. And that kind of innovation together with the adoption of renewable energy, has likely generated more jobs than were ever lost from the spectre of high electricity rates.


We aren’t sure if we have a friend in the White House. President Trump does like our Prime Minister.

So as budgets go this is a pretty good one on just about all accounts, detractors notwithstanding. Of course the debt will still need to be reckoned with, but that is another story. The point is that Ontario is back as an economic powerhouse. And when you are the Premier of a province doing as well as this one, you have a mighty powerful reason to give it another go come next year’s election.

Still there are dark clouds on the horizon given that unpredictable man in the White House, who just happens to be our nearest and dearest trading partner. Then there is the housing bubble which is unsustainable, and is already starting to show cracks, despite the government’s new bandages to help curb crazy prices.

Ontario Premier Kathleen Wynne speaks at the hearings into the gas plant cancellations at Queen's Park in Toronto on December 3, 2013. THE CANADIAN PRESS/Mark Blinch

Ontario Premier Kathleen Wynne – crafty, strategic with a track record that is going to be hard to beat.

And nothing is perfectly predictable in politics, the public can sometimes be fickle, ornery, irrational, mean spirited or just bored with a good thing.. Look at Brexit, Trump and perhaps the French election this weekend.

But if the next provincial budget, which will be the real election budget, is anything like this one, Kathleen Wynne should be hard to beat come election day despite her current polling malaise. And that means she won’t be leaving the pink palace and joining Prince Phillip into retirement anytime soon.

Rivers-direct-into-camera1-173x300Ray Rivers writes weekly on both federal and provincial politics, applying his more than 25 years as a federal bureaucrat to his thinking.  Rivers was a candidate for provincial office in Burlington in 1995.  He was the founder of the Burlington citizen committee on sustainability at a time when climate warming was a hotly debated subject.     Tweet @rayzrivers


Background links:

Prince PhillipPremier’s polling –   Canada’s Deficits –   Ontario Budget

Budget Highlights –   More Highlights –   Budget Winners and Losers

New Hydro Plan –    Pink Palace –    Detractors –    More Detractors




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7 comments to Rivers: As budgets go this is a pretty good one. Ontario is back as an economic powerhouse.

  • D.Duck

    OMG again!

    Let’s disclose some truth.

    1) Are you actually saying that this summer there is another 25% discount on Hydro consumer rates in addition to the already 8 per cent rebate of the provincial portion of the harmonized sales tax that took effect on
    January 1/17…..so that would be a total of 33% reduction OR is your statement misleading?

    2) Harper’s sale of ‘GM shares’ (stock purchased to help bail out a struggling automaker) to balance the Federal budget may not have been the most prudent time to sell BUT Ontario also sold their 1.1billion investment in February of that year to help their bottom line. Did you forget to mention this??

    3) Did not Wynne sell a large portion of the Ontario Publicly owned and funded Hydro One and now wishes to download the exorbitant infra-structure costs to our children? Did not that money, as well as selling off of gov’t buildings, go to help balance the budget?

    4) Tell me about Wynne’s Ontario’s escalating $312 Billion debt and whose responsibility will that fall upon?

    5) Sure, you can bribe teachers with increase to their salaries and benefits over the next 2yrs and hope for their votes in 2018. But first let’s pay HS teachers another $1000-3000 dollars each for their recent court verdict over the Ontario Gov’t. You pontificate that there will be a Pharma program for those under 25yrs and that secondary schooling will be free for those in need but the ‘miniscule fine writing’ is somewhat obscure in disclosure. Just good spin-doctoring.

    6) Tell me about Ontario’s pitiful healthcare as pointed out by the Toronto Star of all newspapers (By THERESA BOYLE: Sun., April 16, 2017) and please don’t besmirch the good name of all healthcare workers without first including the MOHLTC bureaucrats who initiated these measures.

    Wynne is doing what ALL failing politicians do………..promise the world while hoping for population myopia and senility in regards to the multitude of fiscal mismanages costing several Billions of dollars while under their
    non-transparent governance.

  • Ray Rivers

    Thanks for comments all. Gary, that is a good question and I believe there is a lag in the equalization program. So just as it took Ontario longer to get onto the welfare train in the bad times – it is taking longer to get off for the same reason. Here isa link to the Conference Board’s discussion on that…. https://www.conferenceboard.ca/economics/hot_eco_topics/default/16-05-24/ontario_s_equalization_revenues_to_%E2%80%9Chave%E2%80%9D_or_to_%E2%80%9Chave_not%E2%80%9D.aspx

  • Stephen White

    Those hand-wringing critics like me complaining about Hydro rates weren’t wrong. We just pointed out the obvious anomaly that Ontario’s hydro rates were three times Manitoba’s and twice Quebec’s. At the height of this nonsense 6,800 homes in Ontario had their power disconnected. 660,000 hydro users were in arrears. The only reason she acted was because her feckless Energy Minister was constantly being embarrassed by the media because of the heavy-handed manner in which consumers were treated by having their power disconnected. As for her green agenda, she has backtracked on so many programs and initiatives that the original plan is now unrecognizable.

    Kathleen Wynne’s government has been a travesty for this province. This administration wastes millions on silly feel good advertising that says nothing and imparts no value. The medical system is a mess. Wait times in emergency rooms are escalating. It takes months, even years, for routine surgeries. Ontario’s accumulated debt load is the highest in North America…even higher than California’s. Drive along any street in Burlington like Harvester or Fairview and count the “For Sale”, “For Lease” and “For Rent” signs on industrial/commercial properties. Her government pushes a generous pharmacare program for young people while cutting back on much need and critical medical support for seniors (e.g. physiotherapy, chiropractors, etc.).

    The only thing fuelling the economy is the housing market. If interest rates rise in response to the U.S. Federal Reserve rate hikes there will be a huge outflow of capital to the U.S. Watch as the housing market tanks, properties decline, and the number of “quit claims” skyrockets.

    Here’s the real tragedy. The Ontario Liberal Party is so moribund that, even though they are at the second lowest level of public support of any government in Canadian history, there isn’t a single Cabinet Minister of backbenchers with the guts to step forward and challenge her leadership. When your backroom political wheelers and dealers like Greg Sorbara tell you your in trouble it’s probably a good thing to start listening and start planning your retirement:


  • Gary

    “And nothing is perfectly predictable in politics, the public can sometimes be fickle, ornery, irrational, mean spirited or just bored with a good thing.”

    Maybe, to paraphrase a former East German cynic, the government should dissolve the electorate and appoint a new one.

    I am curious about that $24.68 million in federal transfer payments which amount to around 19% of the projected income. If Ontario is “back” to being the economic powerhouse it used to be before McGuinty/Wynne screwed it all up, why would the feds need to transfer any money — isn’t that supposed to be for the “have-not” provinces?

    I certainly do hope Wynne decides on a last hurrah and gives Ontario a chance to show her the fire escape exit from the building.

  • steve

    The advantage of the lower Canadian dollar will be wiped out when America’s energy costs go down, and they will be going “down”, and Ontario’s keeps goes up up up. If a realistic plan isn’t acted upon using Ontario’s cheap clean natural gas, then Ontario will pay a heavy price in the not so distant future. There will be a mass exodus to the south when this reality unfolds.

  • Doug

    I guess Rivers has gotten into some of Trudeau’s whackie tabaci. Tell our grandkids how great Wynne is so great when they are still paying our hydro bills plus their own they will feel better. Balance budget, more smoke and mirrors from Wynne, showing pension dollars in general coffers just one of her tricks.

    Disclaimers should be put into place telling readers when a Liberal/ex Gov employee is the author. Will we ever get back to days when columnist state facts and not their own opinion, so readers can determine for themselves.