We have outlined in this space, the options facing a very right wing and authoritarian government, more conservative than Mike Harris in fact, has, in dealing with Ontario finances.If you absolutely feel you must lower the deficit rapidly and you eschew all forms of revenue enhancement to do it, then cuts are your only remaining option. Health and education are 65% of provincial expenditure and teachers and nurses are most of that.
The government is facing a deficit that even using Liberal figures, is higher that desirable, as a % of GPP. Fair enough, the real deficit could be in the $10-11 billion range. This dispute centers on what are or should be considered offsetting assets - an argument for dueling accountants. This even lower figure is based on the desire of the Liberals to spend, largely on transportation, but not tax. Their theory that the stimulus will generate the business activity required which can bring in revenue without tax increases, to lower the deficit without the unpopularity of taxes is fanciful to say the least.
Nevertheless, as shown by Linda McQuaig in the Toronto Star, if a government like Ford’s was sincere in their push to lower the deficit the would not have cancelled almost $4 billion in revenue by cutting the top two brackets from Ontario provincial income tax or the revenue coming from Cap and Trade. In a nutshell, cutting taxes on the 1% and the polluters. Ford Tories also reduced business taxes from 16% to 12.6% with competitive states in USA at 18.7%. The small biz surtax was reduced from 11.5% to 3.5%.
Had this not taken place, the real deficit would be in the $8 billion range. Not a great figure but a figure that could have been lowered gradually with slight adjustments over Ford’s tenure to perhaps $4 billion. Moody’s and Standard and Poors, the bond rating agencies would be very happy with an Ontario deficit of $8 billion. This figure is well within Ontario’s fiscal capacity as a percent of Gross Provincial Product.
It is in fact shocking that Ontario, one of Canada’s three richest provinces, stands last in Canada in program spending per capita, $2000 below the provincial average!
Then why was this not the course taken by Ford and Vic Fedeli his Minister of Finance and Sancho Panza? In unions we often say “if you fly with the ducks, you start to quack.” Notwithstanding Ontario’s new political contribution limits that many hoped would limit corporate power, the results have been disappointing. The Tories have shifted to a mass fundraising model but the contributors are still primarily upper income and the orientation is still towards corporate Ontario. Ford and his cabinet ministers continue to site institutions like the Canadian Federation of Independent Business, Canadian Taxpayer Federation, Fraser Institute for their data. Cutting the taxes of 1% and polluters explains their priorities. The Tory budget has actually sent over $5 billion back to business, $1.3
billion from cancellation of the minimum wage increase alone. The Tory approach is often called ‘expansionary austerity’ or simply neoliberalism.
Tories have already downsized the provincial civil service 3.5% by attrition. They plan to downsize secondary school teaching staff by 25%. Their recent budget anticipates program spending will grow only at 1% per year so with population growth and inflation, public sector costs (mostly remuneration) will decline. Post secondary education is even scheduled for -1% in the face of population growth and inflation. If Ford attempts public sector wage controls it may be set at 1% since the provincial budget anticipates 1% educational increases or it may be set at 0% since population growth, increased enrollment and inflation will eat up the 1%.
The Tories are very aware that they do have a conservative working class constituency to address. Their instinct, polling and focus groups have told them that their blue and pink collar supporters are combinations of Evangelicals, and those white, male, ‘Joe Six Pack’ voters with a libertarian streak who want more cheap beer in bigger bottles, In the Tory view, their Trump voters are the ‘tailgate party’ crown. More booze and higher speed limits are designed to keep them sweet. Ford, it is our view, would be surprised to find out that a significant segment, perhaps ⅓ of his blue collar voters are, in fact, members of CUPE, OPSEU, and even teachers and nurses, fed up with the Wynne government. The Ford cynical view of working class people grows more apparent with each passing day. Nero, to retain the support of the poor, called it “give the masses bread and circuses” Ford calls it, give them booze and tailgate parties.
Keep in mind, Ford won a huge majority with 40% of the vote. Hudak lost badly with 33%. This 7% difference are not base Tory voters. They are anti-Wynne voters. They can very easily switch back to the Liberals or NDP next election. Wage controls hardly offsets booze and higher speed limits.
What will be the response of classroom teachers, education workers and the teachers’ unions and other public sector workers to wage controls?
Classroom teachers will be demoralized by the double blow of increased class sizes, radically reduced option choices and wage controls. They will hunker down and do less. They won’t need the union to tell them this. There will be fewer extracurricular activities. Teachers will hand out and grade fewer assignments to adjust to the larger classes and wage controls. There will be less help in class and after school for each student. The system will be generally degraded.
Teachers’ unions have one card left to play. They must turn towards politics in alliance with OPSEU and CUPE, perhaps OCUFA and others.
The recommendation from this perch would be a combination of TV spots from the “Working Families Coalition” combined with a relentless ‘postcard’ campaign to the 30 weakest Tory ridings to accomplish one mission, to drive down Tory popularity to Hudak levels at least, and to target that decline to the weakest Tory swing seats. This teacher union
campaign from Harvey Bischof and OSSTF and Liz Stuart of OECTA is a critical model of future union strategy. The fact that it is an open strategy makes it that much stronger.
One thing and one thing only will cause the Tories to even moderate their policies - fear of losing the next election. Although that election is not until 2022, a buyer’s remorse can set in with the critical 7-10% of Ontario voters who determine election results. They can reach a conclusion now, that their decision to vote Ford to dump Wynne was an overreaction and carry that feeling to 2022 even though Ford will do a nice guy act starting in 2021. The most recent polls show the NDP slightly ahead of plunging Tories, 31% NDP, 30% PC, 26% Liberal 11% Green. Another poll has 75% of Ontario voters saying that Ford is on the ‘wrong track’. Another recent poll by Mainstreet has the Tories crashing through the floor into third place behind the Liberals and the NDP. Mainstreet is not IMHO the most reliable polling company so caution would say apply their + or - 3% to the data, still a stunning but not unpredictable development. Slashing popular programs to the bone seems to be unpopular. Who would have guessed? Nevertheless, the Tories would seem to be playing the old political game of hit your enemy hard and fast in the first two years and open the wallet close to the election in 2022. They are taking a calculated gamble that memories are short and people will adjust. The opposite can also happen. A permanent political view can set in and the Tories can become a ‘dead party walking’ as happened to Bob Rae.
Ford’s own radical cuts plus fight back campaigns like the OSSTF and OECTA are working. The critical part is to keep up the pressure on the weakest 30 or so Tories.
Are Wage controls Next for Ontario Teachers and Civil Servants?
The Ontario government is going through a series of “consultations” with teachers’ federations and unions in the public sector. Smokey Thomas of OPSEU is now on record as suspecting these consultations are sham hearings so that the Ontario government can check all the right boxes to stay out of legal entanglements as a prologue to wage controls. The fact is, public sector wage increases have been completely in line with the private sector for years.
The Supreme Court has been ruling against governments that either bring in wage controls or order workers back to work prematurely and unilaterally from labour actions such as strikes or work-to-rule situations. The Supremes however recognize that the governments have this right, but it must be exercised after sufficient ‘consultations’.