McGuinty imposes moratorium on bad news

Thursday, July 6, 2006

With the date of the next Ontario election having been fixed for October 2007, the last thing that Dalton McGuinty wants is for voters to be receiving any bad news between now and that time. Thus, even though he railed against his predecessor for hiding a significant structural budget deficit under a shell marked “surplus”, McGuinty is now engaged in a similarly cynical game of manipulating the calendar for his political benefit.

Indeed, he even wants to ensure that he times the good news so that it doesn’t come too early, which is why temporary Finance Minister Dwight Duncan’s only Provincial Budget worked so hard to find new spending initiatives that would cancel out an unexpected surge in revenue. After all, the Liberals can’t be seen to eliminate the deficit left over from the Conservatives too soon, can they? Far better to do so just before the election is held so that they can enter the campaign carrying the head to the deficit dragon that they have finally slaughtered. That way, there will be fewer nasty questions about whether their Health “Premium” was really necessary or whether OHIP coverage for optometry, chiropractic and physiotherapy needed to be dropped.

More importantly, McGuinty and his advisors are systematically postponing every conceivable irritant that might cool the warm feelings that voters are supposed to have about the Liberals at Queen’s Park. That means that any outstanding promises from the 2003 election are not supposed to be broken before election day in 2007. So, if you’ve promised to phase out coal-fired power plants by 2007 and have absolutely no idea of how you’re going to accomplish that, it’s much easier to say that you’ve delayed the shutdown until 2009 than it is to say that you don’t know when – or whether – the promise can be kept. They now claim that they are waiting for the Ontario Power Authority to advise them on the earliest possible date for shutting down coal generation. We can expect to learn the new date sometime after October 2007.

Generation is not the only in area of the power system that seems to confound the Liberals. They’ve promised to have as many as 800,000 smart meters installed in Ontario homes by 2007. Are they going to reach this target? Well, we’ll know by the end of next year, but that won’t stop them from taking credit for the initiative during the election campaign. If it turns out that they’ve fallen short – and most experts strongly believe that they will – it’ll be too late to hold them accountable.

McGuinty also needs to decide whether to build a new high voltage transmission line from Bruce County to the Greater Toronto Area. It’s a virtual certainty that they’ll need to do so, but the decision won’t be announced for eighteen months – right after the election.

Buying time was McGuinty’s goal when he froze property reassessments for two years. After Ontario Ombudsman Andre Marin table a report that called the property tax system “a mockery,” and drew attention to the “questionable practices” of the Municipal Property Assessment Corporation (including, among other things, “cutthroat maneuvering around property owners”), it was clear that some changes were in store for MPAC and the current-value assessment system.

Ian Urquhart of The Toronto Star pointed out in a column last week that it would be entirely possible to fix the system without shutting it down. “The real reason for the freeze is that Liberal MPPs have been getting it in the ear from their constituents about skyrocketing assessments,” wrote Urquhart. “The issue has been a prime topic in the weekly behind-closed-doors meetings of the Liberal caucus, where MPPs griped they could lose their seats if something were not done.” But, property taxes are a complex issue. When you make some people happy, you make other people very unhappy. By freezing assessments for two years, all of that unpleasantness can be delayed until after those Liberal MPPs are safely back in their seats.

NDP Leader Howard Hampton has pointed out that McGuinty had initially promised to fix the system before the next election. “Putting off a property tax fix is like avoiding the dentist. You avoid some short-term pain. But in the long-run, you're just letting the problem fester and get worse,” Hampton said.

Given these and other well co-ordinated delaying tactics, there are two possible scenarios that could emerge after October 2007. If the Liberals are defeated, they can sit back and smile as their successors struggle with the legacy of hard choices having been put off. In fact, they’ll no doubt be all over the next government for making the choices that they were too cowardly to implement.

On the other hand, if McGuinty manages to pull off another election win next fall, he’ll be the one stuck with delivering the bad news (and he won’t exactly be able blame the last government anymore, will he?). But, he’ll get as much of it out of the way as possible in the first year of a second mandate, in hopes that people will have forgotten about it by October 2011. After that, he’ll need to start figuring out which tough decisions he needs to put off for another two years.
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