Ontario Premier Dalton McGuinty has bought himself a little time to tame a public increasingly frustrated by a struggling economy and provincial policies that are far-sighted, almost to a fault. A credit reducing the cost of every electricity bill by 10 per cent will bring some pocketbook relief, perhaps $100 a year or more for many ratepayers. It was a necessary, politically expedient gesture, one that suggests the government has begun to understand the struggles of Ontarians.
Yet while the government has announced a hydro rate cut, many Ontarians will still be paying more; the combined effects of the HST and increasing rates (46 per cent over five years, according to a new government estimate) will largely negate the new credit in the short run. And from a fiscal point of view, the move is expensive: $300-million for the rest of 2010-11, around $6-billion over five years.
In fact, most of the fall economic statement released by Finance Minister Dwight Duncan results in a wash. The province will make an immediate $1-billion by extending the Teranet Inc. contract for land registration for 50 years. But it plans on paying around $1-billion more in debt payments this year. And the profits from the province's lucrative energy Crown corporations, will, for the foreseeable future, pay for the new energy credit, rather than go to the bottom line.
The government has made a few strides taming public sector wages: of the 12 major collective agreements reached in the broader public sector since the end of August, seven have held the line on wage increases for two years. Mr. Duncan said, "To those unions and employers who have responded to our request for help, we say thank you." The words were gracious, but what's needed is tougher talk for arbitrators that are awarding, and those larger unions that are winning, unsustainable increases.
On all these questions, the opposition parties have contributed little. Progressive Conservative Leader Tim Hudak has gained some traction in the polls by attacking Mr. McGuinty's hydro, tax and post-secondary policies, but he is still offering more sound bites than solutions.
The Ontario Liberals' far-sighted agenda may stand Ontario in good stead when the economy fully rebounds. Yesterday's economic statement is only the beginning of their effort to be sure that when the time comes, they are still the party in power.