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Ontario Premier Kathleen Wynne is sworn in alongside Liberal MPP Charles Sousa during a swearing in ceremony at Queen's Park in Toronto on Wednesday, July 2, 2014. (Aaron Vincent Elkaim/THE CANADIAN PRESS)
Ontario Premier Kathleen Wynne is sworn in alongside Liberal MPP Charles Sousa during a swearing in ceremony at Queen's Park in Toronto on Wednesday, July 2, 2014. (Aaron Vincent Elkaim/THE CANADIAN PRESS)

Ontario's spending spree comes amid deficit warning Add to ...

Premier Kathleen Wynne has outlined a sweeping vision for Ontario, promising an “activist” government that will deliver tens of billions of dollars of new infrastructure, create a major pension plan and use public funds to rev up the sluggish economy.

But Thursday’s Throne Speech unfolded against the backdrop of a stern warning her newly re-elected government is not showing enough progress tackling the province’s $12.5-billion deficit and stabilizing its massive debt load – one of the largest in the world among sub-sovereign governments. Moody’s Investors Service changed its outlook on Ontario to “negative,” a possible prelude to a downgrading of the province’s credit rating.

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The address, delivered at the packed opening of the new legislature by Lieutenant-Governor David Onley, detailed how Ms. Wynne hopes to leave her mark on the province with a series of legacy projects. The $130-billion in infrastructure will build everything from subways to highways to schools over the next decade, while billions more will be doled out in business grants and used to kick-start development of the Ring of Fire mineral deposit in Northern Ontario. The Ontario Retirement Pension Plan, the country’s largest new social program in a generation, is meant to double retirement benefits for people who currently have no pension through their employer.

“Government has to be a force for good in people’s lives and has to take an active role,” Ms. Wynne said afterward. “Where it’s necessary, the things that people can’t do by themselves, government has to be active and take a very clear role.”

Less detailed were the speech’s pledges of fiscal prudence. While Mr. Onley said the government is “unwavering” in its resolve to balance the budget in three years, there were few specifics on what programs would see spending cuts to make it happen.

Such financial questions have nagged the Liberals for the better part of four years. Chief civil servant Peter Wallace, who stepped down last month, had repeatedly warned the government behind closed doors its plan for a balanced budget would mean slashing services – a message that was said to have caused friction with cabinet.

And on Thursday, former premier Dalton McGuinty provided a visible reminder of the party’s struggles as he watched the speech from the assembly floor. Mr. McGuinty was simultaneously faulted for wasting a billion dollars cancelling power plants and for embracing politically difficult austerity, including imposing a wage freeze on teachers. Most Liberals have strenuously avoided speaking his name since he stepped down last year, and he made no public appearances during the spring election campaign. At the Throne Speech, by contrast, he was given a seat in the second row, directly next to Ms. Wynne’s two top aides, who gave him a warm greeting.

Ms. Wynne was adamant her ambitious agenda and a balanced budget must be worked on simultaneously.

“The economy doesn’t work sequentially – we cannot put off building infrastructure until after the budget is balanced … the investments we are talking about making right now are critical to the health of the economy,” she said.

Finance Minister Charles Sousa, for his part, played down Moody’s significance: “The bankers aren’t freaking. We have controlled our spending, we have taken the necessary steps and we’re not done just yet.”

The Liberal plan for balancing the books includes giving no new money to unionized government workers in coming labour negotiations, cutting program spending and raising more revenue by hiking income taxes for people making over $150,000.

Economists and bankers are also waiting for the other major credit-rating agency, Standard & Poor’s, to weigh in. Credit analyst Mario Angastiniotis said Thursday the agency is in the middle of a review of the province and will release the results in the coming weeks.

For the most part, such concerns were put off Thursday in favour of a long to-do list for the next four years. On top of the big-ticket items, the Liberals promised a wide-ranging poverty-reduction strategy, a plan to further cut greenhouse-gas emissions and a new program to help recent high school graduates get job experience.

The speech also referenced Ms. Wynne’s trailblazing status as the province’s first female premier, and pointed to the fact there are more women in the current legislature than in any before it.

“Today, the building starts,” Mr. Onley said. “Building a fair and inclusive society, diverse in talent and experience but united in purpose.”

As he left the speech, even Mr. McGuinty seemed awed by the scope of what his successor is planning.

“She’s moving,” he said. “You’ve just got to hang on now.”

Follow on Twitter: @adrianmorrow

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