Alongside the new expenditures in the leaked pre-budget communication plan the Opposition Progressive Conservatives released on Tuesday is a hint of how Kathleen Wynne’s government intends to pay for some of them.
On April 11, the document says, Finance Minister Charles Sousa will deliver a lunch-hour speech about “asset positioning” that, based on conversations with multiple sources in and around the government, will include plans to sell assets and put the money toward new infrastructure.
The most significant among imminent commitments on that front will likely be a divestiture of Ontario’s shares in General Motors. Selling all of the province’s remaining stock, which dates back to the 2009 bailout of the auto giant, could be expected to bring in somewhere in the neighbourhood of $1.4-billion at the current market price.
Mr. Sousa can also be expected to tout the sale of publicly owned property. The government has announced it intends to unload the Toronto headquarters of the Liquor Control Board of Ontario but has yet to move forward on it; in last fall’s economic update, it raised the prospect of doing likewise with the prime real estate that is home to the offices of Ontario Power Generation. And other efforts to consolidate office space and sell underused lands could bring in hundreds of millions of additional dollars.
But such moves would represent only a fraction of the money needed to finance Ms. Wynne’s ambitious plans to build new transportation infrastructure in the Greater Toronto Area and elsewhere. If the “recycling” of assets is to play a major role in financing that expansion, it will need to be far more ambitious – and that is where the government’s commitment can be expected to get more ambiguous.
Sources suggest Mr. Sousa is poised to announce some sort of process to review Ontario’s larger assets – the ones that could bring in billions of dollars if all or some were sold off. Typically, four Crown companies are central to such discussions: Hydro One, OPG, the Ontario Lottery and Gaming Corporation, and the LCBO.
Such a promise can be expected to be met with skepticism, and not just because of Ms. Wynne’s much-mocked penchant for striking panels. The fact that former premier Dalton McGuinty and his finance minister, Dwight Duncan, abandoned a brief flirtation with selling those assets raises some considerable doubt about the willingness of Ms. Wynne – who tilts to the left of her predecessor – to follow through.
At the very most, a serious move toward large-scale privatization would have to wait until after the next election. If she has any hope of keeping her minority government alive, Ms. Wynne can ill afford to adopt policies that would be anathema to Andrea Horwath’s New Democrats. And any move to reduce public control of the energy sector in particular would certainly qualify.
But gently nudging open the door to such policies this spring could indicate what will have to happen if the Liberals somehow hold on to power past the next campaign, which looks increasingly likely to be held in the coming months. Having backed away from new gasoline, sales or personal taxes, Ms. Wynne would have only so many options to fund the infrastructure those new “revenue tools” were once supposed to cover.
The subtext of Mr. Sousa’s speech next week, in other words, will likely be that some relatively easy and uncontroversial asset sales might help to get shovels in the ground on a few preferred projects; to get much built will require tougher choices the government is not prepared to make yet.