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The victor faces a forbidding landscape

Whichever party forms the next government, it will face a daunting set of expensive problems

From Saturday's Globe and Mail

In this case, the winner is also a loser.

Whichever political party forms the next Ontario government after Wednesday's election will face a daunting set of very expensive problems that will have to be confronted amid worsening economic conditions.

New contracts will have to be negotiated with public servants, teachers, nurses and doctors, a new structure for financing municipalities found, and some delicate stickhandling will be needed to deal with the volatile property-tax assessment system.

If that's not enough, the new government will also have to make some quick decisions about new nuclear power plants and try to find a way to solve the protracted confrontation with natives in Caledonia. It's even conceivable that the new government will have to implement a profound change in the way MPPs are elected.

These issues will cost billions of dollars, but economists warn that the government cannot count on the boom of the past few years to continue.

Ontario is still creating lots of jobs, as Statistics Canada reported yesterday, although its unemployment rate remains higher than the national average.

Derek Burleton of TD Economics said the provincial economy would be rocked if the United States went into recession. He is projecting growth of about 2 per cent next year, compared with 2.8 per cent in last spring's budget and the Liberal Party's estimate in August of 2.3 per cent.

"It's going to continue to be a very challenging environment," he said.

The challenges are not, however, dissuading political leaders as they embark on a frantic last few days of campaigning.

Liberal Leader Dalton McGuinty, with a 10-point lead, according to one recent poll, will set "a very heavy pace" to persuade voters that his party will continue to improve vital public services if it wins re-election, campaign spokesman Ben Chin said. He said the Liberals believe they have momentum going into the final week and that Mr. McGuinty will be going to some "surprising" places before his campaign bus makes its final stop in Ottawa on Tuesday evening.

Progressive Conservative Leader John Tory said yesterday he's confident that his troubled campaign can be salvaged. Party strategists believe that a quarter of the electorate decides how to vote in the last few days, and they are counting on discussions at the dinner table this holiday weekend to help them.

"Five days, especially in the dynamic where there's Thanksgiving family time where dinner discussions will turn to Aunt Mabel sitting there still waiting for a hip replacement," campaign spokeswoman Ingrid Thompson said. "The potential is there for that to become a very powerful moment in decisions about ballots."

New Democrat Leader Howard Hampton is planning a blitz that will end in his Northwestern Ontario constituency on the eve of voting day.

"Our message ... is that Dalton McGuinty doesn't deserve a free ride - he doesn't deserve a blank cheque - and Tory's clearly not up to his job," communications director Jeffrey Ferrier said.

The landscape that awaits one of these men is forbidding.

Labour: The McGuinty government cleverly bought peace by negotiating four-year collective agreements for 25,000 doctors, 50,000 hospital nurses and 125,000 teachers. All those deals expire in 2008, which means that the new government will be stuck in fractious negotiations by the winter. In addition, contracts covering 75,000 public servants in government offices, liquor stores, hospitals and community colleges will run out in the next 18 months.

"The people around here are using the phrase 'perfect storm' to describe it," said Randy Robinson, a spokesman for the Ontario Public Service Employees Union.

Property taxes: The Liberals punted controversy about rising levies past the election with a two-year freeze on revised assessments, but assessors will take to the streets again in January. "People have gone to sleep on this issue, but now they will very quickly wake up," said Bob Topp, chairman of the Coalition After Property Tax Reform.

The Conservatives are proposing a 5-per-cent annual cap on assessments, while the NDP wants a freeze until a house is sold. The Liberals have rejected both ideas but have instituted a grant for struggling seniors.

Municipalities: The Liberals appointed a review committee to study municipal financing that - again, conveniently - doesn't report until the new year. There are huge expectations that it will provide a blueprint to put cities on solid financial ground. A reversal of the shifting of responsibilities implemented a decade ago, which is supported by all parties, would cost around $4-billion.

"We've been struggling with a burden for 10 years," said Pat Vanini, executive director of the Association of Municipalities of Ontario.

Electricity: Planning has started for new nuclear stations (supported by the Liberals and Conservatives but opposed by the NDP). The new government will have to decide within six months which technology to pursue. The first Ontario nuclear stations will reach obsolescence by 2012, and it takes at least a decade to build a new plant.

Delaying the decision would put at risk Ontario's electricity security because there would be difficulties later in securing supplies and highly skilled workers in competition with the 39 planned nuclear projects in the United States.

Caledonia: Critics say that native protesters are operating outside Canadian law, but it will be tricky to reverse this without bloodshed, particularly if Ottawa continues to drag its feet on land claims.

mcampbell@globeandmail.com

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54 seats for majority
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26
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NDP
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