When Ontario’s Progressive Conservative government takes office in a few weeks, it will do so on a platform that includes dismantling many Liberal business initiatives, scrapping a plan to further raise the minimum wage and eliminating the cap-and-trade system of providing incentives for reducing greenhouse gases.
Premier-designate Doug Ford, who campaigned on a pro-business platform, now faces a business community eager to exactly learn how that future may unfold.
While he promised a fully costed platform by the end of the election campaign, Mr. Ford did not deliver one before the polls opened Thursday. So while his promise to “cut red tape” for businesses and “the little guy” is fuelling some optimism, leaders in many sectors are waiting for concrete details of how the new government will achieve its goals, such as reducing costs for businesses while servicing Ontario’s ballooning debt.
“In the absence of good planning, potentially, Ford is going to start cutting everything just because it looks like it might have some Liberal smell on it, and there might not be a great plan to replace that,” said Sean Stephens, chief executive of Treefrog Inc., a Newmarket-based digital marketing and technology firm.
Craig Alexander, the Conference Board of Canada’s outgoing chief economist, warned Thursday that immediate reactions from financial markets will be less meaningful than how markets react once the new government unveils more detailed budget plans. Ontario’s economic growth is expected to slow, and he said the incoming government will have to address how technological changes are affecting the province’s labour market and competitiveness.
“The next government will need to focus policies on areas that will boost productivity, increase competitiveness and help support the future of jobs. This is easy to say but hard to do,” Mr. Alexander said.
The credit-rating agency DBRS currently has an investment-grade rating on Ontario’s debt. Paul LeBane, a vice-president with DBRS, said he expected deficits to remain wide in the coming years, but despite Mr. Ford’s intention to reduce taxes, he could raise them down the line if problems emerge. (The party has promised to lower the corporate tax rate to 10.5 per cent from 11.5 per cent.)
Mr. Ford’s own business acumen was alleged to be lacklustre in a lawsuit filed this month by Renata Ford – the widow of his late brother, former Toronto mayor Rob Ford – and some are questioning gaps in some of his business policies.
While the PCs have made some strong declarations about the province’s energy policy - along with tossing out the cap-and-trade program, Mr. Ford has threatened to fire the chief executive and board of partly privatized utility Hydro One Ltd. - some in the energy sector feel uncertain about their future. “Customers are contacting us and they are concerned with how the cap-and-trade program is going to go on,” said Anthony D’Agostino, director of commodity markets at RBC Capital Markets.
Mr. Ford has also promised to bring forward a “minimum-wage tax credit” to offset income taxes for those in that bracket, while putting the brakes on the Liberals’ plan to raise the minimum wage to $15 next year.
“That will disadvantage in excess of 1.5 million workers in the province who are looking forward to earning $15 an hour as of Jan. 1,” said Chris Buckley, president of the Ontario Federation of Labour. The OFL, which supported the New Democrats during the election, is fearful that the PC government may roll back many of the gains it fought for. “The labour movement will hold Doug Ford’s feet to the fire.”
Leaders in the marijuana and technology sectors - two areas that have the potential to become major contributors to Ontario’s economy - are showing mild, if cautious, optimism as they wait for details about the Ford-governed future.
The Ford premiership has the potential to herald a less-regulated marijuana retail environment, which in turn could let producers sell directly from their own production sites.
The Council of Canadian Innovators, a vocal Ontario-based trade group representing the tech industry, noted in a policy-summary document last month that the PC platform offered little in terms of innovation strategy or support for domestic tech companies, which regularly compete with global tech giants. But in an e-mail Thursday, executive director Ben Bergen said he was hopeful that the government “will work closely with Ontario’s technology companies and help them access more of the capital, customers and talent they need to scale and grow globally.”
Many business leaders hope for a dialogue – and details – as soon as the government settles in.
“I expect a PC government to reach out very quickly to the business sector,” said James White, senior management of business development at Wellmaster Pipe and Supply Inc. in Tillsonburg, Ont., and an active member of the Canadian Manufacturers & Exporters industry association.