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Ontario has entered tempestuous waters. The province is confronted with a rapidly slowing economy, serious fiscal challenges – declining revenues, an even larger deficit – and the need for early, deep spending cuts and control of voracious public sector unions to maintain the province's capacity to respond to broader economic challenges.
Voters on Thursday have a basic choice, between an experienced Liberal government under Premier Dalton McGuinty that believes modest efforts can see the province through the storm, and a Progressive Conservative Party, led by Tim Hudak – a leader with basically sound political and economic principles whose campaign was surprisingly lacklustre, and who will move too aggressively and is too dogmatic about smaller government when some public investment is needed.
There is no third option. The New Democrats, under leader Andrea Horwath, are dangerously flawed, and if given an opportunity to influence policy, either in government or in a minority parliament, would wreak havoc on Ontario's economy. (More on that tomorrow.)
Throughout the campaign, Mr. Hudak has launched withering attacks on the record of Mr. McGuinty, portraying Ontario Liberals as wantonly irresponsible tax-and-spenders who have mismanaged the economy.
In fact, Mr. McGuinty has managed through the past recession rather well.
His government has been interventionist when it needed to be, as when Stephen Harper and Barack Obama came calling on behalf of the auto sector. But it has also been prudent. Even during the election, the Liberals resisted throwing money at voters. The Tories, in fact, have made more costly promises.
The Tory strategy has been to focus on the Liberals' perceived shortcomings. The problem with this strategy is that Mr. McGuinty has, by and large, a defensible record.
He took on the pharmacists, in the process saving the province millions on the cost of drugs. Mr. Hudak was on the wrong side of that argument. Mr. McGuinty joined with the federal Conservatives to introduce the HST, a measure that has enhanced the competitiveness of Ontario businesses. Mr. Hudak was on the wrong side of that argument too.
Mr. McGuinty sees himself as the education premier, with some justification. He has made good, incremental changes to education, improving standards, with results that will enhance competitiveness and productivity for Ontario.
Mr. McGuinty cannot explain why green energy – in the absence of desire (consumer demand) or compulsion (an effective global regulatory regime that reduces carbon emissions) – is the economy of the future. He also needs to sharpen the economic criteria behind his energy plan. But the Liberals have at least restored some stability to the electricity system, and are working to ensure its long-term sustainability.
The Liberal record is imperfect, from the eHealth fiasco and the bloated size of the cabinet to the proliferation of provincial agencies and the cancellation of power plants. Liberals also like to thump their chests for presiding over eight years of labour peace. It isn't difficult to buy labour peace with too-generous raises, however.
But what has Mr. Hudak offered, other than criticism? Not much.
Ontario needs a government ready to build budgets on the basis of very modest growth, perhaps of one percent. Yet Mr. Hudak has pledged not to touch education and health care budgets, which represent the majority of provincial spending. He vigorously opposed the HST, against the interests of Ontario business, yet now says a Tory government will keep it, albeit removing the provincial portion off hydro and home heating bills – a costly commitment the province can ill afford.
The state of public finances should have been the theme of his campaign. Instead, his attention has often been focused on wedge issues, such as chain gangs, over any plan for the economy.
There is every reason to believe Mr. Hudak has the managerial qualities, and the depth of talent among those around him, to competently administer Ontario. The job may be his next time if the Liberals cannot bring health spending, public finances and wage increases into line.
Federal Finance Minister Jim Flaherty's inappropriate intervention on behalf of Mr. Hudak on Friday also did him no favours. In Canada, provincial power serves as a check on the power of the federal government. With upcoming negotiations with Ottawa over the renewal of federal-provincial transfers for health and social spending, Mr. Flaherty's statements leave the unfortunate impression that Mr. Hudak is not an independent actor, as the premier of Canada's largest province must be.
Mr. McGuinty has done well enough in the past, but now needs to apply the same leadership he has shown in education, health and energy policy to getting Ontario's fiscal house in order.
Mr. McGuinty is a moderate, and has shown an ability to move from left to right, depending on the issue. A right-minded balance is needed. It is time for a fiscally conservative McGuinty government, one that understands that it is Ontario's deficit that is a threat to Ontario's prosperity, and yet one that can prudently trim the sails without bringing the province to a halt.