By Anna Mehler Paperny
TORONTO (Reuters) – Ontario premier Doug Ford will have a long list of promises to fulfill after voters handed his Progressive Conservatives a second term in Canada’s most populous province, even as he cuts taxes and fees, bringing in less revenue.
Ford’s right-leaning party was projected to sweep back to power with a bigger majority, winning at least 83 seats in the 124 seat legislature, easily defeating his opponents in an election his party led strongly in the polls.
With Canadian inflation running at a three-decade high of 6.8%, Ontario faces an affordability crisis affecting everything from housing to groceries with few tools within the province’s jurisdiction to address it, observers said.
Ford promised billions of dollars of new spending leading up to the election, on everything from highways to hospitals despite cuts to government revenue through measures such as a vehicle registration fee rebate and a gas and fuel tax reduction.
With a debt-to-GDP ratio of 40.7%, Ontario’s debt load is higher than the next three most populous provinces and it pays more to borrow in the bond market. Investors have said getting the fiscal house in order should be one of the Ford government’s priorities.
If the province faces a short-term fiscal crunch and doesn’t want to raise taxes, “they may need to make their goals a little more moderate,” said Carleton University economist Vivek Dehijia.
Ontario, home to just under 40% of Canada’s 38.2 million people, is Canada’s manufacturing heartland. It is also one of the world’s largest sub-sovereign borrowers, with publicly held debt standing at C$418.7 billion ($331.3 billion).
In some ways the election campaign was more about what was missing than what was there: namely any bold plans to address housing affordability and economic development, said Ivey School of Business economist Mike Moffatt, who called the campaign a “nothingburger.”
Housing affordability felt like a major issue but no party really differentiated itself, he said.
And while everyone said they wanted to boost new home construction, there was little discussion of the workforce needed to do this, added.
“The labour force in that sector is getting quite old.”
Ford’s party stays in power as the pandemic continues with few public health measures in place and without addressing structural challenges in delivering health care and addressing penurious disability payments even as Long COVID is adding to the burden of disability, Moffatt said.
“We’re going to have more people who will have disabilities, who will not be able to work or will not be able to work full-time. This is highly problematic.”
(Reporting by Anna Mehler Paperny; Editing by Denny Thomas and Richard Pullin)
