Doug Ford’s resounding election win to become the next premier of Ontario after campaigning on tax cuts, less regulation and smaller government makes him sound favourable to the business community on face value.
But he’s also taking the helm at a challenging time for the province’s economy when growth is falling from the robust pace of recent years and debt levels remain high.
Added to that, experts say there’s considerable “uncertainty” as to how his government’s spending plan on promises like increasing the supply of affordable housing will be financed.
With a majority government in power, will Ford be able to deliver on his promises to the business world? Or, do greater challenges lie ahead?
CBC has gathered reaction from analysts, economists and business leaders to get their take on what a Ford win means for the sector and what he should do next.
Dan Kelly, CEO, Canadian Federation of Independent Business (CFIB) on Ford’s pledge to small businesses
Read Ontario Premier-Designate @fordnation's commitments to small business: 8.7% cut in small biz rate, 12% cut in hydro rates, end to corp welfare, no carbon tax, red tape/permit reform. This is a good start. https://t.co/vomTQYHCEb
— Dan Kelly (@CFIB) June 8, 2018
I hope one of the takeaways from the 2018 election is that governments that cave into every demand from union bosses does not ensure their help at the polls.
— Dan Kelly (@CFIB) June 8, 2018
Michael Yake, senior analyst, Moody’s Investors Service on Ontario’s debt problem
“Ontario’s new government faces a number of ongoing credit pressures given the expectation of slower revenue growth stemming from an economy facing headwinds. The challenges include those from the ongoing NAFTA renegotiations, and reduced fiscal flexibility due to high household debt. Furthermore, the province’s debt level will remain elevated and interest expense is expected to increase. We will look for a clear fiscal plan of the new government as presented either through a formal budget or clear policy outlines over the coming weeks.”
Rishi Sondhi, economist, TD Economics on what Ford should do first after becoming premier
“One of the first orders of business by the Ford government will likely be an audit of Ontario’s books. We urge the government to move promptly on this plan. If history is any guide, this process could reveal a significantly higher deficit (and debt) than previously reported, increasing the fiscal challenges faced by the new government while also potentially providing ammunition to justify future spending cuts. The government should also focus on delivering a budget as soon as possible. The plan should outline a path towards easing Ontario’s debt burden while setting a vision for where the government wants to take the province.”
Derek Holt, head of capital markets economics, Scotiabank on what’s missing from Ford’s campaign
“The lack of a detailed and funded platform makes it unclear which of the promises may be implemented and when and what else might accompany them. The Tories promised a small $2¼ billion ‘middle class’ tax cut, a reduction of the provincial CIT rate by one point to 10.5 per cent, a lower small business tax rate, a 10 cent per litre cut to gas taxes, a 12 per cent cut to power rates for households, farmers and small businesses, streamlined regulations, cancellation of another minimum wage hike next January and zero income tax for minimum wage earners. A loose promise to balance the budget on a ‘responsible time frame’ maintains considerable uncertainty over the broader funding and debt issuance framework likely until a Fall budget. ”
Royce Mendes, Katherine Jugde, economists at CIBC Economics what remains unknown
“While the PC election platform offered a broad glimpse into what the new government will likely prioritize in the coming years, details on the implementation, cost, and funding of several campaign promises remain unknown. There’s no statutory timeline for the new government to table a budget or fiscal update, but there were some tangible promises made during the campaign.’
Rocco Rossi, CEO, Ontario Chamber of Commerce (OCC) on bold action need by the new government
“With the business community facing economic uncertainty and the increasing regulatory and tax burden, bold action and leadership will be required in support of pro-growth policies… We look forward to working with the PC Government to help strengthen businesses competitiveness, foster job creation, build healthy communities, and improve government accountability.”
Robert Kavcic, senior economist, BMO Capital Markets on the bond market’s reaction to Ford’s win
“The bond market has already been charging more to lend to Ontario than Quebec, and the election campaign certainly hasn’t helped. Starting with the turn back into deficit in the 2018 budget (Liberals), spreads widened further versus Quebec, a province which continues to run modest surpluses. The initial sense is likely that the PC victory is the ‘least bad’ credit outcome, but we again must wait for details on what a ‘reasonable timeframe’ to balance the budget means.”