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March 25, 2010 - What a difference a world financial crisis makes!

Not many years ago, any Ontario Finance Minister proposing a deficit of $21.3 billion would have been the target of sweeping scorn and attacks from media, financial experts, bond rating agencies, and, of course, the political opposition. Today, Dwight Duncan's deficit forecast was received with almost a breath of relief.

The news that the deficit forecast had dropped by 14% from the $24.7 billion predicted in the Fall Economic Statement just five months ago was actually leaked a day early to set the tone for media coverage of today’s Budget.

Strong economic growth in the last quarter of 2009 paved the way for additional revenue growth, aided by fortuitous savings such as hundreds of millions reserved for a flu epidemic that never materialized. The real challenge, though, will be trying to hit the deficit forecast in future years, starting with $19.7 billion in 2010-11. Duncan has laid out an eight-year forecast (he would argue it is a “plan”) to bring the province back to a balanced Budget by 2017-18, including cutting it in half within five years.

The Budget describes a range of cost control measures, such as freezing non-bargained salaries in the Ontario Public Service and broader public sector for two years. There is little real detail about how program costs will be held down, though keeping program spending to the forecast 1.9 percent in the next three years will not be easy.

The forecast calls for total program spending in government to increase from $108.8 billion in 2009-10 to $115.9 billion in 20010-11, then drop to $112.9 billion in 2011-12. The drop is accounted for largely by the end to a host of short-term program costs such as the one-time $4 billion auto industry support booked in 2009-10 and HST transitional assistance, infrastructure-related program support, pension adjustments and other expenses added in 2010-11.

The essence of the recovery strategy is not cost cutting but reliance on increased tax revenues from a return to growth. After a 0.5 percent decline in GDP in 2008 and a whopping 3.4 percent plunge in 2009, the economy clearly turned around at the end of the year. Ontario is banking on it staying that way, with growth forecasts of 2.7 to 3.2 percent for the next four years. There is little new in the Budget, since the government had done a thorough job in leaking the details on post-secondary expansion, northern development, and international marketing of water technology in speeches over the past month. The only major new program was a three-year, $150 million electricity cost reduction for northern industry to assist the hard-hit forestry and mining sectors.

Infrastructure Support

  • Notes infrastructure spending at record levels in 2009-10 and will increase further next year.
  • Infrastructure spending created or preserved 300,000 jobs over two years.
  • Total provincial infrastructure spending for both stimulus projects and traditional infrastructure is $11.07 billion in 2009-10 and $13.2 billion in 2010-11.
  • Budget highlights the findings of the March 2010 Conference Board study giving a huge boost in jobs and economic growth in Ontario in 2009 and 2010.
  • Reiterates 5,400 stimulus projects approved and on track for completion by March 31, 2011.
  • States that “The Government will undertake a comprehensive review of capital by the end of 2010. Following this review, the government is committed to introducing a 10-year infrastructure plan in 2011.” In other words, just in time for the election campaign!
  • Highlights major infrastructure associated with the 2015 Pan Am games, including completion of the Georgetown GO expansion to facilitate the Pearson-Union link.

Transit

  • Hidden in the budget but revealed in questioning by media: the government is asking Metrolinx to save $4 billion over five years by delaying some of the $9.3 billion worth of Transit City projects previously announced for Toronto.
  • Projects likely to proceed include those associated with the 2015 Pan Am games, including completion of the Georgetown GO expansion to facilitate the Pearson-Union link, as well as the Sheppard light rail transit line and the York University line.
  • Delays will likely affect five planned projects:rapid transit lines for Finch Ave. W., Sheppard Ave. E. and the Scarborough RT, along with the Eglinton Ave. cross-town line and an expansion of York Region’s Viva service.

Housing

  • No specific measures directed to the housing sector.
  • Starts forecast to rise from 50,400 in 2009 to 58,000 in 2010, 50,000 in 2011 and 70,000 in 2012 (compared to 75,100 in 2008.)

Green Energy

  • No new announcements.
  • Budget points to the success of the Green Energy Act and again anticipates 50,000 green jobs to result from it.
  • Emphasises the success of the FIT process but also remains fully committed to the Samsung deal and the promised 16,000 green energy jobs.

Full Day Learning

  • Replaces $63.5 million in annual child care funding “cut” by the federal government on expiry of the program, assisting 8,500 children.
  • Moving forward with full day learning for 4- and 5-year olds starting this September, with goal of full implementation by 2015-16.

Post Secondary Education

  • The Budget commits the government to the goal of increasing the number of Ontarians with post-secondary education or training from 62 per cent today to 70 per cent. As a first step the budget provides $310 million in new funding to create 20,000 new spaces in colleges and universities this year.
  • The government pledges that “every qualified Ontarian who wants to go to college or university will find a place”.
  • Will create a new Ontario Online Institute.
  • The government sets a goal of increasing the number of international students by 50 per cent.

Health

  • Health spending increases to $46.1 billion, representing 46 per cent of overall program spending.
  • Hospital transfers increase 1.5 percent.
  • The government made clear the main target of their Drug System Review stating “Ontarians pay too much for generic drugs.” Legislation to be introduced to cut generic prices and make other drug price changes.
  • At the same time government pledges to “increase support for pharmacies in rural and underserviced areas and support the expansion of clinical services provided by pharmacies.”
  • Will introduce legislation making health care professionals and executives more accountable for improving patient care and undertake a review of the Public Hospitals Act.
  • On dental care, trumpets the earlier expansion of the Children in Need of Treatment program to cover to age 17, but no costing details or new commitments.

Public Sector Compensation

  • Among the most contentious items included in the Budget is the decision to legislate a freeze for two years on the compensation structures of non-bargaining employees in the Broader Public Sector and the Ontario Public Service, including all political and legislative staff who fall in this category.
  • While the government will respect all collective agreements – it will provide no funding to partners to cover increases in compensation negotiated in future collective agreements.
  • The government says these moves will redirect $750 million in our schools, hospitals and other public services by 2011/1012.

For more information, contact:
Counsel Public Affairs
416-920-0716

January 18, 2010 - McGuinty's New Look Cabinet

As expected, Premier Dalton McGuinty has shuffled his Cabinet to plug the holes caused by the departures of George Smitherman and Jim Watson, move out a number of veterans and showcase new talent in the 18 month lead up to the October 2011 election. Coming off a challenging year and facing huge fiscal limitations, the shuffle, provides an opportunity for the Premier to inject new energy into the Cabinet and recast the public face of the government.

Three women from the backbenches, representing different areas of the province, have been promoted to Cabinet: Sophia Aggelonitis (Hamilton) as Minister of Consumer Services, Linda Jeffrey (Brampton) to Minister of Natural Resources and Carol Mitchell (Huron-Bruce) as Minister of Agriculture, Food and Rural Affairs. Not surprisingly, the successful star candidate who succeeded Michael Bryant in Toronto’s St. Paul’s riding, Dr. Eric Hoskins, has also been given an “Honourable” before his name as the man in charge at Citizenship and Immigration.

In one of the most dramatic moves, the Premier has given a huge promotion to Scarborough’s Brad Duguid, moving him from Aboriginal Affairs to Energy and Infrastructure, the super-ministry specially created for Smitherman.

Many groups in the construction sector had pushed to separate the two parts of the Ministry, arguing that the scope of major decision on the energy file meant infrastructure was getting short shrift. Those disappointed that the marriage of the two sectors was maintained may be somewhat mollified by Duguid's appointment. In a prior role as Minister of Labour, Duguid dealt extensively and fairly with the construction and infrastructure communities.

Nevertheless, he will have a daunting task on his hands, given some of the major decisions pending in the super-Ministry: marketing the Green Energy Act, including attracting new renewable investment, dealing with NIMBYism over wind farms, and selling the public on rising energy costs for green electricity; dealing with local concerns around new gas-fired plants in Northern York Region and Oakville; determining the fate of Ontario’s next-generation nuclear procurement; establishing a framework for long-term infrastructure planning; moving forward on Smitherman’s commitment to introduce new legislation to ensure long-term self funding for water and waste water infrastructure; rolling out the $2.3 billion transmission line expansion; completing the massive federal-provincial stimulus spending; and much more.

Perhaps the most surprising change was the shift of power house Kathleen Wynne from Education to Transportation. This may reflect a feeling that Wynne had become too close to the education stakeholders, though it is being sold as a chance for her to steer the expansion of transit initiatives important to Toronto as well as some time freed for her to co-chair the election campaign.

Long-time Agriculture Minister Leona Dombrowsky will take over the Education portfolio.

Three current ministers have been dropped from Cabinet, several of whom had been expected to retire at the next election: Aileen Carroll, Ted McMeekin and Donna Cansfield.

As is always the danger in these situations, a number of strong backbenchers who did not receive promotions may now rethink their intentions for 2011.

Despite the changes, the major players remain in their places: Premier McGuinty himself, of course, along with Finance Minister Dwight Duncan, Health Minister Deb Matthews and Economic Development and Trade Minister Sandra Pupatello.

Some commentators had speculated last week about Greg Sorbara returning to Cabinet as Minister without Portfolio and Deputy Premier. While McGuinty would have welcomed his voice in Cabinet again, Sorbara is serving a more valuable role as Chair of the 2011 election campaign. To give him a Minister without Portfolio role, complete with car, driver and Ministerial salary, while he devoted his time to the Party’s election effort, would have been politically untenable.

There may be some additional Cabinet material to consider before long. High profile candidates are running to replace Smitherman in Toronto Centre – former Winnipeg Mayor Glen Murray is the candidate for the February 4th by-election – and Watson in Ottawa-Nepean – former Ottawa Mayor, Regional Chair and MPP Bob Chiarelli is seeking the nomination for the yet-to-be-called race – and they may be possibilities for some of the doubled up portfolios, or replacements for any rookies who falter.

Here is a side-by-side comparison of the old and new Cabinets, with changes highlighted:

Portfolio
Old Minister
New Minister
Premier Dalton McGuinty Dalton McGuinty
Aboriginal Affairs Brad Duguid Chris Bentley
Agriculture, Food and Rural Affairs Leona Dombrowksy Carol Mitchell
Attorney General  Chris Bentley Chris Bentley
Cabinet (Chair of) Gerry Phillips Gerry Phillips
Children and Youth Services Laurel Broten Laurel Broten
Citizenship and Immigration Michael Chan Eric Hoskins
Community and Social Services Madeleine Meilleur Madeleine Meilleur
Community Safety & Correctional Services  Rick Bartulucci Rick Bartulucci
Consumer Services Ted McMeekin Sophia Aggelonitis
Culture Aileen Carroll Michael Chan***
Economic Development and Trade Sandra Pupatello Sandra Pupatello
Education Kathleen Wynne Leona Dombrowksy
Energy and Infrastructure Gerry Phillips* Brad Duguid
Environment John Gerretsen John Gerretsen
Finance Dwight Duncan Dwight Duncan
Francophone Affairs (Responsible for) Madeleine Meilleur Madeleine Meilleur
Government House Leader Monique Smith Monique Smith
Government Services  Harinder Takhar Harinder Takhar
Health and Long-Term Care  Deb Matthews Deb Matthews
Health Promotion  Margarett Best Margarett Best
Intergovernmental Affair Dalton McGuinty Monique Smith
Labour Peter Fonseca Peter Fonseca
Management Board of Cabinet (Chair of) Dwight Duncan Dwight Duncan
Municipal Affairs and Housing John Gerretsen** Jim Bradley
Natural Resources Donna Cansfield Linda Jeffrey
Northern Development, Mines & Forestry Michael Gravelle Michael Gravelle
Research and Innovation John Milloy John Milloy
Revenue John Wilkinson John Wilkinson
Seniors (Responsible for) Aileen Carroll Gerry Phillips
Tourism Monique Smith Michael Chan***
Training, Colleges and Universities  John Milloy John Milloy
Transportation Jim Bradley Kathleen Wynne
Women’s Issues (Responsible for) Laurel Broten Laurel Broten

(For the sake of space, we have omitted the title “Honourable” from each name in the chart)

* Interim Minister since George Smitherman’s resignation in November 9th

**Interim Minister following Jim Watson’s resignation on January 12th

***Chan is Minister of a new combined Tourism and Culture Ministry.

Full biographies for each Minister as well as the Premier’s press release can be found at: http://www.premier.gov.on.ca/news/index.php?Lang=EN

 

 

December 17, 2009

First, we are thrilled that Mary Ellen Richardson has joined the firm as an Associate. Mary Ellen has worked with the Ontario Power Authority in various senior capacities including VP, Corporate Affairs, VP, Conservation Programs and External Relations & Executive Adviser to the CEO and Executive Team. Ms. Richardson was also the President of the Association of Major Power Consumers in Ontario (AMPCO) and previously held roles at Ontario Hydro, Enbridge, TransCanada PipeLines and Petro Canada.

Second, Counsel Public Relations, originally a separately incorporated joint venture, has now been fully merged with Counsel PA. Counsel's integrated PA/PR capacity is reflected in our new logo. Dorenda McNeil, formerly President of Counsel PR, becomes our seventh Principal, and will be responsible for guiding the public relations side of our business. More than ever, Counsel is a full-service public affairs shop with the capacity to help you with everything from a product launch to a province-wide political advocacy campaign.

And third, we have launched our new website to tell everyone about the COUNSEL team and our valuable resources to our clients and friends. Visit us regularly to access a full calendar of upcoming events, and get information on our soon-to-be-launched Counsel Debates series. While these developments are exciting for all of us, the really important news is the value they bring to you as clients or prospective clients. Whatever your public affairs needs, we can help — effectively, efficiently and professionally. Happy Holidays — to you and your family!