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Heat over hydro dominates Ontario throne speech

September 12, 2016

2-minute read

Today’s throne speech was cast as an opportunity for the Ontario government to press the reset button.

Instead it pretty much stays the course, while attempting to neutralize public anger and opposition heat over hydro costs by relying on good old-fashioned pocketbook politics.

It confirms the province will achieve its zero deficit goal in the next fiscal year, and it re-affirms its focus on infrastructure investments and pension reform.

It enhances access to child care with the announcement of 100,000 new spaces. In doing so, it is acting on the recommendations of the gender pay equity task force.

But the big news in this throne speech is hydro: Taking a page from the NDP policy book, the government is promising a rebate that is equivalent to removing the HST from hydro bills for residential consumers and small businesses. It will provide further relief for rural electricity users and it will expand eligibility for the conservation program for large electricity users.

The government is betting that this is a measure will reduce the political heat. But, Ontarians’ outrage at hydro price increases is a symptom of deeper problems: if incomes were increasing, and employment opportunities plentiful, hydro price increases would be much less of an issue.

Ontario continues to be in a slow growth environment with a labour market that is underperforming for a lot of people. Despite the slight drop in the unemployment rate, the employment rate remains exactly the same today, at 61.4 per cent, as when the government took office two years ago.

There is good news in the throne speech for people who need supports for skills training, however, the throne speech was silent about a major initiative that could have an impact on incomes and affordability: the speech did not mention the Changing Workplace review that is considering changes to the Employment Standards Act and the Labour Relations Act, with a focus on improving conditions for precarious work.

The review provides the government with an opportunity to make a positive impact on Ontarians’ paycheques by enacting legislation that will reduce wage theft and making it easier to join a union. The government could also raise the minimum wage to $15 an hour, instead of increasing it by just 15 cents this October.

All of these initiatives would make it much easier to pay those hydro bills without costing the provincial coffers a dime — as opposed to the hydro subsidy, which will have a billion dollar price tag.

Increasing incomes for people who rely on social assistance would make hydro bills more affordable for those who are least able to absorb price increases.

The throne speech underplayed the reality that Ontario has been locked into a slow growth environment, which means that there are no quick fixes to the governments’ revenue problems. Instead of addressing the need to raise revenue in the speech, the government focused instead on a “low tax” narrative that has dominated provincial politics for two decades.

The throne speech affirmed that the government is well on the path to reaching its zero deficit target in fiscal 2017, which relied on squeezing operating spending. As a result, spending on public services has grown more slowly than inflation and population growth and the throne speech made no indication that those days are well and truly behind us.

Everyone is feeling the squeeze on government service that has resulted. However, it is those with lower incomes who are most affected by the loss of services and the impact on their expenses.

There is also a more direct impact of these austerity measures. Since the 2014 election, employment has grown by only 1.7 per cent — there have been 84,000 private sector jobs created and a loss of 31,400 public sector jobs. These public sector jobs deliver services, but they also provide decent work and incomes in communities across the province.

Trish Hennessy has outlined what we at CCPA-Ontario were looking for in this throne speech: an expansion of public services and needed new revenue to pay for them, progress on a progressive legislative agenda, and measures to maximize value for money in public spending.

Unfortunately, the throne speech fell short.

Sheila Block is a senior economist with the CCPA-Ontario. Follow her on Twitter  @SheilaBlockTO.

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