What Doug Ford’s new cabinet faces: inflation, housing crisis, union talks

Ontario Prime Minister Doug Ford will unveil his new cabinet on Friday morning in what is expected to be glorious sunshine outside Queen’s Park.

But then tumultuous economic and political looms for the second term Ford administration.

Ontario is facing its highest inflation rate in nearly 40 years, an economic reality that will profoundly affect everything from the amount of tax revenue the government brings in to the amount of pressure public sector unions exert for higher wage increases.

The new cabinet also faces a housing crisis that has spread to all corners of the province, an overstretched health care system weakened by the more than two-year-long handling of the COVID-19 pandemic, and a long list of promises to be made. are fulfilled.

Ford and his newly appointed ministers are expected to be sworn in at 11:15 a.m. in an open-air ceremony before the legislature.

As previously reported by CBC News, observers expect the new cabinet to be larger and more diverse than Ford’s in 2018.

The Ford administration’s first cabinet, pictured with Lieutenant Governor Elizabeth Dowdeswell, center front row, in June 2018. (Mark Blinch/The Canadian Press)

Here’s a look at the five biggest problems facing Ford and its ministers:

1. Inflation

The rapid rise in the cost of living is a far-reaching economic problem that no provincial government can solve, yet it is one that will have a profound effect on much of what the Ontario government does.

Progressive Conservatives’ moves to make life more affordable so far have focused on making driving more affordable: scrapping the $120 registration fee in Ontario, ending tolls on state highways, and promising to gasoline tax by 5.7 cents per liter for six months. , with effect from 1 July.

Inflation will help the government coffers in many ways: When consumer goods cost more, sales tax revenues rise. Inflation does not appear to be hurting corporate profits so far, so the province can also expect corporate tax revenues to rise accordingly.

Of course, inflation also makes it more expensive for the government to buy and build things, so expect the price tags for the big government construction projects to fly above their budget.

The cost of living in Canada rose in the year to May at the fastest pace in nearly 40 years, Statistics Canada reported this week. Annual inflation is 7.7 percent. (Robert Krbavac/CBC)

But the government’s biggest inflationary concern will be what it does with public sector wages. Salaries represent about half of the county’s annual operating budget.

2. Consultation on public sector contracts

Whether it’s teachers, nurses, hydroelectric workers, police officers, road maintenance crews or Service Ontario employees, they all see inflation swallowing their net wages. That will no doubt lead to public sector unions asking for higher wages when their next round of negotiations begins, arguing that any annual wage increase less than inflation amounts to a wage cut.

An annual inflation rate of 7.7 percent sets a dramatically higher bar for wage increases than the public sector has seen for decades.

Add to that the fact that the Ford administration capped annual public sector wage increases through Bill 124 by 1 percent at a time when private sector wage increases were higher, and you have significant pent-up demand for wage catch-ups.

All this forms the basis for some difficult negotiations, starting with teaching staff. Remember, Ontario saw schools close across the province due to teachers’ strikes just weeks before schools closed due to COVID-19.

Ontario public sector workers whose salaries are paid through provincial funding have been subject to a one percent cap on annual wage increases since the Ford government introduced Bill 124. (Esteban Cuevas/CBC)

One of the stumbling blocks in those talks in 2020: the government offered teachers a one percent pay rise, and the unions wanted increases at the rate of inflation. Inflation was then around 2%.

It will be particularly interesting to see how contract talks with health professionals are handled, given all the praise Ford has bestowed on them during the pandemic. They will understandably want the government to put its money where it needs to be.

3. Health System

Ford’s new health secretary will step into Christine Elliott’s shoes after her decision to leave politics.

Elliott’s successor will take responsibility for a $68 billion system struggling to cope with staff shortages, record emergency room wait times and a massive surgical backlog, even though there is currently a lull on COVID-19 cases in hospitals of the province.

The health minister will most immediately need to address the healthcare workforce crisis and ensure the system is prepared for any new strain of COVID-19 that may emerge in the fall. The new minister will also want to move forward with the health system reforms the government initiated before the pandemic, aimed at addressing the root causes of the drug problem in the hallway.

Sources close to the government have previously told CBC News that former Solicitor General Sylvia Jones is the frontrunner to become health minister, with Prabmeet Sarkaria, the former head of the Treasury Board, also under consideration.

Sylvia Jones served in the cabinet as Solicitor General to the Ford administration during the COVID-19 pandemic and was the minister responsible for overseeing the vaccine rollout in Ontario. She is a possible successor to Christine Elliott as Secretary of Health. (Cole Burston/The Canadian Press)

The latest iteration of Ford’s cabinet included an associate minister who focused on mental health. See if that post stays in place as a signal that the issue remains a government priority.

4. Affordability of housing

The rising cost of buying a home has fallen slightly in recent months as the Bank of Canada raised interest rates in a bid to curb inflation.

Still, the average sales price of a home in Ontario in May was 8.7 percent higher than in May 2021, according to the Canadian Real Estate Association.

The government pledges to pave the way for the construction of 1.5 million new homes in Ontario over the next decade, a target set by the province’s housing affordability task force. But the government didn’t really follow through on many of the task force’s other recommendations, such as its call for more density in single-family neighborhoods.

A task force on housing affordability, appointed by the Ford administration, advised county councils to increase density in neighborhoods currently designated for single-family homes. (Ed. Middleton/CBC)

The housing action plan the Ford government unveiled this spring focuses largely on speeding up municipal approvals for development projects, with industry observers questioning whether that will go far enough to boost housing supply to levels that are beginning to fall. curb prices.

Housing is a candidate for having its own deputy minister in Friday’s new cabinet, a move that would recognize the importance of the issue and offer an extra hand to the minister of municipal affairs and housing.

5. Keeping promises

Ford won re-election under the simple slogan “Get It Done” and being a party mantra that says “Yes”. The long list of things Ford has said ‘yes’ to provides a handy scorecard for holding back the government in months and years to come.

A few of the promises to keep an eye on:

Leave a Comment