As I sit down to write this note, the TSX index is down more than 400 points and that follows a 250 point drop yesterday. Finance Minister Jim Flaherty, went before the cameras this morning to say "uncertainty is the enemy." Yesterday Prime Minister Stephen Harper told Bloomberg News "admittedly we are looking at a period of very low growth." The Canadian dollar is down.
The much talked about double-dip recession very well could become a reality before Christmas. The economy is slowing and that means all those financial projections of growth, however small, made by governments just might not come true.
One question Ontarians might want to ask is: what will each party commit to doing if there is another recession? Remember the promises in all the platforms are based on those dated financial projections.
The quote of the day, and this is before today's market slide, is from David Dodge the former Bank of Canada governor. He told the National Post's John Ivison, that none of the leaders in the Ontario election is "facing up to the situation." He went further about the campaign so far, "if you haven't been candid and then come along in the 2012/13 budget and rape and pillage, then the public will get really angry and you will have real social unrest." Tough words.
Ontario was a big loser in the 2008 recession. A lot of jobs disappeared. Ontario suddenly became a have-not province -- something that was unthinkable only a few years ago. I'm not about to predict the consequences of another recession on Ontario but I do know that it will hard for the Ontario government to spend its way out again. The surplus has been wiped out and replaced by growing deficits.
There isn't much voter interest in the election but maybe, just maybe, the economic news will focus everyone's attention. Maybe.
Health care is the single largest item in the Ontario budget, close to half of that budget, and growing. As the current health accord with the federal government runs out, controlling health-care spending will be an issue that all governments in Canada will tackle in the next couple of years. But in this election campaign there is no talk of cutting health care and very, very little talk of managing health care.
A quick glance at today's schedules for the leaders shows the Liberals and NDP are focusing on health care issues. The Progressive Conservatives aren't making health-care announcements today but rushed out a release charging that Dalton McGuinty is "lying to Ontario families" about the Liberals health care record. The Tory platform promises a $6.1 billion increase in health care spending over the next four years. Yes, you read that right. Where will the money come from if the provincial growth projections are wrong?
McGuinty did talk about his vision for the Ontario economy in a speech to the Canadian Club of Toronto. We've heard it all before. "The Ontario Liberal plan to become the number one clean-energy manufacturer in North America means tens of thousands of good, new jobs for Ontario families."
McGuinty's plan depends on consumers in Ontario, Canada and around the world being able to afford these technologies producing energy at a much higher cost than traditional resources. A recession is not the best time to be selling more expensive products that produce unreliable power. Nor is it savvy to compete against what appears to be even more highly subsidized Chinese manufacturers. The recent bankruptcy of U.S. solar manufacturer giant Solyndra highlights the risks McGuinty would have us take.
The Progressive Conservative Party continues to insist that its fiscal plan is sound. That Liberal tax increases can be rolled back and that taxes can even be cut. The Tory mantra is eerily familiar to what Rob Ford promised a year ago. The PCs continue to tell voters there is enough waste in government to reduce taxes and fund all the programs in the Tory platform.
The NDP has a pretty hefty list of promises but at least it is up front about a tax increase.
The party's platform will restore Ontario's general corporate income tax rate from 11.5% to 14%.
Here's a thought. Ask each party to review their lofty platforms assuming lower, but more realistic, growth estimates. That would make this campaign interesting.
Tonight on LeDrew Live we'll be talking about the Ontario election and the economic pressures on four GTA cities. The mayors of Mississauga, Brampton, Vaughan and Pickering will all be here to discuss the tough choices they will face in the coming months and, perhaps, years. After all the promises are made, and the votes are counted, what will be the reality for the GTA?
It all gets under way at 9 p.m. with Stephen LeDrew. You can send us your questions on twitter #cp24elxn or join our live chat at CP24.com/live.
