Scott Stinson: McGuinty’s health cuts give Ontario PCs a chance to gloat
Scott Stinson, National Post, Postmedia Network Inc.

One can forgive Ontario’s Progressive Conservatives a moment’s gloating.

As the province’s doctors reacted with shock and indignity on Tuesday to the Liberal move to unilaterally slash fees for a host of procedures, and as Premier Dalton McGuinty steeled himself against the blowback that is coming from his long-time allies in the health and education sectors, it is the PCs who are saying, not unfairly: We told you so.

“Six months ago, we were the realists saying, ‘You’re going to have to deal with the unions,’” PC finance critic Peter Shurman said on Tuesday after Mr. McGuinty addressed a downtown Toronto business audience. “We were the ones calling for a province-wide public-sector wage freeze in November,” Mr. Shurman added. “Now, it seems, [the Premier] is coming ever closer to that.”

Mr. McGuinty is not all the way there yet. The Premier insisted on Tuesday that the fee changes announced Monday by Health Minister Deb Matthews were a key part of a plan to restrain spending growth and eliminate the deficit within five years.

“We got a pretty strong mandate from the people of Ontario,” he said, and went on to say that he believes front-line workers such as teachers know the fiscal trouble facing the province.

“I think that when they talk to each other while out grocery shopping, or going to church, or taking their kids to hockey and soccer games … they understand how were are connected to what is happening in Europe and how we are connected to what is happening in the United States,” Mr. McGuinty said. They know that economic recovery requires sacrifices from everyone, the Premier said.

Asked if he was telling other unions that, like the doctors, they will face imposed changes if they don’t come to an agreement with negotiators, Mr. McGuinty demurred somewhat.

“I’m trying to let all our public-sector partners know that there is no new money in the budget we passed for increased salaries,” he said. Workers may have received generous increases in the past, but those deals were signed at a different time — if not by a different government.

“We have to make sure … our compensation agreements are reflective of the times,” the Premier said.

But there was another message in the fee changes brought down on Monday: that workers who may not like the idea of a two-year wage freeze will like the details of an imposed deal even less. Doctors have begun to outline a host of concerns they have with the changes Ms. Matthews has announced; there seems little appetite at all from the government side in changing them.

“It’s not a question of playing nice with the unions,” Mr. Shurman said yesterday. “[Mr. McGuinty] has done that for eight years.”

The Thornhill MPP also expressed some doubt, though, that the Liberals will follow through with plans to hold the line on union wages contract by contract, and he pointed to PC leader Tim Hudak’s bill that would legislate a wage freeze on the public sector as a quicker way of ensuring it gets done.

Talking to a group of business leaders, Mr. Shurman said, the Premier “wants to be a tough guy.”

“We’ve been saying this for months and months and months.”

Six weeks after the March budget, the Liberals are still saying it, too.

‘Happy marriage’ between Liberals, NDP kaput as McGuinty tries to woo Tories
Maria Babbage, The Canadian Press

TORONTO — The so-called “happy marriage” between the minority Liberals and the New Democrats didn’t even last as long as Kim Kardashian’s ill-fated union to Kris Humphries.

The NDP, that helped the Liberals survive a crucial budget vote just two weeks ago, is being tossed aside for Premier Dalton McGuinty’s latest seduction target: the Progressive Conservatives.

McGuinty reached out to his rivals on Tuesday, saying his cash-strapped government needs their help to impose a wage freeze on broader public sector workers — a move the NDP opposes — if all other options at the bargaining table fail to produce one.

“I’m hopeful it doesn’t come to legislated measures in order for us to deal with wage freezes,” said McGuinty, who is battling a $15-billion deficit.

“But if it does come to that, I’m hoping we can count on (Progressive Conservative Leader Tim) Hudak and his party because I believe we have some common ground there.”

The Tories have long called for an immediate pay freeze for all publicly paid workers, such as nurses and teachers, saying it will save the province $2 billion a year.

On Monday, Hudak announced plans to introduce legislation that would force a wage freeze right away.

So far, the Tories have played hard to get with the Liberals on the budget, announcing they’d vote against it the day it was tabled because it didn’t do enough to stop the province from spiralling further into debt.

McGuinty said that forced him to work with the NDP instead and capitulate to their demand to hike taxes for the wealthy.

But the premier’s the one who turned his back on the Tories when he refused to consider any of their suggestions for the March budget, said PC finance critic Peter Shurman.

If McGuinty is sincere about freezing wages, he should support Hudak’s wage-freeze legislation, Shurman said.

“I think that if they’re serious about wanting to legislate a wage freeze in the broader public sector, then they have to demonstrate so by getting together with us and engaging in reasonable debate,” he said.

“Collaboration is not a one-way thing.”

Jilted NDP Leader Andrea Horwath said she’s not heartbroken that her party’s brief affair with the Liberals appears to be over.

“It’s interesting,” she said. “It’s hard to get a sense of where the premier is at on this issue. It used to be that he very clearly said legislated submissions don’t work and that’s not the way to do things. And now all of a sudden that’s exactly what he’s reaching for.”

The Liberals have warned for years that they cannot afford any more pay increases in order to balance the books in 2017. But they’re now threatening to legislate a wage freeze and back-to-work legislation if that’s what it takes.

But the threat is not actually in the budget bill, which will come up for a vote in the legislature.

McGuinty’s pitch to the Tories came a day after his government cut several hundred fees that are paid to doctors, which it said would save $338 million this year.

The unilateral move was the latest salvo in its battle with the Ontario Medical Association over a new labour agreement. The government is refusing to provide more money to the doctors, who say it’s unfair that they’ll end up absorbing the rising costs of health care in the province.

Dalton McGuinty reaches out to Tim Hudak for support on public sector wage freeze
Rob Ferguson Queen's Park Bureau, Torstar Corp.

Fresh from a tax-the-rich deal with the NDP, Premier Dalton McGuinty is now reaching out to the Progressive Conservatives for support in imposing a public sector wage freeze.

“It may very well be I need their support,” McGuinty said Tuesday. “I am hoping the party on the right will be there for that.”

He also defended the “strong medicine” his cash-strapped minority government is dishing out to doctors as the province fights a $15 billion deficit.

Fee cuts were imposed on doctors during negotiations with the Ontario Medical Association for a new contract, but McGuinty denied the move was intended to intimidate unions for teachers and other public sector workers.

The comments came a day after Conservative Leader Tim Hudak announced plans to introduce a bill calling for an immediate freeze on teachers, nurses, civil servants and other public sector workers to save $2 billion a year.

McGuinty said his own preference is still to “try as hard as we can” to negotiate pay freezes before resorting to legislation.

“Should it come to that, we will not shirk from that responsibility,” added the premier, who has promised to balance the budget by 2017 and avoid further credit downgrades by bond-rating agencies.

Tory finance critic Peter Shurman said the Liberal government should get serious about a freeze by supporting Hudak’s bill.

“It’s not a question of sitting down and playing nicely with the unions, he’s tried that. In fact, he’s been a little bit too nice for all of those years,” the Thornhill MPP told reporters after McGuinty addressed the Ontario Economic Summit.

McGuinty reluctantly agreed to an additional tax bracket on personal incomes over $500,000 to get support from NDP Leader Andrea Horwath for his March 27 budget.

He blamed the Conservatives for not bargaining with him on the budget, which meant “I was forced to negotiate with a party to my left.”

The premier said he’s glad to have “common ground” with Conservatives on the wage freeze, although Shurman wouldn’t commit his party to supporting Liberal wage freeze legislation.

“We cross every bridge when we get to it.”

Horwath accused McGuinty of flip-flopping on previous statements that legislated wage freezes don’t work.

“The desire to hold onto power is what makes people do strange things.”

She wouldn’t say if the NDP would work to defeat the government’s budget and force an election if McGuinty tries to pass wage freeze legislation.

“We take the legislation one piece at a time.”

McGuinty looking for support on a public sector pay freeze
By Jonathan Jenkins ,Queen's Park Bureau, QMI Agency

TORONTO - Premier Dalton McGuinty is on the prowl for a new political partner to help him keep a lid on public sector compensation.

After working out an agreement with NDP Leader Andrea Horwath to get the Liberal budget passed, McGuinty said he’s now looking to PC Leader Tim Hudak to back up any move to legislate pay freezes.

“First of all, I’m hopeful it doesn’t come to legislated measures in order for us to deal with wage freezes, but secondly, should it come to that, I think it’s important that the public sector, our public sector partners know that we will not shrink from that responsibility,” McGuinty said Tuesday. “If it does come to that... I’m hoping we can count on Mr. Hudak and his party because I believe we have some common ground there.”

The minority McGuinty government moved on its own this week to lower OHIP fees for doctors, and is now staring down unhappy teacher unions.

His government has not budgeted for compensation increases for either group of public servants.

If the Liberals opt to resolve outstanding bargaining issues with legislation, they will need support from one of the two opposition parties.

Tory MPP Peter Shurman said his party supports a legislated pay freeze on all public sector wages, but will consider any proposal from McGuinty.

“If they’re serious about wanting to legislate a wage freeze in the broader public sector, then they have to demonstrate by getting together with us and engaging in reasonable debate,” Shurman said.

McGuinty has been so “nice” that the average broader public sector worker now makes about 27% more than an equivalent employee in the private sector — an unsustainable situation that’s helping propel the province toward a $411 billion debt by 2017-18, Shurman said.

Horwath, whose budget negotiations with McGuinty led to a new tax on the rich and increased spending in some areas, said she does not believe in a legislated solution to disputes in collective bargaining.

McGuinty 'Political Animal' and 'Lousy Premier': Shurman
By: Katie Franzios, Astral Media


With rumours swirling around Queen's Park that other opposition MPPs are being approached by the governing minority Liberals, one Progressive Conservative says it doesn't surprise him.

PC Finance Critic MPP Peter Shurman says Premier Dalton McGuinty will stop at nothing to get a majority government, calling him a "political animal" and a "lousy premier".

Last week, Tory Elizabeth Witmer resigned after 22 years as an MPP in Kitchener-Waterloo to take over as chair of the Workplace Safety and Insurance Board (WSIB). After the October election, the McGuinty Liberals received a minority government by only one seat so the move may off-set the balance of power at Queen's Park.

Shurman says he hasn't been approached by the Liberals and underlines he's proud to be a member of PC leader Tim Hudak's caucus. He says he wouldn't consider leaving the Tories.

“The Tories seem more concerned with pointing fingers and starting rumours than getting down to business and doing the hard work that needs to be done to keep Ontario on track." Liberal MPP David Orazetti said in a written statement. "We’re working hard and we’re focused on creating jobs, eliminating the deficit, and protecting health care and education.”

No date for a by-election to replace Witmer has been set.

Ontario slapped with single credit downgrade
By: Robert Benzie, Torstar Corp

TORONTO — Ontario has been walloped with a credit downgrade from one major debt-rating agency, but given a vote of confidence from another.

Moody’s Investors Service on Thursday downgraded Ontario’s rating on its $202-billion debt to AA2 from AA1.

Hours earlier, DBRS had announced it was keeping the province at AA and retaining a “stable” outlook thanks to the government’s pledge to curb spending increases.

But it was the Moody’s news that had some singing the blues.

“The downgrade of Ontario’s rating reflects the growing debt burden and the risks surrounding the province achieving its medium-term fiscal plan given the subdued growth outlook, extended timeframe back to balance and ambitious expenditure targets,” Jennifer Wong, a Moody’s assistant vice-president, said in a release.

The agency pointed out that there are “significant risks surrounding the province’s ability to achieve their medium-term fiscal targets and stabilize and then reverse the recent accumulation in debt.”

“This is catastrophic for the province of Ontario,” said Progressive Conservative finance critic Peter Shurman, predicting the downgrade would eventually result in a hike to Queen’s Park’s interest costs.

Not so, said Finance Minister Dwight Duncan.

“We got downgraded by one and affirmed by two, so two out of three that’s better than Ted Williams,” said Duncan, whose baseball analogy referred to Standard & Poor’s on Wednesday dropping the province’s outlook to “negative” from “stable” while not downgrading Ontario.

S&P’s change reflected concern about “the minority legislature’s ability to meet what we view as challenging cost containment targets in the next one to two years.”

Indeed, Moody’s said much the same thing, warning Ontario’s “expense growth targets appear particularly ambitious” given it has averaged seven per cent increases for the past five years yet plans to curb spending hikes to 1.9 per cent in the next two years and 1.1 per cent for the two years after that.

Duncan did not deny the three debt-raters’ moves were sobering.

“This action reminds us that it’s important that we continue to meet our targets or we risk paying more money to bondholders instead of for schools and health care,” he said, adding it underscores the need for the government’s wage freeze on one million workers on the public payroll.

“It reminds our bargaining agents and bargaining partners – our teachers, doctors, and other public servants – that there’s no new funding for wage increases and we must all work together to meet our targets,” the treasurer said.

The ratings agencies’ reports came the same week the minority Liberals amended their budget with a new income-tax bracket for people making more than $500,000 to appease the New Democrats, ensuring passage of the spending plan.

That new tax revenue has reduced the government’s deficit projection this year to $14.8 billion from the $15.2 billion projected on March 27.

Shurman, whose party voted against the budget, stressed the province will continue to bleed red ink until at least 2017-18, swelling the debt above $300 billion.

“We warned the government urgent action was required. Today’s downgrade of Ontario’s credit rating by Moody’s confirmed our fears.”

Moody's downgrades Ontario credit rating
Emily Senger, ctvtoronto.ca, With files from CTV Toronto's Paul Bliss, Bell Media

Credit rating agency Moody's has downgraded Ontario's rating, only one day after another credit agency warned the province that it could be in trouble should it fail to meet deficit-reduction measures.

The decision, released by Moody's Thursday, downgrades Ontario's rating to Aa2 with a stable outlook, down from its former rating of Aa1 with a negative outlook.

This follows a previous warning Moody's gave to the province in December, saying the province could get a credit downgrade if it fails to get its deficit under control.

The move also comes one day after ratings agency Standard and Poor's issued a credit outlook warning. The warning did not affect the province's borrowing rates, but it did change the province's credit outlook from stable to negative for a two-year period.

In its rationale for the downgrade, Moody's said the decision was due to a growing debt burden in the province, modest growth potential and "significant risks" in the province's ability to meet its ambitious financial goals.

These ambitious goals were laid out in the Ontario 2012 budget, which passed on Tuesday.

In the budget, the Liberal government predicted it will keep spending increases at only 1.9 per cent per year until 2015, and will then move that spending increase to just 1.1 per cent until 2018.

Moody's was skeptical that the province could meet these targets because they are much lower than previous expense increases.

"Expense growth targets appear particularly ambitious in light of growth in expenses averaging seven per cent annually in the five years to 2011-12 and continued pressures on health expenses, the province's largest expense item, due to demographic pressures," said a report released by Moody's Thursday.

The decision made by Moody's will not change borrowing rates yet, the finance minister said Thursday.

"I look forward to meeting the challenges we set out in the budget," Duncan told reporters.

But Progressive Conservative finance critic Peter Shurman was already firing back, in the hours after the credit decision, calling the downgrade "catastrophic news for Ontario."

"This will drive up interest rates and increase the cost of servicing our $280-billion debt," Shurman said in a statement. "Every one per cent increase in interest rates will cost our province an additional $500 million."

Shurman said it's time for urgent action to get the province's debt crisis under control.

On Wednesday, Finance Minister Dwight Duncan tried to play down the warning from Strandard and Poor's, saying it was just another indication that the government must meet all of its deficit-reduction measures set out in the budget, which was passed Tuesday.

"They're worried that the targets can't be hit, because they are aggressive," Duncan told reporters Wednesday.

A large part of the budget-reduction measures include the difficult task of freezing doctor and teacher salaries in the province for two years.

The province's contract with Ontario teachers expires in August.

Moody's also said that a credit rating upgrade for Ontario in the near term is unlikely, but noted that an upgrade is possible if the province meets the plans laid out in its budget.

Ontario hit with credit downgrade
By Don Peat ,City Hall Bureau Chief, QMI Agency

TORONTO - Moody’s Investor Service dropped the province to AA2 from AA1 Thursday, a move which could potentially add millions to the cost of servicing the province’s debt.

“This action reminds us it’s important that we continue to meet our targets or we risk paying more money to bondholders instead of for schools and health care,” Finance Minister Dwight Duncan said.

“It reminds our bargaining agents and bargaining partners - our teachers and doctors and other public servants, there is no new funding for wage increases.”

The news came on the heels of Wednesday’s negative outlook for Ontario from Standard & Poors, down from stable, although the firm kept it’s credit rating steady.

DBRS, the other major credit rating agency, also kept it’s rating and outlook for Ontario stable Thursday.

“We got downgraded by one and affirmed by two. That’s better than Ted Williams’ batting,” Duncan said, adding he doesn’t expect the change to hurt.

“I don’t think there will be significant impact at all in what we pay in interest.”

It’s a far more upbeat view than the one Duncan expressed last December, when Moody’s changed its outlook for the province from stable to negative.

“In the budget we will have to show that we are on target...and as we move towards the budget early next year we will have to insure that we continue to meet the targets we have laid out,” Duncan told reporters at the time.

“What Moody’s is saying is that they will be watching this budget very carefully.”

That budget is now in and credit rating agencies don’t like it one bit, Progressive Conservative finance critic Peter Shurman said.

“I haven’t seen anybody dance and weave like that since the last time I watched somebody do a Strauss waltz,” Shurman said of Duncan.

This is catastrophic for the province of Ontario.

“It means that $202 billion in paper - which means Ontario debt - could be affected very shortly by higher interest rates and therefore higher costs.”

All three agencies said they had concerns about Ontario’s ability to limit its spending growth to 1% in the coming years, as Duncan’s budget laid out.

Ontario now has a $15-bilion deficit, which is not scheduled to be eliminated until 2017-18.

If interest rates were to rise just 1%, it would add $500 million to the province’s annual debt servicing costs - which are already more than $10 billion a year.

Liberals courting Tory and NDP MPPs to resign to force more by-elections
Robert Benzie Queen's Park Bureau Chief, Torstar Corp

Premier Dalton McGuinty has told his Liberal caucus “at least two more” Progressive Conservative and NDP MPPs are being wooed to resign their seats, the Star has learned.

In the wake of veteran Tory Elizabeth Witmer’s surprise departure last Friday to chair the Workplace Safety and Insurance Board for $188,000 a year, McGuinty confided to Grit MPPs that other potential defections loom.

“Dalton was really just saying what we’re hearing from them (PC and NDP MPPs),” said one Liberal MPP, speaking on condition of anonymity because caucus discussions are private.

“Some of them clearly aren’t happy and want to move on,” the MPP said, adding other Liberals welcomed McGuinty’s candour.

That’s because the backroom wrangling has significant political ramifications in the minority legislature.

After Witmer’s resignation, which will trigger a by-election in Kitchener-Waterloo later this year, the 107-member house consists of 52 Liberals, excluding Speaker Dave Levac, 36 Tories, and 17 New Democrats.

If the Liberals win Kitchener-Waterloo — as a Forum Research poll this week suggested they may — McGuinty would have a de facto majority.

But the governing party is not content to put all its eggs in one basket.

That’s why other opposition MPPs are quietly being courted to force other by-elections in Toronto and GTA seats that the Liberals believe are winnable.

Because there’s no longer a pension plan for MPPs, some Tories and New Democrats are quite susceptible to such overtures.

Full-time appointments to agencies, boards or commissions as well as patronage jobs such as justice of the peace positions, which pay $119,000, are on offer to members, whose base salary is $116,500.

While a senior Liberal insider insisted Friday “there is no direct or indirect contact” being made with any Tory or New Democrat MPP, there are some back-channel chats.

“There’s all kinds of dissension in the Conservative ranks. (PC Leader Tim) Hudak should be worried,” the Grit noted.

Conservative MPP Peter Shurman (Thornhill) said it proves McGuinty “will stop at absolutely nothing to make sure he brings this back into what he perceives is balance, which is a majority government for him.

“Dalton McGuinty is a political animal. God knows he’s a lousy premier. He will do whatever he has to from a political perspective to take his government into a majority position,” he said.

Shurman emphasized he was unaware of any of his colleagues angling for new jobs.

“I’m telling you categorically I certainly don’t know anything of that and, frankly, nobody’s dangled anything in front of me or anyone I’ve talked to.”

Still, the swirling intrigue has Queen’s Park abuzz even though no moves are expected until at least next week and any by-elections may not be held till September.

Another Liberal source confirmed the party is already looking for candidates in one of the five Toronto ridings held by the New Democrats. The Grits represent the city’s other 18 constituencies.

Moody's downgrades Ontario's rating to Aa1 with 'stable' outlook
Andrew Moran, Toronto Headlines Examiner, Clarity Digital Group LLC

Toronto - One day after Standard & Poor’s downgraded Ontario’s credit rating from stable to negative, credit rating agency Moody’s downgraded Ontario’s debt shortly after markets closed Thursday that will affect $202 billion in debt securities.

The Canadian province’s rating was reduced from Aa2 to Aa1 and the outlook was changed from negative to stable. Moody’s made the downgrade because of debt totals, a stalling economy and risks to the Ontario’s medium-term fiscal plan.

“The downgrade of Ontario's rating reflects the growing debt burden and the risks surrounding the province achieving its medium-term fiscal plan given the subdued growth outlook, extended timeframe back to balance and ambitious expenditure targets,” said Jennifer Wong, Moody's Assistant Vice President and lead analyst for Ontario.
Advertisement

It also noted that there is little chance the rating could improve any time soon. However, if the province can balance the budget and meet its projected targets then it “could put upward pressure on the rating.”

Ontario Progressive Conservative Finance Critic Peter Shurman issued a statement immediately following the news, in which he called it “catastrophic news for Ontario” and the downgrade “confirmed our fears.”

“The consequences of this are very real and very troubling for our province. This will drive up interest rates and increase the cost of servicing our $280 billion debt,” said Shurman. “Every one per cent increase in interest rates will cost our province an additional $500 million.”

The downgrade comes as the Dalton McGuinty’s Liberal government passed its budget 52 to 37. Ontario faces a $15.3 billion budget deficit, but Finance Minister Dwight Duncan said Queen’s Park will have a balanced budget by 2017-2018.

There was concern among the Grits that an election would be held six months after the last one if Andrea Horwath and the New Democrats didn’t vote for the budget. Although much of the NDP’s demands were met, such as a two percent tax levied on incomes more than $500,000 and an increase in welfare and disability support payments, the NDP abstained from the final vote.

“We’re showing the people of this province that we’re willing to make minority government work but we’re also showing them the sort of Ontario we want to build,” said Horwath in a press release. “This is not the Budget I would have introduced as Premier, but I feel we serve people better by getting to work here in the Legislature than by chasing votes in an election.”