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

Written by Javed Iqbal

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

But then stormy economic and political weather threatens Ford’s second-term government.

Ontario confronts highest inflation in almost 40 yearsan economic reality that will have a strong impact on everything from the amount of tax revenue the government brings in to the amount of pressure the public sector unions exert for higher wage increases.

The new cabinet also faces one affordability crisis which has spread to all corners of the province, one overburdened health care weakened by more than two years of handling the COVID-19 pandemic, and one long list of promises must be stored.

Ford and his newly appointed ministers are scheduled to be sworn in at 11:15 a.m. at an outdoor ceremony in front of the Legislative Assembly.

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

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

Here’s a look at the five biggest issues facing Ford and his ministers:

1. Inflation

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

The Progressive Conservatives’ efforts to make life more affordable have so far focused primarily on makes driving more affordable: scrap Ontario’s $ 120 vehicle registration tax, stop tolls on provincial-owned highways, and promise to reduce the gas tax by 5.7 cents per liter for six months with effect from July 1st.

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

Of course, inflation also makes it more expensive for the government to buy things and build things, so expect to see the price tags for the government’s major construction projects fly past their budgets.

The cost of living in Canada rose at the fastest pace in nearly 40 years in the year to May, Canada’s statistics reported this week. The annual inflation rate is 7.7 per cent. (Robert Krbavac / CBC)

But the biggest inflation concern for the government will be what it does with public sector wages. Wages account for about half of the province’s annual operating budget.

2. Public contract negotiations

Whether it’s teachers, nurses, hydropower workers, police officers, road maintenance staff or Service Ontario staff, they all see inflation eroding their home wages. This will certainly lead to unions in the public sector asking for higher wages every time their next round of negotiations begins, the argument being that any annual wage increase of less than inflation equates to a wage cut.

Annual inflation of 7.7 percent puts a dramatically higher bar for wage increases than the public sector has seen for decades.

Add to that the fact that the Ford government annual wage increases in the public sector to 1 per cent through its Bill 124 at a time when private sector wage increases were higher and you have a significant accumulated demand for wage collection.

It all lends itself to some tough negotiations, starting with training workers. Do not forget that Ontario saw schools closed throughout the province by teacher strikes only weeks before schools were closed due to COVID-19.

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

One of the stumbling blocks in these 2020 negotiations: the government offered teachers one percent wage increases, and the unions wanted increases in line with inflation. At that time, inflation was around two per cent.

It will be particularly interesting to see how contract talks with healthcare professionals are handled, given all the praise Ford gave them during the pandemic. Understandably, they want the government to do that puts his money where his mouth is.

3. The health system

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

Elliott’s successor will inherit responsibility for a $ 68 billion system that is difficult to deal with lack of staff, register waiting times in emergency rooms, and one large surgical backlogalthough there is currently a break in COVID-19 cases at the province’s hospitals.

The Minister of Health will most immediately need to manage the human resources in the health care system and ensure that the system is prepared for any new variant of COVID-19 that may appear in the autumn. The new minister also wants to move on health system reforms the government began a pre-pandemic designed to tackle the root causes of the drug problem in the hallway.

It has sources close to the government previously told CBC News that former associate attorney Sylvia Jones is the frontrunner to become health minister, with Prabmeet Sarkaria, the former head of the Finance Council, also under consideration.

Sylvia Jones served in the Cabinet as Ford’s government attorney during the COVID-19 pandemic and was the minister responsible for overseeing Ontario’s vaccine rollout. She is a possible successor to Christine Elliott as health minister. (Cole Burston / The Canadian Press)

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

4. Affordable housing

The sky-high costs of buying a home have withdrew a little in the last few months since the Bank of Canada raised interest rates in an attempt to curb inflation.

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

The government promises to pave the way for 1.5 million new homes to be built in Ontario over the next decade, a goal determined by the Provincial Task Force on Affordability. But the government did not exactly embrace much of the rest of the task force’s recommendations, such as its call for greater density in neighborhoods with single-family homes.

An affordable housing task force appointed by the Ford government recommended provincial force municipalities increase the density of neighborhoods currently laid out for single-family homes. (Ed Middleton / CBC)

That housing action plan The Ford government, unveiled in the spring, is largely focused on speeding up municipal approvals of development projects and observers in the sector the question of whether it will go far enough nearby to boost housing supply to a level that is beginning to curb prices.

Housing is a candidate to have its own associate minister in Friday’s new government, a proposal that will recognize the importance of the issue as well as give an extra hand to the Minister of Local Government and Housing.

5. Keep promises

Ford won re-election on the simple slogan “Get It Done” and a mantra of being the party that says “Yes”. The long list of things Ford said “Yes” to provides a practical scorecard to mark the government against in the coming months and years.

A few of the promises you need to keep an eye on:

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Javed Iqbal

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