To the Point: For the Week of December 1st, 2024
To the Point for the Week of December 1, 2024
To the Point, a weekly news and analysis roundup from ONpoint Strategy Group, cuts through the noise and delivers essential federal, provincial, and municipal stories right to your inbox.
This week, Crombie tacks to the centre, Ford threatens Section 33, and the Auditor General issues her report. Poilievre shuts down municipal revenue sharing, potential changes to the Region of Peel are on the horizon, and a former police chief gets appointed Chair. The Mar-a-lago aftermath continues, the GST holiday flops, and bad economic news rattles the feds.
PROVINCIAL
The Political Realignment Reaches Ontario
“This is a new type of Liberal Party,” announced Bonnie Crombie this past Tuesday at her first leader’s fundraising dinner since ascending to the party helm. Her proclamation signals the Party’s intent under the former Mississauga Mayor to shift the party to the political centre. Crombie affirmed this shift by publicly voicing her opposition to the federal carbon tax as well as the proposed rebate cheques offered by both Trudeau and Premier Ford, adding that she would much rather permanently cut income tax. She went on to say, “we have to stop practicing the kind of politics that makes regular people hate us.” According to Liberal sources, the dinner raised a record $1.65M, a sign that the third-place party could be making a comeback.
Since 2016, the Western world has slowly been undergoing a dramatic political realignment. In the US, for example, Democrats are now perceived to be the party of the college educated elite. Republicans are firmly a multi racial coalition of working and middle classes. A virtual mirror image has emerged here in Canada, and the Ontario Liberals are recognizing the shifting political landscape. The Party is taking a pragmatic approach by adopting policy stances previously perceived as taboo to the left, and in direct contrast with the federal Liberals: tough on crime policing, tax cuts and leaning away from “Culture War” issues. Is it enough to knock Ford out of the Premier’s seat in the Spring? Probably not, but if Crombie can couple these centre(-right?) positions with authenticity and sincerity, those who identify as “business Liberals” who find themselves politically homeless at the federal level may find a place to stay with the Ontario Liberals.
Premier Ford Moves on Moving Out Encampments
The Premier followed through on previous statements regarding homeless encampments by declaring the government’s intent to table legislation that will give municipalities the tools to clear out homeless encampments. Ford posted a letter on X addressed to 12 Mayors who previously called on the Premier to act, detailing measures the government plans to implement. Some measures include more shelter funding, “explicitly and unequivocally” prohibiting public drug use, and new initiatives to tackle rampant drug addiction. Most significantly, the Premier explicitly stated he was prepared to use the Notwithstanding Clause to prevent “interference” from the courts on what he called “the shared goal” of clearing out encampments.
Ford and the PCs continue to lean into their populist voter sensibilities, although further ahead of Crombie’s Liberals. Just like bike lanes and drug injection sites, the Premier has the pulse of the electorate on these issues. Understandably, and justifiably, people are tired of what their cities have become and recognize the dominance of progressive “extreme empathy” at the municipal level has resulted in community decline. People want their public spaces back. People want to feel safe in their communities. People want action. It will be interesting to see how Crombie walks this tight rope as she still has a lot of very left elements in her party, she will need to placate to avoid losing them to the NDP. The Premier’s timing on the announcement is sure to deprive oxygen from the Auditor General’s Report.
Auditor General Report Fall Out
Ontario’s Auditor General Shelley Spence issued her first annual report on Tuesday. The report delved into financial issues at the Toronto District School Board, the closure of drug injection sites, as well as government advertising spending. The Auditor General also reported findings on land use and development issues, including the process used to redevelop Ontario Place that was described in the report as “irregular and subjective.” The AG also looked at the government’s use of Ministerial Zoning Orders (MZOs), many of which were issued without justification, according to the report.
The latter are making the most noise at Queen’s Park, as expected. The Ontario Place redevelopment has been wielded by the opposition NDP for months, and the findings, particularly around ballooning costs and implementation, will continue to be used as fodder by Marit Stiles. The government implemented a new framework for issuing MZOs in April that already address the recommendations laid out in this report to ensure MZOs are justified and needed. Housing Minister Paul Calandra stated that he has revoked three MZOs under the new framework. As is common practice for governments of all stripes, the PCs will give thanks for the report, commit to thoroughly reviewing the recommendations and the opposition will use it to attack the government in the legislature.
MUNICIPAL
The Future of Peel Region
Although dissolution was officially declared dead in late 2023, the Peel Region Transition Board (PRTB) was told to continue exploring which regional services could be transferred to the lower-tier municipalities. The PRTB completed its review and delivered recommendations earlier this year. Signals suggest the government is preparing to follow through on some of the recommendations through various legislative amendments. All signs point to the government proceeding with the following changes, each accompanied with various financial considerations and restructuring:
Local municipalities will be given responsibility of all regional roads starting in 2025.
Mississauga will be given authority over its own waste collection, while the Region will continue to collect waste for Brampton and Caledon.
Land use planning will be transferred to the lower-tier municipalities, with the Region funding the transition.
If the government implements the predicted recommendations, it will be a positive step towards eliminating red tape at the local level that can contribute to improved and streamlined local service delivery. However, these potential changes still warrant questions and careful consideration of unintended consequences. First, why implement such dramatic changes so close to an expected election? A lot of changes all at once could cause administrative chaos and confusion at the three municipalities affected, especially around housing development. Second, how will other municipalities perceive the changes? Does it create precedent for the province to make other changes to various regions, whether welcomed or not? It also raises questions as to why scrap dissolution, but then proceed with recommendations that draws down the authority and jurisdictional reach of the Region anyway? Perhaps it is the “Bonnie Deal,” after all. Will other municipalities ask for it?
Poilievre Says No Municipal Money
It was reported on Sunday that Conservative Party Leader Pierre Poilievre explicitly stated a Conservative government would not transfer a portion of the GST on new home sales to municipalities. During a stop in Aurora last Friday, Poilievre was quoted as saying “don’t ever let them bullshit you, [municipalities] are bursting with cash, and they’re wasting it all…That’s why we don’t have enough infrastructure.” Aurora Mayor Tom Mrakas – who is leading the charge on the policy proposal Poilievre vehemently rejects – responded by saying “I was disappointed to hear the ill-informed comments from the leader of the opposition. Suggesting that municipalities are 'flush with cash' does not reflect the reality we face."
Poilievre’s comments are not a surprise since he has previously laid out policy proposals squarely aimed at municipalities, including a federal “building bonus,” should municipalities meet or exceed housing construction targets, or a penalty for those who do not. Poilievre also pledged to cutting the GST on new home purchases under $1M, funded by scrapping the Housing Accelerator Fund and the Canada Housing Infrastructure Fund. Poilievre has leeway to be intensely focused on municipal responsibilities over housing and will undoubtably have a mandate to move forward with his housing agenda should he be elected Prime Minister. Perhaps Poilievre could find an ally in Vaughan Mayor Steven Del Duca (despite their political leanings) who we previously noted is leading the charge among municipalities to reduce development charges. Poilievre’s commonsense instincts should lead him towards working with Mayor Del Duca on developing a “building bonus” to achieve mutual housing objectives.
Province Appoints a Former Police Chief as Chair of York Region
As we previously suggested may occur, the province this week announced the appointment of former York Region Police Chief Eric Jolliffe as Chair of York Region. The new Chair had a distinguished career in law enforcement up to his retirement in 2020, including a myriad of awards and achievements, and brings a wealth of experience to the role. The response was overall positive of this announcement, with almost everyone pointing to Jolliffe’s community ties and achievements in the region.
FEDERAL
Mar-a-Lago Meeting Aftermath
The aftermath of the Mar-a-lago dinner meeting between President-elect Donald Trump and Prime Minister Trudeau dominated federal headlines this week. First, it was reported that Trudeau left the meeting committing to bolstering border security, including procuring helicopters and drones as well as an increase in personnel to patrol critical parts of the border. Pierre Poilievre accused the Prime Minister of coming home without a plan to stave off the President’s threats and later committed to taking significant action on immigration as Prime Minister. A day later, Trudeau briefed opposition MPs on the meeting, only to be overshadowed by news of Trump’s 51st state quip. To top it all off, a poll released yesterday suggests Canadians agree with President Trump that the federal government needs to enhance border security.
Perhaps the most Prime Ministerial thing Justin Trudeau has done was jump on an airplane and immediately get an audience with the President-elect to respond to his threats directly. It showed urgency and appreciation of the moment that required a visible response. Unfortunately, the aftermath of the meeting confirms the observation that the government is unable to mount a convincing political and policy response to the situation. So many converging issues are paralyzing the government’s ability to deal with multiple crises. Cost of living, immigration, criminal justice, and housing, among other major issues, have crippled this government. While we have previously predicted the next election to come well beyond October 2025, the converging issues facing the country may lead to a more serious political crisis in the country that may precipitate the fall of the government.
GST Holiday Flop
In the wake of Trump’s tariff threats, the ONpoint team predicted the GST holiday announcement would not amount to much hype or fanfare, and it looks like it was a sound prediction. A Postmedia-Leger poll found that Canadians are overwhelmingly unimpressed with the policy. A whopping 65% of Canadians said the measure would not change their voting intentions while 70% perceived the proposal as purely electoral. Typically, these sorts of proposals lead to a popularity bump, but the “tax relief” may have had the opposite effect, with a drop of 5% support that the NDP were pleased to absorb.
The GST holiday was just another example of the government’s crippling inability to take meaningful action on major policy fronts. Canadians are not asking for a tax holiday; a band aid for a bullet wound. They want meaningful change. The GST holiday was also badly conceived as it is estimated to barely save the average family $5. Yes, a whole five bucks. As if the perceptions couldn’t be worse, Canadian Federation of Independent Business President and CEO, Dan Kelly, posted on X a complicated response from the Canadian Revenue Agency over his query about how the GST holiday would apply to things like model planes. Kelly has been a key source online to understanding how bad of a policy the GST holiday truly is.
Bad Economic News for the Federal Government
The week began with bad economic news for the federal government that only got worse as the week progressed. On Monday, it was reported that Canada’s economic growth slowed in Q3 to 1%, down from the 2.2% in Q2, and GDP per capita declined for the sixth straight quarter. The federal government’s deficit is up 60% in the first half of the fiscal year compared to the same time last year. Unemployment rose to its highest level since 2017 to 6.8%. To add to the country’s bleak economic news, former Bank of Canada Governor Stephen Poloz declared that Canada is now in a recession, even though the economy grew largely due to population growth.
The numbers are bad, and things are probably worse than we think, despite the Finance Minister’s insistence that the country is in a “vibecession” (how many straight quarters of declining "vibes” constitutes a “vibecession”, exactly?). An indication that the economy and government finances are off the rails comes in the form Chrystia Freeland’s lack of urgency to table a Fall Economic Statement, which as you could guess, typically comes in the Fall (around early November) and not in mid-December. Pierre Poilievre smells blood in the water, offering up two hours of Opposition Day in the House of Commons to allow the Minister to deliver her economic and fiscal update to Canadians. Freeland rejected the offer, accusing Poilievre of political posturing. In the Deputy Prime Minister’s defense, if things are as bad as we believe they are, we understand why she would want to keep things hidden. Either the Minister will forego a Fall Economic Statement, as she is not bound by any law to deliver one, or will provide an update so watered down and politically spun it will only lead to more questions than answers.
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