A top economist's read on the FES
Plus: Ford’s mystery tour, Parrish’s ”annoyed,” a bail plea and push for a constitutional detour, bike lane’s no more, a swap at committee, Ghamari’s back, MacLeod’s farewell, garbs, zingers and more
THE LEDE
With less red, more revenue, the jobless rate inching up, slower growth and a cheque spree, the Ford government is out with a new economic update — and we’ve enlisted the province’s former top economist to help break it down.
Here’s what you need to know:
— It’s less red for the province. The deficit — initially projected to hit $9.8 billion — has shrunk by $3.2 billion, now forecasted at $6.6 billion, due to a boost in revenue from changes to the federal capital gains tax — projected to pump $3.3 billion over three years, starting this year — and a rosier economic forecast.
While that’s good news for the government, it’s a long way from the $200 million surplus projected last year.
But still, the province is on the path to black. Another budget hole, projected at $1.5 billion, is expected next year, with a slim surplus of $0.9 billion the year later.
A balanced budget as soon as next year — something Finance Minister Peter Bethlenfalvy hinted could be on the table — would give the Tories a chance to tout their economic acumen on the campaign trail.
“I’m always hoping I can beat the numbers,” he said.
“It’s quite possible,” said Brian Lewis, the province’s former chief economist. “One thing we don’t know from the outside is how cautious this outlook might be. It’s usually the case that these forecasts are kind of cautious because what you don’t want to do today is say ‘hey, the deficit is not going to be X, it's going to be Y’ and come out and march and go ‘whoops!’ There’s a pretty good chance that this actually is a cautious update and their risks are more balanced towards more improvements later on.”
From an economic angle, however, the forecast is as good as zero. If the gap does end up at $1.5 billion next year, in a $1.2 trillion economy, Lewis said, it’s a drop in the bucket. “I know there’s a magic to zero, but from an economic perspective, anything that small is essentially a balanced budget.”
— There’s slow growth. Real GDP is on track to shrink by 0.9 per cent — a jump from the 0.3 per cent projected in March. A 1.7 per cent is expected in 2025, with a 2.3 per cent increase in 2026 and 2027.
“It’s actually slower than our population growth. From a per capita basis, this is not really much of an economic engine — it’s actually a per capita decline,” Lewis said.
But there’s good news for the province. “When they did the budget, the forecast was only 0.3 per cent growth this year, and if you went and looked through the private sector projections available at the time, the talk around the economy in the early part of the year was a lot more downbeat,” he explained. “People were talking about the possibility of a short, mild recession but what happened was the economy actually grew at a pretty reasonable clip during the first half of the year.”
The debt to GDP ratio is projected at 37.8 per cent, down from 39.2 per cent.
Employment growth has slowed to 1.4 per cent, down from 2.4 per cent last year. It’s expected to hit 1.5 per cent next year, with an average 1.3 per cent between 2026 and 2027, still adding a healthy 444,000 net new jobs over last year’s levels.
— Spending is still up. The government — which tabled, by far, the most expensive budget in history — is spending more than projected at $218.3 billion, up by $3.8 billion.
— Ahead of an expected spring election, the government will spend $3 billion — of a $6.9 billion revenue bump — to rush $200 “rebate” cheques, promising to ease the sting of soaring prices “in the face of high interest rates and the federal carbon tax.”
The climb in revenue was driven by higher than projected revenue from personal income, corporate and sales taxes.
“The government had the option to borrow less and chose not to take it,” Lewis said. “The ongoing cost of that decision is around $120 million per year, based on the government’s borrowing rate. So, putting that money toward reducing the bottom line would have been a reasonable choice.”
Bethlenfalvy doesn’t see it that way. “I’m under no illusions that this will relieve all of the affordability pressures… but it will help,” he said. “It’s real support and — most importantly — it’ll allow the people to choose how this money can best help them.”
The pocket cash — set for deposit in the new year — will go to those who've filed their income taxes last year and are neither bankrupt nor incarcerated this year. Families will see a bonus of $200 for each child under 18.
Lewis warned, though, that the government’s sweeping cash rollout is unfocused and could bypass those most in need.
“If the idea was to target the people who need it the most, this would not be the way to do it,” he said. “It'll range from a lot of low-income people, for sure, all the way up to the richest people who live here. Some of the poorest people who live here don't file income taxes at all. If the interest was to help the people who are hurting the most here, I would have done this in a completely different way. I would've increased or supplemented the Ontario Works amounts, for example.”
Meanwhile, other policies making the cut include:
The Ontario Municipal Partnership Fund will get a $100 million top-up over the next two years.
A fourth, temporary extension to the gas tax cut — 5.7 cents a litre for gasoline and 5.3 cents a litre for diesel fuel — till the end of June. It'll deliver, the government says, $380 in household savings over three years.
Tuition relief — totalling $88 million over three years — for medical school students who, in return, promise to work for five years as a family doctor in the province once their training is wrapped up.
An additional $150 million over two years will triple the number of people eligible for covered IVF through the Ontario Fertility Program. Another $115 million will be set aside for a tax credit covering a quarter of eligible fertility costs, with a $5,000 annual maximum.
— The LCBO’s revenue will climb in the long haul — but it’ll fall short of projections for this year and next. This year, the liquor store’s net income will hit $2.17 billion, $286 million less than expected. Next year, revenue is forecasted at $2.23 billion, $254 million below target.
The government says it’s a result of July’s strike — which cost $102 million — and lower sales projections due to lower consumption.
By 2026, revenue is projected to hit $2.65 billion, up by $96 million.
Here’s the breakdown of the net income:
“It’s a less buoyant net income but they’re not in any trouble here,” Lewis pointed. “They’re just making a little bit less than they thought they were going to make a while ago.”
Meanwhile, the acceleration of the Ford government’s plan to liberalize alcohol — which Bonnie Crombie called the “billion dollar boozedoggle” — is expected to cost the liquor store $179 million over the next two years.
By 2027, the LCBO is expected to have 77.1 per cent of the alcohol market share, compared to 51.2 per cent this year — eating up some of The Beer Store’s current monopolistic share, which is expected to shrink to 15 per cent.
— Hidden in the update is a projected dip in housing starts. With the province’s goal to build 1.5 million homes by 2031, only a fraction — under a quarter — is set to be built by 2027.
It’s a trend. In last year’s fall economic statement, the government projected it would fall short of the “ambitious but achievable target” set by the housing task force — with 84,500 projected starts in 2024, 89,200 in 2025 and 94,400 in 2026.
This year, it’s even lower, with the province forecast to 81,300 starts in 2024, 86,500 in 2025 and 93,200 in 2026.
While “progress is being made,” the province blamed the slow pace on “a challenging economic environment, including elevated interest rates that impact the pace of new home construction.”
“It’s not surprising that the forecast has come down,” Lewis said. “On one hand, there’s fewer people interested in buying a new house, because the financing costs have gone up. On the business side, they also borrowed to finance their project so the financing costs have gone up on the supply side of the market. It’s not at all a surprise that they have been slow, and they actually look like they’re going to slow further than expected.”
It’s bad news, the former civil servant explained, for a government that has “really put itself out there to try to get more houses built” — but it’s not all to their blame. “They’re really incentivizing municipalities to get houses built and have made a lot of regulatory changes,” he added.
With the threat of an early election in the air, a ton was at stake. Lewis says that while the older rule book was tossed aside during the pandemic — with big economic updates every six months — it’s atypical to see a fall blueprint with such high spending.
“They’ve certainly done a lot more in this statement than you would normally see — and it’s probably not a coincidence, given the speculation that there will be a spring election,” he said.
Meanwhile, the Opposition isn’t happy — calling the document “pale,” an abandonment and full of “stale ideas and empty promises.”
— “With Doug Ford, you’re not getting what you paid for,” said NDP leader Marit Stiles. “Instead of reclaiming our place as the economic engine of Canada, Ontario has become a have not province, receiving more in equalization payments year over year.”
— “The thing is — the help that Doug Ford is offering everyday people in Ontario pales in comparison to what he has given away to his rich friends and insiders,” added Liberal leader Bonnie Crombie. "People are absolutely right to ask the Conservatives where their tax dollars are going, because with Ford, it’s very clear that precious little is going to help them.
— “All the things that we should be able to expect from provincial governments — to keep our neighbors housed, to make sure homes get built, that doctors are available, mental health is accessible — the Premier has walked away from,” Green leader Mike Schreiner charged.
AT THE PALACE
— The House is in session. Next week is the last before constituency week — and there are 20 days until the winter recess.
Here’s what’s on the schedule next week:
Monday: A mystery government bill will be introduced in the morning. Later in the day, Marit Stiles’ “motion on the creation of a new public agency, “Homes Ontario,” to oversee the construction of new homes, will be debated, followed by second reading of the fall economic statement.
Tuesday: A government bill will be debated in the morning and afternoon. In the evening, PC Amarjot Sandhu’s motion to “explore the establishment or adjustment of a waiting period for drivers holding a Class G license before they can apply for commercial vehicle licenses” is up for debate.
Wednesday: The government bill is up for debate. In the evening, PC Christine Hogarth’s motion to “provide greater resources and options for families that wish to have children and are struggling to conceive” will be debated.
Thursday: The same government bill is up for debate in the morning. The business that’ll take place later in the day is TBD, but in the evening, Liberal Stephanie Bowman’s Bill 195, Cutting Taxes on Small Businesses Act will be debated.
— A small switch on the committee roster on the government’s side: At Procedure, Tyler Allsopp will take over for John Yakabuski, who’d replaced Amarjot Sandhu. At the Interior, Allsopp is out and Rudy Cuzzetto is back. Here’s the complete list.
— Premier Doug Ford is set to headline a series of lucrative, $1,000-a-plate Leader’s Receptions starting next week.
Ford will hit the fundraising circuit in Ottawa with Sylvia Jones on Tuesday and in Toronto with Rob Flack on Thursday, according to an email from chair Tory Miele. Later in the month, Ford will join Mike Harris Jr. in Kitchener, Stephen Lecce and Sam Oosterhoff in Toronto and Prabmeet Sarkaria in Vaughan.
On December 3 — the night of Bonnie Crombie’s glitzy leader’s dinner — Ford will join Raymond Cho in Toronto.
The mystery: Though the party typically lists fundraising events on their site — without mentioning Ford — it’s unclear why this dinner tour wasn’t listed publicly. Ford’s annual “Leaders’ Dinner,” if you’d recall, was scrapped in wake of the Greenbelt land swap.
— Goldie Ghamari — who was booted from the government caucus in July over “serious lapses in judgement” — spared with the government over why they haven’t passed Bill 93, Joshua’s Law.
“Why did this government promise to pass Joshua’s Law before summer but then shut down the Legislature one week early,” Ghamari asked. In response, Steve Clark said he’d be “happy to sit down with the member for Carleton and discuss the situation.”
The independent dropped a spicy teaser of her question — not one “handed to me” — on X a day before.
Meanwhile: Ghamari is under fire by the Canadian Association of Journalists for “putting a target on journalists’ backs,” over “repeated online attacks” against journalist Samira Mohyeddin, whose Persian restaurant was later vandalized. The incident is under police investigation.
— Still, in the Independents’ corner, Vincent Ke is celebrating the arrival of his first grandchild, who was born on Sunday.
— Liberal Stephen Blais has a new Substack. It’s called “The Blaze.”
— Nomination watch: Andrew Dowie is back on the Tories' ticket in Windsor—Tecumseh. Former police chief Peter Yuen will carry the Liberal banner in Scarborough—Agincourt. Over on Stiles’ team, Peggy Sattler was nominated in London West. Check out who’s already been nominated using our interactive tracker.
— Here are some of our favourite Halloween duds and jabs:
Premier Ford playing “What’s in the Box.”
Steve Paikin and John Michael McGrath in Star Trek gear.
Bike lanes, bike police and LCBO bags, too.
A kid dressed as Olivia Chow got the ultimate prize — an invite to City Hall.
Inside The Trillium’s bureau, two favourite Fordisms: Charlie Pinkerton — the “800 pound gorilla” — and Jack Hauen — “the cheese that slipped off the cracker.”
— A slate of watch parties is coming up for next Tuesday’s Harris v. Trump vote, including Aurora Strategy’s shindig, where Liberal leader Bonnie Crombie will be, along with “other senior political players, labour leaders and executives from across the political spectrum.” Ben Mulroney will be there, too.
TABLED
— Bill 215, Ukrainian Heritage Month Act — The bill, if passed, would proclaim September as Ukrainian Heritage Month. It’s PC Sheref Sabawy’s second heritage bill — in 2019, July was proclaimed as Egyptian Heritage Month.
— Bill 216, Building Ontario For You Act — The bill, introduced by Bethlenfalvy, would enact the fall economic statement.
— Bill 217, An Act to proclaim Retiree Experience Awareness Day — PC Daisy Wai’s bill would proclaim June 15 as “Retiree Experience Awareness Day.”
KILLED
— Opposition Day #1 — Marit Stiles’ motion to “deliver mental healthcare at no cost to individuals as part of Ontario's universal healthcare plan” was killed 61 to 33.
— Bill 203, Keeping Primary Care Fair Act — The bill, tabled by Adil Shamji, to prevent nurse practitioners from charging for services that should be covered in insured settings and increase penalties for breaking the law was killed on second reading 66 to 33.
ON THE RECORD
MacLeod’s final bow — In her parting speech, PC Lisa MacLeod, emotional and raw, opened up about her political career, the highs and lows, her sharpest naysayers — who usually “came from [her] side” — and more.
“Every single one of you, I look at and you’ve given me a story,” she said. “You’ve given me life. And despite what you might think when I’m in question period, I do look at each one of you with deep admiration and affection — even when you may have been my harshest critic, and that usually came from this side. I learned a great deal from you.”
MacLeod told the story of her, John Yakabuski and Steve Clark crashing the NDP caucus, bringing in 50,000 amendments to the HST, and John Fraser’s humor, Jim Flaherty’s passing and the “comforting gestures” amid her health ordeal, with “thoughtful notes” from Jim Bradley, Cheri DiNovo, Suze Morrison, Jill Andrew, Will Bouma and his wife.
IN THE NEWS
— The Ford government will rip out “sections” of cycling lanes on Bloor, Yonge and University.
Per a regulatory proposal updated yesterday, the province’s new power would “facilitate the removal of these lanes” and compel the city to support the process. Still, it’s unclear which sections will be removed and how fast it’ll take.
But it’s “common sense:” Transportation Minister Prabmeet Sarkaria said the government is “doing everything we can to fight congestion and keep major arterial roads moving.” “Bike lanes should be on secondary roads, where they make sense of the more than 70 per cent of people who drive and for the 1.2 per cent who commute by bike,” he added.
— Carolyn Parrish isn’t happy about the suspense around Peel’s divorce. “The secretive way that this has all been done is very annoying because the transition team’s report will never see the light of day — we’ll never know what they recommended, we’ll never see their numbers,” Mississauga’s mayor said at council on Wednesday. “The province will do as they always do and just make it happen.”
Parrish said it’s “disconcerting” that the city is still in the dark over how a new water agency will operate — with no word expected until January, according to Housing Minister Paul Calandra. “If what we’ve been led to believe — it’s not public but enough people know that the world is not going to end if I say it, water and waste being transferred over to a separate entity and is taken out of the region. This is going to have a very dramatic change,” she said.
As this newsletter reported last week, water, waste and roads are set to be downloaded to the three municipalities, with water run by a new agency overseen by an appointed board. The region would remain intact but shrink — primarily responsible for the delivery of social services, along with emergency services and health.
As one local source put it: “Who isn’t annoyed with the process?”
Meanwhile, last week, Premier Ford took a swipe at Bonnie Crombie for “not getting along with Brampton’s mayor.” “That is all strained out with a new mayor. They are getting along and we will work through this and make sure that the region is taking care of it and that each individual city will be taken care of. So far, so good.”
— Also on our radar, the new Peter Gilgan Mississauga Hospital is in jeopardy after council rejected Trillium Health Partners’ request for $450 million to help fund the project.
— A group of big city mayors are calling on the Ford government to pull out the notwithstanding clause to tackle homeless encampments.
“We have heard your invitation for a clear request for provincial action,” the letter wrote. “We request that your government consider the following measures, and where necessary, use the notwithstanding clause to ensure these measures are implemented in a timely and effective way.”
Signatories include: Barrie’s Alex Nuttall, Brampton’s Patrick Brown, Brantford’s Ken Davis, Cambridge’s Jan Liggett, Chatham-Kent’s Darrin Caniff, Clarington’s Adrian Foster, Oakville’s Rob Burton, Pickering’s Kevin Ashe, St. Catherine’s’ Mat Siscoe, Sudbury’s Paul Lefebvre and Windsor’s Drew Dilkens.
— In a push for tighter bail control, Solicitor General Michael Kerzner and Associate Bail Reform Minister Graham McGregor are asking the federal government to step up with adjustments to the system, including:
Restoring mandatory minimum sentencing for serious crimes
Remove bail availability for offenders charged with murder, terrorism, human trafficking, intimate partner violence, drug trafficking, criminal possession or use of restricted or prohibited firearms and robbery
Mandate a three-strike rule requiring pre-trial detention for repeat offenders
Bring back restrictions on who can get conditional sentences for serious crimes
Require ankle monitors as a condition of bail for serious crimes
Remove credits that can be applied to sentences for time an accused spends in jail before trial for repeat and violent offenders
Federal minister Arif Virani accused McGregor of “political gamesmanship.” “These proposals are divorced from any evidence that they reduce crime — or that they even meet Charter standards,” he said. “The system will only work as intended when Ontario steps up.”
“We met in person in Yellowknife two weeks ago,” McGregor replied. “Have you already forgotten about it? I hope not, because Ontario wasn’t the only jurisdiction there who demanded meaningful bail reform.”
— Elections Ontario is on the search for help to “source, negotiate and secure leases for office spaces across Ontario.” According to a new request for proposal, they’ll need 124 “returning offices” and 124 “training and logistics offices” in each district.
“Part of our mandate is to always be prepared to deliver fair and efficient elections whenever they are called,” a spokesperson told us over the summer.
Nine days remain to make a bid.
WHAT WE'RE READING
— While the Ford government’s rebate cheques are ”politically sexier,” experts warn Jessica Smith Cross they’ll leave out some who need them most.
— Martin Regg Cohn says they’re a cynical attempt to buy your votes.
— It’s not what a leader would do, Matt Gurney argued.
— But Brian Lilley says the government is bringing in cash faster than they can spend it.
— The London Health Sciences Centre is under police investigation for fraud. In late September, the entire board quit en masse, facing flak over spending.
— Will Tory candidates be allowed to speak in the next election, whenever it is? Premier Ford won’t say.
— Speaking of access, some parties are fuming over being shut out of early access to the province’s budgets and economic updates.
— Costco has been OK’d to sell alcohol in Ontario, among at least 412 new licenses issued by the Alcohol and Gaming Commission of Ontario.
— With the Ford government sketching out a vision to revitalize Niagara, Marineland’s site could be in the mix for a new amusement park.
— Seneca Polytechnic is closing the Markham campus over a sharp drop in the number of international students.
— A new survey found that more people are saying no to buying and yes to renting.
— Despite the price, FIFA is touting the upcoming World Cup’s “profound” impact on Toronto. Ben Spurr sat down with Peter Montopoli, the tournament’s boss.
— Some grocers feel “hoodwinked” by a requirement to accept empties.
IN THE LOBBY
Here’s this week’s list of new, renewed and amended lobbyist registrations:
Aidan Grove-White (StrategyCorp Inc.): Northbridge Capital Inc.
Alexander Glista (StrategyCorp Inc.): Northbridge Capital Inc.
Alexandra Hoene (Loyalist Public Affairs): Hydro Ottawa Holding Inc.
Alexandra Spence (Loyalist Public Affairs): Hydro Ottawa Holding Inc.
Andrew Pask (AP Public Affairs Inc.): MicroShelters
Carolyn Clubine (Clubine Consulting): Indus Community Services
Chris Benedetti (Sussex Strategy Group): Evolugen
Chrishane Dilkumar (NATIONAL Public Relations): Ferring Pharmaceuticals Canada
Cyrus Reporter (Gowling WLG): Opta Group LLC
Faria Amin (Sussex Strategy Group): Wyloo Ring of Fire Ltd. (formerly known as Ring of Fire Metals Pty. Ltd)
Fraser Macdonald (StrategyCorp Inc.): Northbridge Capital Inc.
Giancarlo Drennan (Sussex Strategy Group): Clearway Construction Group
Gregory Seniuk (Grande-Ourse Consulting Inc./ Ursa Consulting Inc.): Canadian Fire Alarm Association
Jackson Bovey (Navigator Ltd.): Alliance for Healthier Communities
Joyce Mankarios (Sussex Strategy Group): Strides Toronto, Twig Fertility
Kelsey Meyer (Clear Strategy): Restaurants Canada
Laurel Brazill (Wellington Advocacy): Portage Ontario
Mackenzie Taylor (Sussex Strategy): IAMGOLD Corporation, Royalpark Homes
Martin Rust (Martin Rust Strategic Advisory Services): Lenovo Canada Inc.
Michael McLean (McLean Canadian Consulting Inc.): CSL Behring Canada Inc.
Robyn Gray (Sussex Strategy Group): Association of Major Power Consumers of Ontario (AMPCO)
Brian Tropea: Ontario Harness Horse Association
Daniel Kelly: Canadian Federation of Independent Business
Darryl White: BMO Financial Group
Deb Pimentel: IBM Canada Ltd.
Krista Scaldwell: Canadian Beverage Association
Lisa Baiton: Canadian Association of Petroleum Producers
Mark Pillow: Goodyear Canada Inc.
Richard Kruger: Suncor Energy
Walid Abou-Hamde: Ontario Road Builders’ Association
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