Mitch Wolfe: The Playful Contrarian

The minute Christine Elliott, the Ontario PC member from Whitby-Oshawa, formally launched her bid to succeed Tim Hudak as leader of the party on Wednesday, she became the clear front-runner.

If she wins, she’ll dramatically change politics at Queen’s Park. Specifically, she’ll change how the Progressive Conservatives are treated and viewed by the Ontario media and opposition parties.

Under Hudak, the Ontario PC party was viewed as a hard-right, fiscally-conservative bunch, rural-based and dominated by angry old white guys short on compassion — sexist and unfriendly to women, mothers, children and immigrants.

During the recent provincial election campaign, Hudak and his party were vilified for calling for the dismissal of 100,000 public servants. Liberal Premier Wynne whipped up enough fear to motivate her base to come out and vote; she also scared NDP supporters into voting Liberal in order to stop Hudak from being elected.

That was then. Things have changed. When word spread this week that Christine Elliott was about to announce her leadership bid, many media commentators rather dismissively referred to Ms. Elliott as the “widow of Jim Flaherty”.

Then an interesting thing happened. Many male and female commentators leapt to Elliott’s defence and attacked the media for being implicitly sexist by describing her as an extension of the late federal finance minister’s own political career — ignoring her many achievements as a lawyer, entrepreneur, politician and advocate for children and adults with disabilities.

How many times has that ever happened to an Ontario PC member during the Harris, Eves, Tory and Hudak years? Try never.

With Elliott leading the Tories, both Wynne and Horwath would have a hard time painting the party as a scary coven of ‘slash and burn’ Harrisites.

In the past, the media tended to run photos of Tim Hudak scowling or grinning like a frat boy at a kegger. Compare those to the photo of Elliott in the Globe and Mail on Thursday just prior to her leadership announcement. She looks calm, confident and self-assured, her sights firmly set on her opponents — Wynne and Ontario NDP Leader Andrea Horwath.

In the speech launching her campaign, Elliott deftly broke from Hudak’s legacy by suggesting that, under her leadership, the Progressive Conservative party would not view fiscal policy as an end in itself, and that “good economic policy enables good social policy.”

“Fiscal responsibility and social compassion can and, in fact, must go hand in hand,” she said. “These are the values that I’ve always carried with me.”

Unlike Hudak or his predecessors, Elliott talks the talk and walks the walk. Her fiscal conservatism credentials are sterling. But she is also known for her many years of sincere, hard work with developmentally disabled children and adults. One of her sons is developmentally challenged.

Elliott was one of the founders and driving forces behind the Abilities Centre in Whitby — a large, modern and inclusive sports and recreational facility that works with the developmentally challenged and incorporates them in the whole community.

Since her election in 2006, Elliott has served as her party’s health critic, heavily involved in developing the party’s social policy. She set up and served on legislative committees dealing with people with developmental disabilities. She is known as collegial and hard-working, and is well-liked and respected by members of all parties.

With Elliott leading the Tories, both Wynne and Horwath would have a hard time painting the party as a scary coven of “slash and burn” Harrisites. She offers the Tories a fighting chance at grabbing the Holy Grail of conservatism: combining prudent economic policy with legitimate and compassionate social policies, and competing for the middle — where most Ontario voters live.

If she wins the leadership, she’ll be in a position to kick the board over and rewrite the rules of Ontario politics. This is a candidate who can present the Progressive Conservatives as a more open, moderate and compassionate party, one able to appeal to women, independents, urbanites, suburbanites and soft Liberal and NDP supporters.

In other words, for Wynne and Horwath, Christine Elliott would be a lot scarier than Tim Hudak.

I have been actively involved in Ontario provincial politics for over forty years. Way back, well before robocalls and online polling, I cut my teeth as a political organizer for Red Tories Roy McMurtry and Larry Grossman in the ‘70s and ‘80s.

So I have few pieces of unsolicited advice for today’s Ontario PC Party.

Commenting on politics — especially so soon after a defeat, when emotions are still so raw — is like walking into a minefield. But here goes:

In essence, my advice is that the Ontario Tories should consider going back in time, figuratively speaking, to the party’s golden era — of “Brampton Bill” Davis and his “Big Blue Machine”. Pick and choose the successful and effective elements of the Davis government and try to modernize them, adapt them and apply them to today’s Ontario.

Davis was Ontario’s premier from 1971 to 1985 — one of Canada’s best premiers. He was a politically moderate conservative from the rapidly growing city of Brampton, who led and oversaw an ideologically diverse and inclusive cabinet that brought together Red Tories like McMurty and Grossman, centrists like Dr. Bette Stephenson and Dennis Timbrell, and right-wingers like Frank Miller.

In those days, the Tories were known as an urban/suburban party, with some rural roots, while the Liberal party was primarily rural-based. How times have changed.

The Davis government believed that government could be a force for good in certain circumstances — not necessarily all circumstances. Davis was known as the education premier. He believed every Ontario family should have access to quality educational opportunities, not just the wealthy. His government built new universities (Trent and Brock), and 22 community colleges.

Davis was pro-business. He believed in free markets. But he was not an ideological laissez-faire capitalist. When Ontario landlords were gouging defenseless apartment tenants, the Davis government intervened in the private real estate market and imposed rent controls.

Davis also had the sense to know when his government’s actions risked going too far. He overruled his own transit experts when he personally stopped plans to build the Spadina Expressway through some downtown communities — in response to a populist, community-based revolt led by urban icon Jane Jacobs.

Davis ran a government that couldn’t be pigeonholed. He was an idealist, a populist and a pragmatist. He believed that politics was a high calling, that the essence of politics was people and what people need.

The party can’t support another Harris clone. Nor can it elect as its leader another Red Tory-John Tory type — someone progressive, but lacking the necessary populist appeal and instincts.

His speeches to local community groups were part sermon, part stand-up comedy routine and part Rotarian meeting, calling the assembled to community action. He seemed to enjoy every part of politics — especially the kibitzing, sharing stories and listening to people tell him about their interests, joys and their sorrows.

Davis truly was a ‘Happy Warrior’. He respected the Ontario people. He believed they were always right.

Recall that though Ontario was suffering from stagflation in the 70s (as was most of Canada) and rising health costs, Davis resisted the call for government austerity by standing up to some of his own cabinet ministers and refusing to permit the closing of local hospitals.

In Davis’s day, the PC party wasn’t dismissed as a party of angry old white guys from the rural heartland. It was able to attract and appeal to a diverse group of men and women representing the many ethnic and religious urban communities of Ontario.

That is the Ontario PC party’s history and its DNA. It worked back then. It could work now. But first, the party has to take a clear-eyed and critical look at why it lost in 2014.

The party can’t support another Harris clone. Nor can it elect as its leader another Red Tory-John Tory type — someone progressive, but lacking the necessary populist appeal and instincts.

The party should look for female candidates to replace Tim Hudak — someone who was not part of the Harris cabinet. Such a leader would immunize the Tories from the inevitable Liberal attack ads trying to paint her as another slash-and-burn Harrisite.

A woman leader — fiscally prudent and conservative, but also likeable, moderate, trustworthy and empathetic — might be just be the ticket for the Tories’ return to power. Together with a suite of policies that are upbeat, positive and aimed at spurring growth, such leadership could connect the party to a much broader base: soccer moms, hockey moms, Tim Horton parents, union folk and Ontario’s many hard-working, diverse and multicultural communities.

The Ontario PC Party does not have to rebuild itself. It already has a solid foundation. It just needs to go back to its roots.

Right now — according to the Ontario Financing Authority and the Liberals’ latest budget — the Province of Ontario owes $295.8 billion in debt. That’s $282.9 billion in debt to the general public and institutions and $12.9 billion in non-public debt to public sector pension funds and the Canada Pension Plan Investment Board (CPPIB).

That debt figure is pretty enormous on its own — but what if the government is lowballing it? In fact, Ontario’s debt level may be higher by billions of dollars. Here’s why:

Infrastructure Ontario (IO) is an Ontario Crown corporation which oversees the development, construction and upgrading of public institutional buildings in Ontario, such as hospitals, universities and courthouses.

According to its website, since 2006 IO has brought about $42 billion in capital projects to market. Such projects include the North Bay Regional Healthcare Centre, Sunnybrook Health Science Centre, the Roy McMurtry Youth Centre and the Durham Consolidated Courthouse.

That $42 billion has — in practice and in fact — become Ontario’s financial responsibility and, as a result, should be treated as part of Ontario’s total debt.

Under IO’s Alternate Finance and Procurement Program (AFP) — popularly known as the public/private project (P3) program — the Liberal government under Dalton McGuinty and now Kathleen Wynne set out to build hospitals, universities and courthouses by shifting the risks of construction and financing from government to the private sector.

Prior to the McGuinty/Wynne governments, Ontario would go to the public bond and institutional markets and borrow at very low interest rates to finance capital projects. These borrowed funds would be added to the province’s debt. The government would retain third parties to build the public buildings and Ontario would retain ownership and operate the buildings.

Typically, Infrastructure Ontario, through public tender, selects a single-purpose shell company made up of finance, design, construction and operational partners. This shell company then goes out to public/private bond and institutional markets and raises financing for construction on the basis that, once the building is completed and operational, the Ontario government would issue grants to the institution to pay interest on the 30 to 35-year bonds.

Because these public/private projects have the support and authorization of the Ontario government, these shell companies are able to obtain financing without putting any skin in the game — that is, their own cash equity — and without providing corporate guarantees. Because the Ontario government is neither the direct borrower nor the guarantor of the bond, these bonds are not included in Ontario’s overall government debt. Pretty clever.

In actual fact and practice, however, the Ontario government is financially still in control of, and responsible for, these public buildings; it’s still on the hook for ongoing interest payments on the bonds and, ultimately, repayment of the bonds and of any defaults.

Whether a hospital is owned by the Ontario government or by a shell company, the interest payments on the bonds come from the same source: government revenues, collected as personal and corporate taxes. And in the event of a default, the responsibility falls to the Ontario government to take over the facility or refinance the bond — because no Ontario government would permit a bondholder to take over a public hospital, university, school or courthouse due to a default. Recall the examples of the Ornge ambulance service and the cancelled Mississauga gas plant.

Chris Mazza, when he was CEO of Ornge, set up separate private companies and went to markets to borrow about $250 million to buy helicopters and aircraft, and another $25 million to buy a new Mississauga head office building. When Mazza and his executives were terminated for cause, the Liberal government took over the payment of both loans — in order to maintain the ambulance service and Ontario’s reputation in capital and bond markets, and notwithstanding the fact that the province of Ontario was neither the borrower nor the guarantor of the loans.

Similarly, though the Ontario government was not a party to the construction loan agreement between the Mississauga gas plant developer and its American lender, the Liberal government agreed to pay the American lender well in excess of what it was owed as a result of the cancellation.

Recently, the Ontario government agreed to look into purchasing a 70-per-cent-vacant MaRS II building — purportedly to protect MaRS’ work on behalf of Ontario — notwithstanding the fact that IO was the actual construction lender.

The Ontario Auditor General is already reviewing IO loans and the suspicious MaRS II bailout. For the sake of accurate and honest government fiscal reporting, the auditor should also review the whole $42 billion AFP program with a view to properly bringing those obligations back on the books as government debt, as the AG did with $800 million in Catholic School Board debt in 2009.

If Ontario’s true debt picture is closer to $350 billion than $300 billion, then we’re that much closer to hitting the fiscal wall — and appropriate action should be taken sooner, not later.