The madness and method of the Liberals’ election agenda
A cash infusion is not a vision. And a tax break does not a legacy make.

thestar.com
By Martin Regg Cohn
Sept. 15, 2016

Anyone seen Kathleen Wynne’s political vision lately?

This week’s throne speech was supposed to be a legislative reset - and a political preset for the pending election. Much like the premier’s recent cabinet shuffle, which was supposed to inject new blood into a moribund ministry.

But beyond the bauble of a faux HST rebate on hydro bills, where’s the fresh thinking to revitalize an ossified government? What’s Wynne’s legacy?

Ontario’s government is not without an agenda. But it is all over the map.

The Liberals will pour hundreds of millions annually into child care that is overburdened by wait lists - a sensible initiative, but iterative.

They will allocate billions more into infrastructure spending on hospitals, roads and transit - a sound investment, but an echo of what governments have always done.

Try as Wynne might, it’s hard to sell bridge building as a new way to reach out and touch voters. And it’s tough to repackage child care as anything more than long overdue motherhood.

A cash infusion is not a vision. And a tax break does not a legacy make.

Politicians are like journalists - they’re always telling stories. In the eyes of the public, you’re only as good as your latest story.

A throne speech that was supposed to lay out a new legislative agenda has instead reverted to a retelling of old tales, revealing a government at cross-purposes with itself.

Bad enough that the so-called HST rebate on hydro is a political gimmick that has been tried before and found wanting. What makes it truly self-defeating is that it effectively cancels out the price signals on carbon consumption that Wynne is introducing with great fanfare as part of her long delayed cap-and-trade regime.

The 8 per cent rebate on electricity, corresponding to the provincial share of the sales tax, will save the average household $130 a year starting next January. Simultaneously, the new government-imposed price on carbon announced this year will cost consumers $156 a year in additional gasoline and natural gas charges.

It’s about time we placed a price on carbon. But surely we’re past the time when we need electricity subsidies for every ratepayer across the province, dressed up as tax rebates, and paid for by taxpayers themselves.

Beyond the shell game is the inconstancy and inconsistency in this policy.

Inconstancy, because the government initially declined to declare it a permanent rebate, after having just last year phased out the previous temporary 10 per cent hydro giveback (Ontario Clean Energy Benefit). Finance Minister Charles Sousa at first mused about dipping into his budget’s “contingency fund” - a cushion for unforeseen expenditures - to bankroll the rebate, implying that in a bad fiscal year all bets were off. For better or for worse, Sousa clarified the next day that the tax cut would be permanent.

Inconsistency, because the government had already announced big plans to use its cap-and-trade revenues to pay for other “complementary” climate change policies such as transit electrification and energy conservation retrofits. Now, $1 billion a year - roughly the amount allocated for climate change mitigation - will be rebated to electricity users, as York University professor Mark Winfield points out. By effectively neutralizing and cannibalizing cap and trade, it’s a policy reversal akin to reversing polarity.

But there may be political method to this policy madness. The Liberals are beating a hasty tactical retreat to avoid getting beaten up on the campaign trail.

Opposition populism and media repetition propagates the notion of energy poverty: Electricity is unaffordable in Ontario merely because recent increases have exceeded the rate of inflation.

Never mind that the legislature’s independent Financial Accountability Office reported last month that “Ontario home energy costs are . . . lower than in Atlantic Canada and Alberta,” and that affordability isn’t as onerous as one assumes: “The share of after-tax income spent by Ontarians on home energy costs is similar to shares in Quebec and Manitoba (and) significantly less than in Atlantic Canada.”

No matter. The Liberals have concluded that if you can’t beat them on tax cuts, just beat them to it. If the opposition keeps pretending that the solution to high hydro bills is to cut the HST, well then, let’s steal their thunder so that they can no longer jolt us at election time (and also force them to come up with more plausible ways to deliver on their undeliverable promise to magically lower hydro prices).

Yes, there is surely waste in our electricity system, and we are burdened by an oversupply of overpriced renewables at a time of declining consumption. But a more honest (and less ideological) explanation for higher prices is the massive investments made over the past decade to a transmission system in disrepair.

It’s not easy getting it right, and no government of any party has got it quite right yet in Ontario, not in living memory. But this Liberal government, abetted by the opposition, has got it supremely wrong with its hydro rebate - not once, but twice.

Which is why the electioneering agenda in this throne speech reveals a poverty of vision. It’s not transformational, merely transactional.