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What Doug Ford’s New Cabinet Faces: Inflation, Housing Crisis, Union Negotiations


Ontario Premier Doug Ford will unveil his new cabinet on Friday morning in glorious sunshine outside Queen’s Park.

But after that, stormy economic and political times loom for Ford’s second-term government.

Ontario is facing the highest rate of inflation in nearly 40 years, an economic reality that will have a strong influence on everything from the amount of tax revenue the government brings in to the level of pressure exerted by public sector unions for higher salary increases.

The new cabinet also faces a housing affordability crisis that has spread to every corner of the province, an overburdened health care system weakened by more than two years of battling the COVID-19 pandemic. and a long list of promises to keep.

Ford and his newly appointed ministers are due to be sworn in at 11:15 a.m. in an outdoor ceremony outside the Legislature.

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, front row center, 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 rapidly rising cost of living is a far-reaching economic problem that no provincial government can expect to solve, but it is one that is likely to have a profound effect on much of what does the Ontario government.

Progressive Conservative measures to make life more affordable have so far focused primarily on driving accessibility: waiving Ontario’s $120 vehicle registration fee, waiving tolls on provincial highways and a promise to reduce the gas tax by 5.7 cents per liter for six months. , starting July 1.

Inflation will help government coffers in many ways: when consumer goods cost more, sales tax revenue increases. Inflation does not appear to have hurt corporate profits so far, so the province can also expect its corporate tax revenues to rise accordingly.

Of course, inflation also makes it more expensive for the government to buy and build things, so expect to see prices for major government construction projects exceed their budgets.

What Doug Ford’s New Cabinet Faces: Inflation, Housing Crisis, Union Negotiations
The cost of living in Canada rose at its fastest pace in nearly 40 years in the year to May, Statistics Canada reported this week. The annual inflation rate is 7.7%. (Robert Krbavac/CBC)

But the government’s biggest inflationary concern will be what it does with public sector wages. Salaries make up about half of the province’s annual operating budget.

2. Negotiations on public sector contracts

Whether it’s teachers, nurses, electrical workers, police officers, road maintenance crews or Service Ontario employees, they’re all seeing inflation gnaw away their net salary. This will inevitably lead to public sector unions demanding higher wages each time their next round of bargaining begins, the argument being that any annual wage increase below the rate of inflation amounts to a pay cut.

An annual inflation rate of 7.7% sets the bar for wage increases much higher than what the public sector has seen in decades.

Add to that the fact that the Ford government capped annual public sector wage increases at 1% through its Bill 124 at a time when private sector wage increases were higher, and you have a significant pent-up demand for wage catch-up.

All this sets the stage for difficult negotiations, starting with the education workers. Remember, Ontario was seeing schools closed across the province by teacher strikes just weeks before schools closed due to COVID-19.

What Doug Ford’s New Cabinet Faces: Inflation, Housing Crisis, Union Negotiations
Unionized public sector workers in Ontario whose wages are paid by the provincial government have been subject to a 1% cap on annual wage increases since the Ford government introduced Bill 124. (Esteban Cuevas/CBC)

One of the stumbling blocks in those 2020 talks: the government was offering teachers 1% pay rises, and the unions wanted increases at the rate of inflation. At the time, inflation was hovering around 2%.

It will be especially interesting to see how contract negotiations with healthcare workers are handled, given all the praise Ford has showered on them during the pandemic. They will naturally want the government to put its money where it says it will.

3. Health system

Ford’s new health minister will replace Christine Elliott following her decision to quit politics.

Elliott’s successor will inherit responsibility for a $68 billion system that is struggling to cope with staffing shortages, record emergency room wait times and a huge surgical backlog, even whether there is currently a lull in COVID-19 cases in hospitals across the province.

The Minister of Health will most immediately have to address the shortage of human resources in health care and ensure that the system is ready for any new variants of COVID-19 that may emerge in the fall. The new minister will also want to go further in the reforms of the health system that the government began before the pandemic and designed to tackle the root causes of the problem of hallway medicine.

Sources close to the government have previously told CBC News that former solicitor general Sylvia Jones is the favorite candidate for health minister, with Prabmeet Sarkaria, the former head of the Treasury Board, also under consideration.

What Doug Ford’s New Cabinet Faces: Inflation, Housing Crisis, Union Negotiations
Sylvia Jones served in Cabinet as Solicitor General for the Ford government during the COVID-19 pandemic and was the minister responsible for overseeing the deployment of vaccines in Ontario. She is a possible successor to Christine Elliott as Minister of Health. (Cole Burston/The Canadian Press)

The latest iteration of the Ford cabinet included an associate minister focused on mental health. Watch to see if this post remains in place as a signal that the issue remains a government priority.

4. Housing affordability

Soaring home purchase prices have eased slightly in recent months, since the Bank of Canada raised interest rates in an attempt to curb inflation.

Still, the average sale price of a home in Ontario in May was 8.7 per cent higher than it was in May 2021, according to the Canadian Real Estate Association.

The government promises to pave the way for building 1.5 million new homes in Ontario over the next decade, a target set by the province’s housing affordability task force. But the government hasn’t exactly adopted much of the rest of the task force’s recommendations, such as its call for greater density in single-family neighborhoods.

What Doug Ford’s New Cabinet Faces: Inflation, Housing Crisis, Union Negotiations
A housing affordability task force appointed by the Ford government has recommended that the province require municipalities to increase density in neighborhoods currently zoned for single-family homes. (Ed Middleton/CBC)

The housing action plan the Ford government unveiled this spring is largely focused on speeding up municipal approvals for development projects, and industry watchers wonder if it will go far enough to increase the supply of housing at a level that is beginning to slow down in prices.

Housing is running for its own associate minister in Friday’s new cabinet, a move that would recognize the importance of the issue and offer an extra boost to the Minister of Municipal Affairs and Housing.

5. Keep promises

Ford won re-election on the simple slogan “Get It Done” and the mantra of being the party that says “Yes”. The long list of things Ford said “yes” to provides a handy dashboard to mark the government over the months and years to come.

A few of the promises to watch out for:


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