Wynne’s fiscal plan proves a challenge

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Kathleen Wynne begins her majority mandate facing a momentous challenge: How to implement a massive budget – including billions for transit and a new provincial pension plan – while wrestling down the $12.5-billion deficit.

And despite winning office on a left-leaning platform, the Ontario Premier is determined to prove wrong the critics who charge she cannot hold the line with public-sector unions and control spending.

When the legislature returns early next month, it will pass a budget that effectively spells out a plan for the next 10 years, committing the province to the Ontario Retirement Pension Plan, $29-billion for transportation over a decade and a fiscal plan that envisions controlling spending to erase the deficit in three years.

Then, she will have to spend her entire term ensuring it is implemented.

"The work that we are beginning now is work that's going to go on. Whether it's the setting-up of the retirement pension plan; whether it's transit or whether it's roads and bridges, it takes a long time to build," she said in an interview Wednesday at her Queen's Park office.

"It's a bit of a blueprint for the coming years."

With a majority government and a chastened opposition, she will have some breathing space.

During the campaign, the Progressive Conservatives argued Ms. Wynne had been vague on how she planned to balance the books. The Liberals were also widely perceived to have benefited from an avalanche of attack ads against PC Leader Tim Hudak run by public-sector unions.

But the Premier insists she can get the unions to accept pay freezes without resorting to contracts imposed by legislation.

"Everyone has their eyes wide open. Our plan was very clear: there is no new money for wages and salaries," she said. "But people do know that I support the collective bargaining process. Will they be tough because there is not new money for wages and salaries? Absolutely."

Ms. Wynne's government is also looking to boost its revenues, in part through income-tax hikes on people who make more than $150,000 per year. It has also appointed a panel to find ways of getting money out of government assets, including buildings, land and Crown corporations. Ms. Wynne would not rule anything out, including selling stakes in agencies such as the LCBO and Hydro One to pension funds.

"We want to make sure that we're getting the best revenue stream possible for the people of Ontario," she said. "We have to be open to possibilities."

Conciliatory language aside, Ms. Wynne often ran a negative campaign that charged the PCs' budget-cutting measures would cause a recession and compared the New Democrats' populism to Toronto Mayor Rob Ford's. She also repeatedly criticized Prime Minister Stephen Harper for not wanting to expand public pensions and for axing a program that would have spared Ontario from losing millions in transfer payments.

But on Wednesday, she said such rhetoric is all in the game, and with the election done, she could co-operate with her adversaries.

"As politicians, that's our job. It's a highly competitive process. We go into campaigns to win," she said. "That doesn't mean that there aren't areas that we can work together on."