PAUL KAIHLA August 26 1991



PAUL KAIHLA August 26 1991




One of the first stops for New Democratic Party Leader Bob Rae during last summer’s Ontario election campaign was Toronto’s east end, an area that he represented as a federal MP between 1978 and 1982. It was clear then that the NDP’s commitment to generous social programs was not what attracted many of the bustling, predominantly Greek neighborhood’s small-shopkeepers to Rae. When the campaigner entered Bill Mosios’ dry-cleaning shop, the Greek immigrant told Rae that the government should crack down on welfare cheats. But Mosios and many of his neighbors did appear to believe that an NDP government would strive to help working people—not the rich. And on Sept. 6,1990, the riding sent an NDP member to the legislature. But now, with the approach of the first anniversary of Rae’s stunning election as Ontario’s first NDP premier, the eastend merchants say that they are still waiting for results. Said jewelry-store owner Nicholas Nanos: “If he doesn’t do more, he’s not going to be around after the next election.”

That election, however, is not required by law until 1995. In the meantime, Rae’s most senior aides acknowledge that they are advancing cautiously with their party’s reformist ambitions. Said Ross McClellan, Rae’s chief policy adviser: “We are trying to slow the policy process down so we get things right—so that when something is unveiled, it doesn’t go off like a grenade in our hands.” McClellan himself is a survivor of several significant explosions during the government’s educational first

year. Some ignited over the behavior of inexperienced cabinet ministers. Others were set off by policy decisions—or merely proposals. Issues such as the party’s first provincial budget, forecasting a record $9.7-billion deficit, and the government’s consideration of reforms designed to dramatically strengthen the hand of unions during contract disputes, sparked angry protests from business (page 20).

Meanwhile, such traditional sources of NDP support as the labor movement and social agencies have criticized the slow pace of change. And through it all, the NDP’s support slid from 38 per cent of the popular vote in the election to just 26 per cent in a Gallup Canada Inc. survey published on July 23—far behind the still-leaderless provincial Liberals, with the support of 43 per cent of Gallup respondents.

The Rae government’s performance has significance for Canadians beyond Ontario. In British Columbia and Saskatchewan, where right-leaning governments face strong NDP challenges in elections that must be held this year, strategists for both the ruling B.C. Social Credit party and Regina’s Conservatives say that they will use the Ontario NDP’s economic record against Rae’s counterparts in their own provinces. Said Jesse Ketchum, director of operations for the B.C. Social Credit party: “The Socred election campaign will take advantage of the fact that Bob Rae’s Ontario government is a contemporary reminder of the effects of socialist policies.” At the same time, Rae has made clear that he intends to play a more assertive role in future constitutional negotiations than some previous Ontario premiers did (page 19).

Strides: But so far, Rae’s government has been more moderate in power than some of its more alarmist critics expected. Even so, it has made some strides towards its avowed goal of greater social justice. In one significant gesture earlier this month, Rae and provincial Native Affairs Minister Charles (Bud) Wildman signed a letter of agreement with 12 representatives of Ontario’s 175,000 native residents, acknowledging that they possess an inherent right to self-government. The declaration was the first of its kind by any government in Canada, and last week federal Constitutional Affairs Minister Joe Clark supported the Ontario position on the issue after a meeting with Rae. At the same time, other cherished NDP policies have been delayed, withdrawn or dramatically scaled down. Rae and his ministers have blamed some of the delays on the recession, which cut into the government’s financial resources. Another factor has been poor relations with Ontario’s civil service. Said one senior New Democrat, who requested anonymity: “There is a lot of dead wood at the top level of the bureaucracy. On the other side of the coin, many New Democrats went into government incredibly suspicious of the civil service and didn’t place appropriate faith in it.” Whatever the cause, proposals for a minimum corporate tax and an environmental bill of rights are mired in studies and reviews. And Rae, after campaigning last year on a pledge to scrap the no-fault automobile insurance system that the Liberal government introduced just three months before the 1990 election, now appears ready to retain many of the same principles in reforms that his own government plans to introduce later this year.

Jobs: But it is on economic policy that the NDP Ontario government remains most vulnerable. Its left-wing program sets it clearly apart from most other governments in Canada— indeed, from most Western countries. And Prime Minister Brian Mulroney, for one, denounced the NDP’S expansionist April budget for undermining the federal government’s attempts to reduce its own spending. Those attacks, however, have not deterred Ontario Treasurer Floyd Laughren. He vigorously defends the Ontario deficit, claiming that $8.2 billion of the total is spending on existing programs—most of them launched by earlier Liberal and Conservative governments—during a recession-induced downturn in tax revenues. Laughren adds that $1.5 billion in new spending has saved or created 70,000 jobs in the face of a 10.2-per-cent provincial unemployment rate—the highest since the 1930s.

Clearly, the nationwide recession struck Ontario’s economy with particular force during the NDP’S first year in office. Among other consequences, about two-thirds of the 168,000 manufacturing jobs that the province has lost during the recession are the result of permanent plant closures. That was the case with only 24 per cent of layoffs during the 1982 recession. Said Rae in an interview with Maclean ’s: “The extent of the structural changes in the economy are much deeper than people were prepared to admit.”

Deal: And in fact, some analysts have applauded the NDP’S decision to confront the recession by infusing the provincial economy with public spending. Said James Frank, chief economist and vice-president of the Conference Board of Canada, a nonprofit economic research organization: “If Ontario had held its deficit down to $3 billion, you would have had a longer and deeper recession, not just in Ontario, but in the rest of the country, too.”

But there is an ideological dimension to the party’s economic program, as well. For one thing, the government has quietly but determinedly encouraged employees to buy out troubled factories. Last week, Laughren released draft legislation that, if passed, would grant provincial tax credits to workers who take over the company that employs them. At the same time, in a deal negotiated personally by Rae, the government reached an agreement to transfer ownership of a pulp-and-paper mill near the Northern Ontario town of Kapuskasing to 1,450 millworkers and Tembec Inc., a Montreal-based pulp-and-paper company. The American owners, Dallas-based KimberlyClark and the New York Times Inc., had planned to reduce the money-losing mill’s workforce by about 80 per cent.


Ban: Other aspects of the NDP’S tilt towards labor have fuelled antagonism among business leaders. The most contentious battle is over proposed changes to the province’s labor code. Earlier this year, Labor Minister Robert Mackenzie, a former organizer for the United Steelworkers of America, invited a panel of business and union representatives to recommend reforms to the code. After months of disagreement, the two sides submitted separate reports—and media accounts claimed that Mackenzie planned to adopt the unions’ proposals almost intact. Among the more farreaching was a provision to ban management

from filling the positions of striking workers, a step that would effectively shut companies down during labor disputes.

After fierce attacks from pro-business groups, however, the initiatives may now be shelved. In an interview with Maclean’s, Rae made it clear that his government is distancing itself from Mackenzie’s program—and in particular, the proposal to prevent managers from filling in for striking employees. Acknowledging that the measure would set Ontario too far apart from neighboring provinces and states, Rae declared: “That is not a proposal of this government.”

But indiscretions by ministers, as much as left-wing economic policies, have kept the premier on the defensive. In March, Rae fired Peter Kormos, who held both the financial institutions and consumer and commercial relations portfolios. His reason: the iconoclastic 38-year-old minister had appeared, fully clothed, as a “Sunshine Boy” in The Toronto Sun tabloid newspaper—just one day after announcing a crackdown on sexism in advertising. Rae said that he fired Kormos for “poor judgment.” But some bureaucrats say privately that the minister was dropped because he

was at odds with officials in the premier’s office over the shape of the proposed auto insurance plan. A month later, Rae lost another minister. Health Minister Evelyn Gigantes resigned after she inadvertently breeched Ontario’s Privacy Act by disclosing in the legislature the name of a drug-rehabilitation patient. Gigantes, widely considered to be a strong and able politician, returned to cabinet as housing minister in a minor shuffle last month.

Grilled: Meanwhile, opposition members have unsuccessfully demanded the resignations of several other ministers. Among them is Community and Social Services Minister Zanana Akande, who survived an investigation in April by the provincial conflict-of-interest commissioner into her failure to properly disclose directorships in two small companies. The same month, the opposition grilled Solicitor General Michael Faman after staff members wrote and signed the minister’s name to letters to justices of the peace asking them to review a constituent’s parking tickets. Then, in June, Women’s Issues Minister Anne Swarbrick and Northern Development Minister Shelley Martel offered their resignations after writing to the College of Physicians and Surgeons asking for a suspension of the licence of a doctor convicted of sexually assaulting female patients. After initially accepting Swarbrick’s resignation and reserving judgment on Martel’s, Rae kept both in his cabinet. In opposition, Rae regularly demanded the resignations of ministers whose performance or behavior broke the rules. But one senior strategist noted that Rae considered firing Faman in the midst of the letters scandal and stayed his hand only because he wanted to avoid accepting three cabinet resignations in the government’s first seven months. Said the strategist: “It would have been bad timing. But if Kormos and Gigantes hadn’t happened, Mike would have been gone.” Rae eventually dropped Faman in last month’s shuffle.

Scrap: But it is the auto insurance issue that is likely to provide one of Rae’s more intractable problems in the coming months. In last year’s campaign, the party promised to scrap the no-fault auto insurance plan that the Liberal government of David Peterson introduced in June, 1990—with the support of the insurance industry. That system, similar to one in Quebec, removed the right of accident victims to sue for suffering or injuries except in cases of permanent disability. Instead, insurers pay compensation of up to $600 a week for lost work time. In a campaign speech at a union hall in Oshawa last August, Rae declared that the real goal of the Liberal reforms was to save the insurance industry $500 million a year in legal claims and lawyers’ fees. Noting that several insurance companies had made large campaign contributions to the Liberals, Rae declared: “The Liber-

als were bought.” And his campaign platform promised to reinstate accident victims’ right to sue.

In fact, Maclean ’s has learned that is unlikely to happen when the government unveils its own reforms in the fall. According to an insurance consultant who is familiar with the govern-

ment’s planning, the NDP changed direction after the New York City-based actuarial firm William Mercer completed a report for the province that showed that insurance premiums would increase by 15 to 25 per cent if the government restored victims’ right to sue. Said the consultant: “They are not that stupid to introduce a new insurance plan which increases premiums in the middle of a recession.” Added Gordon Floyd, president of Public Affairs Management Inc., a consulting firm that specializes in Ontario government affairs: “At this stage, I think it will be a no-fault system for accidents involving personal injuries.”

Agenda: But over the next year, a pressing national agenda is likely to take much of the Ontario public’s attention away from domestic issues, Indeed, the campaign to reform the Canadian federation may well prove to be Rae’s biggest challenge. And unlike his predecessor, Rae seems ready to abandon Ontario’s traditional role of conciliator in constitutional discus-

sions. Said one of his senior constitutional advisers: “This province is not just going to be a consensus-builder among the others, as it has been in the past. The strategy is to have quite clearly enunciated Ontario priorities.” The province will release a discussion paper on some of those priorities in the fall. But many are already clear: a reaffirmation of the Charter of Rights and Freedoms; the creation of a social charter that enshrines national standards in such areas as health care, education, social assistance and environmental protection; and the recognition of an economic union of the provinces—possibly including a commitment to eliminate interprovincial trade barriers.

Rights: Those priorities may be shared with several other provinces. But Ontario’s NDP government already stands apart in its emphasis on constitutional protection for aboriginal rights—including the contentious and ill-defined principle of native self-government. Rae, who was once arrested while joining a demonstration with members of a Northern Ontario Indian band, says that self-government is critical to the success of the new round of constitution-making. But other provinces are unlikely to go as far as Ontario. Public opinion in Quebec, in particular, is less sympathetic to native concerns, especially after last year’s armed standoff at Oka and native Manitoba MLA Elijah Harper’s role in derailing the Meech Lake accord. Said one Rae adviser: “No one is under the illusion that the rest of the provinces are going to say, ‘That’s great.’ ”

Despite their setbacks, after almost a year in office Rae and his government seem to feel politically secure. For one thing, they hold 73 of the legislature’s 130 seats; the Liberals have 35, the Conservatives 20, and there is one Independent, as well as one vacancy. Four years remain in their party’s mandate—plenty

of time to advance more of their reform agenda into legislation. But clearly, the New Democrats’ determination to transform provincial policies in Ontario is tempered by their desire to avoid being ejected by voters after a single term. Noted McClellan: “This is the opportunity of a lifetime to establish the New Democratic Party as a governing party and end the marginal status it had in Ontario before 1990.”

To that end, Rae and his team may perform well on the constitutional front, but the score that is likely to count most with voters in Toronto’s Greek neighborhood and elsewhere will be the one that the NDP chalks up on the provincial economy. And by that measure, the party’s game is far from won.