Livio Di Matteo is Professor of Economics at Lakehead University in Thunder Bay, Ontario. Visit his new Economics Blog “Northern Economist” at http://ldimatte.shawwebspace.ca/
The time has comes to take stock of the implications for the North of the potential outcomes of the October 6th provincial election. According to the polls, it is a close race and the possibility of a minority government is high. At the same time, polls do not always fully predict the outcome and much depends on the concentration of party support across the various ridings, as well as the actual voter turnout. What can we expect the morning after?
Whatever party forms the government, expect to see the donning of sackcloth and ashes as it suddenly becomes apparent that the economy is on the verge of recession, the stock markets have dropped 20 percent and the province’s coffers are bare as a result of a massive deficit. All those rosy revenue forecasts that were going to see the budget balanced by 2017 will now go out the window. Expect to see announcements of government expenditure cuts, freezes and restructuring as well as the discussion of temporary “revenue enhancements.” A Liberal or NDP backed government will likely favor revenue enhancements over expenditure cuts while a Conservative government is more likely to favor cuts or restructuring.
Should the Liberals win another majority, it will be interpreted as a vindication for their program of policies, especially their job creation strategy focused on Green Energy. As for the North, it means the Far North Act will stay in place. For the North, a Liberal majority win will put it in an odd situation.