Wynne to Face Tough Economic Challenge as Ontario Premier

Kathleen Wynne, selected as the first female and openly gay premier of Ontario, said education and balancing the budget are among her priorities as head of Canada’s most-populous province.

Wynne, 59, was elected by ruling Liberal Party members to replace Dalton McGuinty as the province’s leader at a weekend convention in Toronto, beating out five other candidates.

She steps into her role after nearly a decade in provincial politics with the promise of working with opposition lawmakers to bypass what she’s called a “poison” within the region’s politics. Wynne leads a minority government that needs the support of opposition lawmakers to pass legislation.

“The rancor and the viciousness of the legislature can’t continue,” Wynne told reporters yesterday in Toronto. “We absolutely have to continue to work out our disagreements.”

Wynne succeeds McGuinty, who announced Oct. 15 he would step down after his government was accused of hiding costs related to the cancellation of two power-plant projects, and he was unable to persuade opposition lawmakers to support a public sector wage freeze to curb the province’s deficit.

While she calls her distinction as the first openly gay premier of a Canadian province “historic,” she won’t focus on it during her term.

“I’m not a gay activist, that’s not how I got into politics,” she said. “I’m not going to spend the next months talking about this.” More important is the fact that women now lead six Canadian provinces and territories, she said.

Wynne’s victory puts women in charge of provincial and territorial governments overseeing about 90 percent of Canada’s economy and population.

Quebec Premier

In Quebec, the French-speaking region with about 24 percent of the population, Pauline Marois, 63, of the Parti Quebecois party took power in the Sept. 4 election. In Alberta, the Western province that’s home to the country’s booming oil industry, Conservative Alison Redford, 47, became leader in October 2011 and won an election six months later. And in British Columbia, Liberal Christy Clark, 47, took over from Gordon Campbell as premier in 2011.

Conservative Kathy Dunderdale has been premier of Newfoundland and Labrador since 2010, and Eva Aariak is premier of Canada’s northern territory of Nunavut.

Trailing Opposition

The Liberals hold 53 of the 107 seats in the provincial legislature, meaning they need some support from opposition lawmakers to pass budgets and remain in power. The Progressive Conservatives, led by Tim Hudak, have 36 seats and the New Democratic Party, led by Andrea Horwath, has 18.

“Wynne is going to have big problems because she is more closely identified with McGuinty,” Nelson Wiseman, a University of Toronto associate professor of political science, said in an interview.

Ontario’s Liberals trail both the opposition Progressive Conservatives and New Democratic Party in voter support. According to poll-tracking website ThreeHundredEight.com, Liberal support in recent surveys has averaged about 27 percent, putting them seven percentage points behind the Progressive Conservatives and three behind the New Democrats.

“The next provincial election in Ontario will be difficult for the incumbent Liberals,” said Nik Nanos, an Ottawa-based pollster. “The economy remains flat and the Liberals will face a two-front war against the Hudak Conservatives and the Horwath New Democrats.”

‘Best-before Date’

Nanos said that, in addition to challenges from the right and left of the political spectrum, “after three successive election victories it’s quite likely that the Liberals will also be fighting against their own best-before date politically.”

Wynne told reporters that she had spoken with Hudak after her victory and was trying to speak with Horwath. “Many of the issues we face as a province are not issues that are partisan,” she said.

Wynne, a mother of three who lives in Toronto, won the leadership with 1,150 votes in the final ballot, compared with 866 for Sandra Pupatello, 50. Wynne gained support of candidates Gerard Kennedy, 52, and Charles Sousa, 54, who both withdrew from the contest after the second ballot, and Eric Hoskins, 51, who was eliminated after the first round of voting.

“This is going to be a great government,” Wynne said in her victory speech. “We’re going to build on the work that Dalton McGuinty has done over the last nine years.”

Wynne was first elected to Ontario’s provincial parliament in October 2003, representing the Toronto riding of Don Valley West. Wynne was re-elected to her third term in October 2011. She served under McGuinty as minister of education, transportation, municipal affairs and housing, and aboriginal affairs.

School Trustee

Before provincial politics, Wynne was a Toronto school trustee, according to her biography. She has a master’s degree in linguistics from the University of Toronto and a master’s degree in adult education from the Ontario Institute for Studies in Education. She also completed mediation training at Harvard University.

Youth unemployment, social assistance, public sector wages and education are “very high” priorities, Wynne said yesterday in the Toronto press conference. She also said balancing Ontario’s budget will remain a priority.

“She’s got a heck of a challenge ahead of her,” Jeffrey Gandz, professor of strategic leadership at Western University’s Richard Ivey School of Business, said in a telephone interview from London, Ontario. “She has an economy that’s growing very slowly, a massive deficit and rapidly accumulating debt.”

Struggling Economy

Ontario is home to much of Canada’s manufacturing industry, which has struggled in recent years amid a strong Canadian dollar and sluggish demand from the U.S. The province’s unemployment rate was 7.9 percent in December, above the national rate of 7.1 percent.

Ontario has about C$256 billion ($254 billion) of debt outstanding, according to data compiled by Bloomberg. Finance Minister Dwight Duncan said Jan. 22 the province’s deficit in the fiscal year that began in April will be C$11.9 billion, narrowing from the C$14.8 billion he previously forecast. The province plans to return to a balanced budget in 2017.

Moody’s Investors Service downgraded Ontario’s credit rating in April, citing the province’s growing debt burden and slowing economic growth. Since the downgrade, the Ontario government has fought with public workers unions to institute a wage freeze and levied a 2 percent surtax on wage earners of C$500,000 or more.

“The Liberal Party has decided to tack to the center left from the center right,” said Wiseman, who expected Pupatello to win. “The focus will be more on the social policy side, rather than economic policy, which is what it would have been under Pupatello.”

Before it's here, it's on the Bloomberg Terminal.