Since being elected, Doug Ford has plastered "Open For Business" signs throughout Ontario. But his actions in office undercut that slogan. Alan Freeman writes:
Sure, companies love reduced corporate income taxes and lower minimum wages but what they want above all is a rules-based system where you can make long-term business decisions, in the firm knowledge that you won’t be subject to the changing partisan political will of the folks in power.
That’s what distinguishes investing in a first-world industrial nation from investing in a banana republic, where the autocratic ruler in charge may grant you a permit to build a cell-phone network and the next year, yank it from you arbitrarily and give it to a political crony.
In an advanced democratic country, that makes governments reluctant to cancel the contracts signed by their predecessors even if they don’t like them. It’s not really a good message to investors to rip up contracts and when you have a system of laws and independent courts, breaking contracts can also prove to be very expensive.
Ford complains about expenses. But ripping up contracts doesn't bother him. Consider The Beer Store:
The Beer Store, established in 1927 to control the drinking habits of Ontarians in a society that was still deeply suspicious of demon alcohol, is clearly an anachronism. It’s anti-competitive and doesn’t reflect contemporary society and modern commerce.
Yet the three brewing companies that own The Beer Store signed a 10-year contract with the Ontario government in 2015 to renew this arrangement in perfectly good faith. It allowed for a broadening of sales in supermarkets but fundamentally allowed the near-monopoly to stand. Ford calls it a “sweetheart deal” for the Beer Store’s 450 outlets that he wants to end and fully open up the market.
But instead of waiting until the contract ends in six years, Ford is acting now. It’s good politics, he figures, and a great distraction from his lousy poll numbers and the pushback he’s getting from voters over cuts to education, health and municipalities.
The beer companies claim they have the right to claim billions of dollars in damages from Ontario if the province breaks the terms of the contract. The Ontario legislature, however, has powers to overrule that agreement and even escape the need to pay compensation, although the courts may feel differently.
In running roughshod over a legal contract, Ford is saying Ontario is open for business, provided they do business his way.
And that's the message. You can do things in Ontario -- as long as you do them Doug's way.