EXCLUSIVE: Premier Doug Ford’s 2018 mandate letters demanded savings by ‘year two’

When Ontario Premier Doug Ford took over the reins of the provincial government in 2018, he was determined to expedite a central campaign promise: make government more efficient by shaving four cents of every dollar spent by Queen’s Park.

Instead, the Progressive Conservative government’s first budget, delivered by then-finance minister Vic Fedeli in 2019, triggered a firestorm of controversy over the planned cuts in spending and likely led to Fedeli’s removal from the position.

Fedeli’s instructions, however, came directly from Premier Ford who set out a three-year timeline to balance the budget, leading to billions of dollars slashed from the fiscal plan.

For the first time, Global News can reveal the financial mandates given to the Minister of Finance, Treasury Board president and all cabinet ministers, instructing them to “identify efficiencies and savings” in their individual ministries.

The information comes from mandate letters obtained, exclusively, by Global News.

Ford’s instructions to his cabinet ministers in 2018 made it clear that his government intended to usher in a culture change, one that was focused on spending restraint and fiscal responsibility all while maintaining services residents rely on.

“As we move ahead with our plan to restore a strong economy and to make life more affordable for the great people of this province, we will begin to do so by eliminating wasteful government spending, cutting red tape and by making government more efficient,” Ford said in his mandate letter addressed to all ministers.

“This means reviewing all spending within your Ministry to identify efficiencies, program re-design, and savings that can be implemented over the course of our mandate.”

To realize maximum efficiencies on a short timetable, Ford directed the Minister of Finance and the Treasury Board president to work together to implement the government’s primary, cost-cutting objective.

Fedeli was told to take a “practical, reasonable approach” to Ontario’s finances by returning to a balanced budget “as quickly as possible.”

Ford’s directions to his then-Treasury Board president Peter Bethlenfalvy were more specific: he was to act as the enforcer and keep cabinet ministers in check.

Bethlenfalvy, the premier’s letter stated, was to “deliver demonstrable savings by year two, with full savings in place” by the end of the government’s third year.

“This savings goal will be made clear and you are expected to [hold] your Cabinet colleagues accountable for meeting this target in coordination with the Minister of Finance,” read the letter.

The result was a steady stream of cuts that delivered a severe political blow to a government still finding its feet.

Fedeli’s budget in 2019 proved to be so politically toxic to the conservative brand that then-federal Conservative leader Andrew Scheer refused to campaign with — or even mention — Ford during the national election. The budget also gave Prime Minister Justin Trudeau a foil to campaign against.

Ford would then spend much of the next year undoing the damage by reversing some of the decisions included in the fiscal document.

One of the central, and most controversial, policy pieces introduced by the Ford government during its first mandate aimed to protect the sustainability of the province’s finances by capping the wages of all public sector employees.

While the mandate letter to the Treasury Board president didn’t include specific instructions on wage restraint legislation, the 2018 mandate letter provides clues as to how Bill 124 was conceptualized by Bethlenfalvy’s ministry. The law capped public sector pay at one per cent per year for three years.

The direction from the premier’s office was to “improve Ontario’s fiscal situation,” to balance the budget “as quickly as possible” and — most importantly — to take the “lead in labour negotiations.”

The mandate letter said, “Work with the Minister of Labour on developing these relationships and evaluate options to update the labour relations process, including arbitration reforms, to better serve Ontario taxpayers and citizens.”

Bethlenfalvy was also instructed to “create and maintain public sector labour peace while protecting taxpayers.”

While the Treasury Board was left to decipher how to best deliver on the mandate letter, the rest of the Ontario cabinet was warned to prepare for a crackdown as the government was expecting to face “competing priorities from multiple interests.”

According to Ford’s letter, that meant “certain legacy and institutional interests that are used to getting their way with government will likely now find themselves on the losing side of some of our decision.”

The response from some sectors to the government’s new labour policies would be “disruptive,” Ford said.

“I am comfortable with that fact. You need to be too.”

Bill 124 triggered years of public protest against the government’s policy, union-led court challenges and more recently, arbitration decisions that heavily favoured roughly 780,000 broader public sector workers.

The Ford government has continued the legal fight to reinstate Bill 124, which was overturned in November and declared unconstitutional.

According to Ontario’s Financial Accountability Officer, the government’s cost-saving measure could add up to $8.4 billion in backpay. The bill is still being calculated and settlements with unions are still being reached.

The following is a list of instructions given to then-finance minister Vic Fedeli in July, 2018:

• Work with the Minister of Energy, the President of the Treasury Board and the appointed commission of inquiry to investigate the previous administration’s accounting practices to find solutions. This work should examine ways to reform and alter the Fair Hydro Plan to properly account for it and make the discount plan and make it fairer for future generations. In addition to this work, also work with these entities to resolve issues surrounding the calculation of pension assets. Jointly report back to Cabinet with a clear path forwards for the province.
•  Improve Ontario’s fiscal situation and take a practical, reasonable approach to Ontario’s finances. Work with the President of the Treasury Board to return to budget balance as quickly as possible while delivering the high quality of core services that Ontarians expect.
• Work closely with the President of the Treasury Board to deliver the province’s Fall Economic Updates and Budgets. In doing this valuable work, ensure there is true respect for the hard-earned tax dollars given to us by Ontario families by challenging your Cabinet colleagues on their proposed spending initiatives to be as efficient as possible.
• Implement our various tax reforms including enhancing the Ontario Tax Reduction to relieve minimum wage earners of their income tax burden and implementing: our reduction in the aviation fuel tax for the North, our refundable child care tax credit, and our reduced business tax plan.
• Implement our promise to reduce gasoline prices by 10 cents per litre.
• Review Ontario’s personal income tax brackets with a view to eliminating Ontario’s surtaxes without increasing taxes on hard working Ontarians. Ensure our promise to reduce personal income taxes for the middle class can be incorporated into the new structure.
• Immediately begin the process of exiting the Master Framework Agreement with the Beer Store as a first step towards the goal of fulfilling our promise to expand beer and wine to big box, grocery and convenience stores. Report back to Cabinet with a proposal to fulfill this promise.
• Remove barriers to enhanced pension access, including improving the pension system for the post-secondary sector and improving the usage of jointly-sponsored pension plans.
• Work closely with the Attorney General, Minister of Community Safety and Correctional Services, and other Cabinet colleagues to ensure that the legalization of cannabis is done safely, sold responsibly and regulated properly with the protection of children as your paramount concern.
• Work with the Minister of Agriculture, Food and Rural Affairs to return the slots at racetrack program to Ontario’s racetracks and help Ontario’s horseracing industry thrive. Simultaneously review Ontario Lottery and Gaming Corporation’s modernization program to ensure these changes meet an acceptable ethical and financial standard.

The following is a list of instructions given to then-Treasury Board president Peter Bethlenfalvy in July, 2018:

• Work with the Minister of Energy, the Minister of Finance and the appointed commission of inquiry to investigate the previous administration’s accounting practices to find solutions. This work should examine ways to reform and alter the Fair Hydro Plan to properly account for it and resolve the issues surrounding the calculation of pension assets.
• Improve Ontario’s fiscal situation and take a practical, reasonable approach to Ontario’s finances. Work with the Minister of Finance to return to budget balance as quickly as possible while delivering the high quality of services Ontarians expects.
• Commission a value-for-money audit of government programming and spending. Use the results of this audit to begin an efficiency review to identify areas of wasteful spending and needed program re-design. Ensure every Ministry participates in proposing ideas for spending reductions without negatively impacting core services provided by their Ministry. Your Ministry will be responsible for assessing these potential options and providing advice to Cabinet on implementation of these plans.
• Deliver demonstrable savings by year two, with full savings in place by the end of year three. This savings goal will be made clear and you are expected to you’re your Cabinet colleagues accountable for meeting this target in co-ordination with the Minister of Finance.
• As part of this audit, mandate that all Ministries fundamentally review the role and purpose of their agencies, boards and commissions to evaluate their usefulness, any spending efficiencies, and if they would perform better if housed within a different Ministry.
• Work with the Minister of Economic Development, Job Creation and Trade to identify red tape and burdensome regulations that limit job creation and effective service delivery. Hold your fellow Ministers accountable for bringing forward examples of red tape in their consultation with businesses.
• In your efforts to drive efficiencies, re-evaluate the province’s purchasing system and move towards a centralized procurement agency to buy in bulk and create savings for taxpayers.
• Bring the Ministry of Digital Government within your Ministry. Utilize the expertise in digitization to improve government services, reduce red tape, and create efficiencies.
• Take the necessary steps to prevent agencies, boards, and commissions from purchasing tables or tickets to political speeches.
• Take the lead in labour negotiations to create and maintain public sector labour peace while protecting taxpayers. Work with the Minister of Labour on developing these relationships and evaluate options to update the labour relations process, including arbitration reforms, to better serve Ontario taxpayers and citizens.

This story is the third story in the new Global News series ‘Mandated.’ Over several days, a series of stories will reveal the contents of the Ford government’s first set of mandate letters, handed to ministers after the party formed government in 2018. The letters have been kept secret since Doug Ford’s first election — a battle that has gone all the way to the Supreme Court of Canada.

Photo illustration by Janet Cordahi