OTTAWA — The Ontario Progressive Conservatives under Premier Doug Ford won a bigger majority for a second term Thursday night. Multiple economists told The Logic the victory will give the Tories freedom to manoeuvre for the next four years—if they know what to do with it in a very difficult world.

“We’re dealing with an economic environment where a lot of factors that will have a big impact on the Ontario economy are outside provincial control,” said Sheila Block, a senior economist at the Canadian Centre for Policy Alternatives.

Supply-chain problems, inflation and an aging population—governments have to deal with them but no one government can solve them, she said.

“In some ways, it’s going to be a lot tougher to govern—from an economic-policy perspective, because that’s my perspective—than it was over the last four years. And I realize how big of a statement that is,” Block said. “I think what we know of the Ford government’s plans, which were contained in the budget, are not up to the complexity of what they’re going to have to be dealing with.”

Mike Moffatt, senior director of policy and innovation at the University of Ottawa’s Smart Prosperity Institute, pointed to the policy challenges posed by inflation as a particular problem for innovation-economy players. It’s especially evident with the cost of housing.

“The Kitchener-Waterloo-Toronto ecosystem has always paid less than similar clusters in the United States, but [it has] also been associated with a lower cost of living,” Moffatt said. “Well, now, with the advent of more work-from-home, it’s going to be harder, I think, for Canadian companies to keep Canadian talent, partly because they can just get hired by American companies that pay more.”

The Progressive Conservatives have at least recognized there’s a problem. They’ve promised major reforms to the rules on property development in Ontario, with new packages of measures every year.

“I’m cautiously optimistic that just the size of this mandate will hopefully allow the government to be a little bit more bold and say, ‘Look, we’ve got this mandate from the people,’ so they can push the municipalities a little bit harder than they might otherwise would,” Moffatt said.

People who advocate directly for businesses are concerned about some more specific issues.

“There’s not much [that’s] clear from the campaign in terms of policy proposals for innovation, or what I call advanced industries,” said Robert Asselin, senior vice-president of policy for the Business Council of Canada.

In the last four years, he’s been encouraged by moves like creating an intellectual property agency, though. “The glass is half empty—but I wouldn’t presume this government won’t do anything,” Asselin said.

It needs to focus on the economy of the future, he said. The 2022 budget that served them as a platform was titled “Ontario’s Plan to Build” and had a photo of about a dozen lanes of Highway 401 on the cover. As important as hard infrastructure is, Asselin said it’s not the foundation of a research- and innovation-oriented economy in the 21st century.

Block expressed a similar concern in a different way: the Tories are focused on building, but a new hospital needs people to work in it, she said. “The focus on, you can kind of call it the ‘male economy’ rather than the ‘care economy,’ will undermine some of the efforts … because it’s going to be harder to attract people if you don’t have good health care here.”

The same applies to direct supports for industry. Asselin said pumping money into the auto sector has meant factories and jobs, but not necessarily the optimal kind of growth.

“We have to go to the next step,” he said. “What is it we add to the value chain?” Manufacturing parts and bolting them together isn’t as valuable as designing and making better batteries for electric vehicles, he said.

There’s potential the re-elected Tories should tap, agreed Alanna Sokic, who deals with the Ontario government for the Council of Canadian Innovators; building up the province’s capacity to design and make new things, especially filling in gaps in EV supply chains, would help protect the auto industry from global shifts.

“We have some great players on the ground in the auto sector who are struggling to make inroads, when this government is shepherding and heralding investments from LG and Stellantis and all these foreign players, when we have these folks who are more or less doing that here,” she said.

Beyond the auto sector, Sokic told The Logic the Progressive Conservatives have begun work on a lot of encouraging things, from the intellectual property agency that Asselin mentioned to data-protection standards to modernizing government procurement.

“Where we really need to work on [in] a second mandate is the execution of a lot of those things,” she said. “I think those initiatives were on the policy agenda. They were announced. But I don’t think we really saw the execution and the implementation that the innovation ecosystem was looking for.”

A digital-ID program to replace physical cards like drivers’ licences, which was expected at the end of 2021 but delayed to this year, is one example. “And we’re sitting here one day after the election, and we still don’t have any news on that,” Sokic said.

That’s one thing, but it’s representative, she said, and it deepens the challenge when Ontario companies are competing with other provinces and other countries. “When we modernize government, and modernize our civil society, that just creates a more attractive environment with which to attract talent.”