Greg Albo & Bryan Evans, eds., Divided Province: Ontario Politics in the Age of Neoliberalism (Montreal & Kingston: McGill-Queen’s University Press 2019)

In understanding the character and depth of neoliberalism in Ontario, the recently edited volume by Greg Albo and Bryan Evans, Divided Province: Ontario Politics in the Age of Neoliberalism, is an essential tool. Spanning roughly from the Liberal minority government in the late 1980s to the present, the chapters provide a detailed examination of the neoliberal era in Ontario. The four sections of the book range from critical, cutting-edge essays on Ontario political economy, investigations into the restructuring of the provincial state, to analyses of the various forms of resistance that have emerged to the neoliberal agenda. Divided Province not only provides a thorough historical account of the political and economic turbulence that has defined 30 years of neoliberalism in Ontario, but also expertly explores some of the paradoxical features that have shaped neoliberal transformations throughout the advanced capitalism world. These being in particular the continued role for the state in the reproduction of the supposedly free-market order of neoliberalism, the spectacular expansion of government debt despite near-continuous rounds of budgetary austerity, and the perpetuation of a neoliberal policy consensus among governing political parties despite significant upheaval and alteration within the sphere of electoral politics.

The opening essay by Albo sets the critical tone for the volume and provides a comprehensive definition of the neoliberalism as a “form of social rule whose modes of administration and policy practices are ‘market-expanding’…the state is reorganized to advance the social conditions that allow the propertied classes to extract value from the working classes.” (6) While neoliberalism can be perceived as “market-expanding,” in the sense that it spreads competitive market dynamics and market discipline into new areas of social life, this cannot be understood as a natural process or order absent of state intervention. Neoliberalism, in other words, is not what you have left after the retrenchment of the Keynesian welfare state. Rather, in Janus-faced fashion, the laissez-faire order of neoliberalism necessitates an interventionist state to enforce and expand free market relations: to create new forms of property, legally ensure new contracts, and maintain new markets; to deepen the commodification of labour, monetize public assets, and provide the social and material infrastructure underwriting capitalist accumulation. According to Albo, this is no less true at the level of a provincial/regional state like Ontario as it is at the national level, and he demonstrates how in the context of neoliberalism the provincial state plays an important coordinating role in regional labour markets and production systems.

The chapters in the first section of Divided Province covering the political and economic restructuring of Ontario and detail this continued role of the state under neoliberalism. State intervention comes not only in the form of direct subsidies (see Dimitry Anastakis’ chapter), but also in more fundamental ways related to the re-regulation of political economic governance. John Peters’ and Steven Tufts’ essays on the structural changes occurring within Ontario’s traditionally manufacturing-based political economy, for example, demonstrate the provincial state’s role in orchestrating the growth of both high and low-end services through key legislative and regulatory supports. At the high-end of the service sector changes came, for example, through the legalization of securitization (i.e. the bundling and reselling of loans) and other financial instruments that supported the growth of financial activity in the province and made it the financial hub of the country. At the low-end, the provincial state played a key role in enhancing flexibility in Ontario’s labour market through a number of market-enhancing reforms to labour market policy that facilitated non-standard, precarious, and low-wage employment. This has occurred not only through deregulation, but also through the implementation of more active forms of workfare within the social security system that increase the market-dependence of the unemployed and disabled (See also Peter Graefe and Carol-Anne Hudson’s chapter on anti-poverty policy).

This Janus-like character of neoliberalism goes beyond the market/state dichotomy. Despite the rhetoric of fiscal austerity and balanced budgets by all three of the major parties, the provincial debt has steadily climbed in the neoliberal era. As a result, Ontario is now one of the most indebted subnational governments in the advanced capitalist world. This should not have happened under the doctrine of “market-preserving federalism” that has oriented intergovernmental fiscal reform in Canada under neoliberalism. As Robert Drummond highlights in his essay on federalism, under a market-preserving federalism regime taxing and spending power is pushed down onto the provinces, promoting interprovincial competition over revenue sources and, as a result, fiscal responsibility. While this may have led to a cut-throat tax regime across the federation, as provinces undercut one another to lure investment, it did not lead to a reduction in subnational debt. Nor was the massive increase in subnational debt believed possible under the doctrine of “expansionary austerity,” adhered to across the partisan divide, which suggests that cuts to taxation and social spending will free up private investment and spur economic growth, generating increased government revenues that will cover the cost of lost taxation as well as service government debts.

One way or another, the austerity agenda has been a key point of consensus among all three governing parties in Ontario throughout the neoliberal period as highlighted in the second and third sections of Divided Province on policies and institutions. As Albo points out, this has been a result of the depoliticization of key aspects of democratic decision-making. In part, this has been a failing of political parties that have become increasingly disengaged from popular involvement in party democracy and have withdrawn into the institutions of the state, the media, and elite policy networks. Consequently, the scope of policy over which they compete is limited, restricted to issues within the parameters of a broader neoliberal consensus on a macroeconomic policy defined by fiscal austerity. Here lies another paradox of neoliberalism in Ontario in that in the face of deepening socio-economic, geographic, and racial inequalities (detailed especially in the closing section of the book), mainstream parties on both the left and the right have converged on an austerity-driven macroeconomic paradigm that has limited any popular discussion over substantial redistributive or demand-side issues that could address these growing social divisions.

As a result, the economic policy debate under neoliberalism has been on the supply-side of the economy and generally focused on microeconomic reform. Differences on the supply-side between the centre-left and the centre-right are over the role of the state in facilitating microeconomic, firm-level competitiveness and whether or not labour-market protections and the modern welfare state serve as “beneficial constraints” on business. Parties on the centre-left still see an important steering role in cultivating the human capital and social relations required for firms to succeed in the cotemporary ‘knowledge economy’; competing on the basis of their capacity for innovation and production of high value-added goods and services. This means a certain amount of spending on extra-market supports for education and training, R&D, and labour market protections that either directly or indirectly support the development of human capital and knowledge production. Thus, the centre-left or Third Way approach to supply-side competitiveness is associated at an ideological level with a higher tax regime, more rigid regulatory environment, and even greater support for unions so long as they buy into the consensus on the need for global competitiveness. It is believed that firms will acquiesce or even support these measures because of the competitive advantage they derive from these extra-market supports. Parties on the right, however, see any state interventions into the economy as having a distorting effect on markets and reducing overall efficiency. The right perspective adopts a more market-driven supply-side economics that understands the best way to improve the competitiveness of firms to be a low-tax regime and loose regulatory environment that maximizes employer discretion and incentivizes private investment. As such the position of the right is that unions represent an unacceptable form of rent-seeking and market distortion that needs to be combated whenever and wherever possible.

Arguably, Divided Province does not make enough of these differences that have real consequences for labour market politics. When they are recognized, they are largely perceived as different degrees of neoliberalism. It is clear, however, as outlined in Charles Smith’s chapter on employment policy, that the supply-side approach of the ndp in the early 1990s, with its attempts at creating European-style social partnerships between business and labour is qualitatively different from the “free market” (i.e. capital-first) approach of the Harris’ pcs later in the decade. More recently, the Liberals have also followed in the footsteps of the European centre-left in the sphere of industrial relations in promoting the legal regulation of the employment relationship through expansions of Employment Standards Act as a substitute for large-scale collective bargaining. This is different from the Progressive Conservative approach under Mike Harris and now Doug Ford, who would prefer employers “educate themselves” on workplace standards and provincial labour law. While these policy differences may not have reversed the larger trajectory towards greater labour market flexibility for employers, they nonetheless have important consequences for labour. The Wynne Liberal’s Fair Workplaces, Better Jobs Act (2017), for instance, did contain an important raise in the minimum wage as well as various protections for the more precarious segments of the workforce.

Focusing solely on these differences, however, as much mainstream political economy literature inside and outside of Canada does, comes at the expense of limiting the scope to only those issues and policy areas that are openly contested in the electoral arena, leaving aside important areas of elite consensus that structure neoliberal governance. These areas of consensus include not only fiscal austerity, as highlighted above, but also the need for an inflation-targeting monetary policy, the commodification and privatization of public goods and infrastructure and, in general, the expansion of competitive market relations into more and more spheres of social life. Divided Province enables the reader to grasp these fundamental continuities in the province’s political trajectory and, in this sense, is a great resource for students and researchers trying to understand contemporary developments in provincial politics and policy within the broader context of neoliberal capitalism.

Brent Toye

York University