New socialist premier labors to persuade public in Ontario province . . .that his proposals point to a better life, not an intrusive government

December 09, 1990|By Chicago Tribune

TORONTO -- The new socialist premier of Ontario, Canada's largest and richest province, spent most of his first weeks in office trying to dispel widespread fears that he is a dangerous radical.

Robert Keith Rae, 42, an affable, boyish-looking Rhodes scholar who never thought he'd actually be elected as the nation's second-most-powerful politician, insists that socialism is "not a swear word," but a proud tradition in Canadian politics.

"This is all part of the 'I am not a wacko' campaign," Mr. Rae deadpanned to a steady procession of visitors.

His political opponents have called Mr. Rae, the son of a diplomat, a "silk-stocking socialist." His supporters say he is a sensitive intellectual, an activist with a social conscience.

Mr. Rae is constantly reassuring a nervous business community that he will proceed carefully and delay more extreme parts of a socialist agenda that many executives see as their worst nightmare.

His left-of-center New Democratic Party has called in the past for nationalizing banks, mines and forestry companies. Mr. Rae's most radical scheme seems to be government-run auto insurance.

Mr. Rae unabashedly declares that business should pay a fairer share of taxes and take on more social responsibilities in partnership with government.

Even so, the projected cost of his social agenda for the next two years is nearly $3.7 billion (U.S.).

He wants to increase the minimum wage in Ontario by 40 percent, bring in rent control and better pay equity, build non-profit housing units, increase day-care subsidies, fight the U.S.-Canada Free Trade Agreement and pass an Environmental Bill of Rights.

He would stop taxing those who live below the poverty line, but he would start taxing real estate speculators and the estates of "the rich and super-rich" and set a minimum corporate tax of 8 percent on company profits. The new taxes would raise $2 billion annually.

He doesn't mind deficit spending if it provides some relief for those being hurt by the current recession.

This year's deficit for the province is projected to be nearly $2.2 billion out of a $40 billion annual budget.

The New Democratic Party won a majority government in the Sept. 6 election with only 38 percent of the vote, still enough to capture 74 of the 130 seats in the provincial legislature.

But political analysts agree that Mr. Rae's victory was more a stunning rejection of Liberal Premier David Peterson than an endorsement of socialism in the province that contains 40 percent of Canada's industry.

"To say the province has gone socialist is poppycock," said one political observer, pointing to the current backlash in Canada against cynical, manipulative politicians and unresponsive government.

An October poll by Insight Canada Research in Toronto found that Mr. Rae's 57 percent popularity rating could evaporate if he implemented radical policies that damaged the economy or sharply raised taxes.

But Mr. Mr. Rae argues that voters seek greater participation in the democratic process and greater integrity from their leaders.

"It's not really capitalism they're looking for," he mused. "It's being able to take control of their institutions. I think working people everywhere feel that in some way.

"We're populists. People like that," he said. "Even now, people call me 'Premier Bob,' because they feel more comfortable doing that."

Mr. Rae, who spent two years as a social worker before studying law, praised Canada's extensive social welfare system and government services such as socialized medicine. "I want to strengthen those things," he said. "I take pride in them." But he also wants business to invest more in employee training and benefits.

The New Democratic Party has its roots in the western Canada of the 1930s, the Depression and Roosevelt-style government intervention. It since has evolved into Canada's third-strongest party, behind the mainstream Progressive Conservatives, now in power, and the Liberals.

Until now, New Democrats managed to get elected only in the West, running provincial governments in Manitoba, Saskatchewan, British Columbia and the Yukon Territory.

Mr. Rae's victory in Ontario was the party's first penetration of central Canada. But it sent shock waves through financial markets from Toronto's Bay Street to Wall Street. Others welcomed the possibility of a New Deal for Ontario.

Homeless people were so hopeful that some even showed up at the inauguration.

"I hope it reflects a kind of turning away from the 1980s' philosophy that the only vision of society was the corporate, multinational vision," said national New Democratic leader Audrey McLaughlin.

"It's not that it's unimportant, but it can't be the only voice. Over the years, we have represented a balanced approach. We're concerned about farmers, labor, social justice -- as well as believing in a mixed economy."

Mr. Rae points out that socialist governments have worked well with business in a number of Western European nations.

He pledges to respect private property and to try not to damage the investment climate of the province, but business still is jittery.

"Our initial reaction was absolute shock -- disbelief," said Jim Bennett, vice president and general manager of the Canadian Federation of Independent Business. "That reaction very quickly gave way to dread when we looked at the party agenda."

The proposed increases in taxes and the minimum wage and the threat of more government regulation could drive business out of the province, warned Mr. Bennett, whose organization represents 90,000 small- and medium-sized firms, nearly half of them in Ontario.

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