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For Corporate Ontario, Bob Rae Is Public Enemy No. 1


International Business

FOR CORPORATE ONTARIO, BOB RAE IS PUBLIC ENEMY NO. 1

June 27 may be remembered in Toronto as the day business executives manned the barricades. As some 2,000 protesters from the construction, trucking, and other industries cheered outside the Ontario Parliament, the rally's organizer, John McBride, chief executive of Great Lakes Minerals, shouted: "We have a clear message for Bob Rae and his band of incompetents: `We're mad as hell.' "

Until recently, Rae, who eked out a surprise win last September as Ontario's first socialist premier, had managed to maintain an uneasy truce with the province's powerful and conservative business community. But now that he's moving ahead with his agenda, the ceasefire is over. Already, the mudslinging is getting fierce. In a much-discussed newspaper column on June 25, one of Canada's most prominent executives, Conrad M. Black, CEO of Hollinger Inc., lambasted Rae as a "millionaire-baiting,anticorporate agitator" who is creating "conditions in which no rational person would invest a cent in Ontario."

While Black's views may be extreme, most Canadian CEOs are "very concerned" about the direction Rae is heading, says Thomas P. d'Aquino, president of the Business Council on National Issues, Canada's leading business organization. Executives fear that Rae will drive industry out of Ontario, which accounts for 40% of Canadian gross national product and nearly half its manufacturing base. With the U. S.-Canada free-trade pact a reality, there is more heat than ever on businesses to move to greener pastures.

BUDGET BLOAT. What triggered the Toronto rally was Rae's budget for fiscal 1991, which calls for a startling 13.4% spending boost and a tripling of the deficit, to $8.4 billion. Since the budget was unveiled in April, Ontario has lost its AAA credit rating. The big deficits projected for the next three years mean increases in Ontario's taxes, which are already among the highest in North America. And business fears that Rae may soon sponsor pro-labor legislation and carry out past pledges to nationalize auto insurance.

The man Canadian business loves to bash is a 42-year-old lawyer who won a Rhodes scholarship to Oxford University in 1969. Rae says that working at a legal-aid clinic in the London slums confirmed his leftist views. The Ontario boss of the socialist New Democratic Party (NDP) since 1982, Rae rode a protest vote against the worst recession since the 1930s and free trade with the U. S. to the premiership.

Under Ontario's parliamentary system, Rae, who doesn't have to run again until 1995, wields far greater power than a state governor in the U. S. But business leaders can make things hot for him. Already, their protests have helped cut the NDP's approval rating to just 21%, according to the latest Gallup poll.Rae is enough of a politician to take heed. He eased up on plans to impose a big tax on gas-guzzling cars after loud warnings from General Motors Corp. and Ford Motor Co. of Canada. And he extended peace feelers on June 27, when he said he had "no interest in entering a four-year battle with the business community." But if the two sides fail to arrange at least a ceasefire, Ontario could become a war zone.William C. Symonds in Toronto


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