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Ontarians are clearly having buyer’s remorse after re-electing its Liberal government last year, with two-thirds now believing that Ontario is headed in the wrong direction. An exasperated Kathleen Wynne recently asked “What is it that especially disqualifies me for the job I’m doing?” as Premier of Ontario. Well, since she asked, let’s list the problems the Liberal government has created.
Start with persistent slow economic growth. Since 2002, real GDP growth in Ontario has been consistently below the national average, with a total shortfall of over 10 percentage points. Two-thirds of this gap occurred outside of recession years. Meanwhile, Ontario’s unemployment rate rose above the national average in 2007 for the first time on record and has stayed there.
Ontario has lost its traditional above-average income status in Canada. In the decades after World War II, real disposable income per capita in Ontario was 20 per cent above the national average; in the 1990s under the Harris government, it was still 10 per cent above average. In 2012 and 2013, incomes in Ontario fell below the national average for the first time ever.
Ontario now qualifies for equalization payments, confirming its shift from “have” to “have-not” status within Confederation.
The government’s response was more government spending financed by deficits that doubled its total debt over the past decade. This failed to stimulate growth, but has triggered two downgrades to Ontario’s debt rating. Almost all of Ontario’s total debt was accumulated in two periods — during Bob Rae’s failed administration of the early 1990s and the Liberal government over the past decade.
Population trends show that people in Canada and around the world understand Ontario’s economy is floundering, even if its own government does not. Ontario was once the beacon for both immigrants arriving in Canada and people moving within Canada. However, for 11 straight years there has been a net exodus from Ontario to other provinces as people “vote with their feet” and leave for greener pastures.
Meanwhile, Ontario’s share of immigrants arriving from outside Canada has fallen from 60 per cent to a record low of 38 per cent. The result is an aging population saddled with a high debt burden and slow economic growth.
For the rest of this column, click here: http://business.financialpost.com/fp-comment/wynnes-losing-performance-how-ontarios-growth-killing-policies-are-sinking-the-economy