Ontario Economy

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Debt and taxes

Moody’s Investors Service is warning some of Canada’s provinces to get their act in gear lest their credit ratings face further pressure.

Moody’s, one of the world’s major agencies, didn’t single out any province in a new report released yesterday, pointing out that seven are in deficit. But its debt-to-revenue measure puts Ontario at the top of the naughty list.

Ontario, of course, is in the midst of an election campaign that pits the Liberals against the Conservatives as to who forms the next government.

The governing Liberals have presented a credible budget for these uncertain times, though it misses their original short-term target, forecasting a $12.5-billion shortfall, while still pledging to balance the books in line with the longer-term plan.

They also plan a jobs fund, billions in infrastructure spending and a focus on social services. The Tories, on the other hand, promise to balance the books far earlier, slash public sector positions and create a million jobs over an eight-year period, the latter being a wonderful catch-phrase but about as unrealistic as election promises come.

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Liberals want to ‘partner’ with business, PCs want to lower taxes, hydro rates

Ontario Liberal Leader Kathleen Wynne and Progressive Conservative Leader Tim Hudak are offering contrasting views on how best to help the auto industry prosper in the province.

Wynne was in Windsor on Wednesday, touting the importance of Ontario’s auto sector. She promised her party would to continue to work with and invest in auto manufacturers and suppliers should it form the next government. Ontarians head to the polls June 12.

“The auto sector is fundamental to this region but it’s also fundamental to Ontario,” Wynne said, speaking at Omega Tool, an auto parts supplier. Omega was previously a recipient of $440,000 in provincial money. The grant was part of a $4.5-million expansion. Dave Cecchin, president of Omega, said the grant helped create 10 “highly skilled jobs.”

“There is a direct connection between government and business … and the creation of jobs,” Wynne said. Wynne claimed that the Liberal government’s $4.8-billion investment in GM and Chrysler during the 2008 recession saved 95,000 jobs.

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The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion. 

The province that pioneered innovations from insulin to smartphones is falling behind.

In recent years, Nortel Networks Corp., BlackBerry Ltd., the U.S. Steel-owned Stelco Inc., the Caterpillar Inc.-owned Electro-Motive Diesel, Kellogg Co. and H.J. Heinz Co. have laid off more than 100,000 Ontario workers. That’s the short list. No sooner had the current Ontario election campaign begun than Unilever PLC said it would shut down its Brampton plant, maker of Knorr and Lipton foods, at a cost of more than 450 jobs.

Unfortunately, the job-creation centrepieces of the three major parties contesting the June 12 Ontario election would not curb that misery or do much if anything to recapture lost jobs.

Oddly, Hudak’s plan for creating jobs starts with destroying 100,000 of them, held by public servants. That’s 100,000 additional EI recipients draining the federal treasury. (There is only one taxpayer, as Tories like to point out.) Hudak, not gifted with a sense of irony, acknowledges that his own parents and his sister have been employed by government, as indeed Hudak himself has been for the past 19 years.

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The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Mark J. Barrenechea is President and CEO of OpenText Corporation.

California’s Highway 101 stretches 95 kilometres between San Francisco and San Jose, connecting small and large technology companies, students, innovators and venture capitalists. Nestled around Highway 101 is the largest innovation corridor in the world – Silicon Valley.

Similarly, Ontario’s tree-lined Highway 401 stretches 115 kilometres between Toronto and Waterloo, also connecting small and large technology companies, students, innovators and venture capitalists. Last year, this Ontario corridor surpassed all other cities and regions and became the world’s second largest innovation corridor. It is the Silicon Valley of the North.

In my 25 years in technology, I have traveled both valleys end-to-end and the similarities between the two corridors are more striking than their differences.

Silicon Valley employs approximately 380,000 tech workers; the Toronto-Waterloo corridor has nearly 280,000. The Waterloo Region boasts nearly 1,000 companies, contributing more than $30-billion annually to the global economy. In 2013, Startup Genome ranked Waterloo as 16th among the world’s 20 global startup hubs.

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The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

Give the Tory leader credit for laying his job on the line by promising to lay off 100,000 public servants.

Hello Tim Hudak! If Ontarians hadn’t noticed you yet, they’ll know you soon enough. Give the Tory leader credit for laying his job on the line: not many politicians go into an election campaign telling voters they’d ditch 100,000 jobs from the provincial government, schools and municipalities.

That’s a lot of public servants — and plenty of public services. Depending on the June 12 election results, all those people will lose their positions, or Hudak will. Beyond the explosive job cuts, he’d also cut corporate taxes by a stunning 30 per cent. The Tory leader announced Saturday he’d make Ontario the lowest-tax jurisdiction for business in North America.

Why keep cutting government and taxes?

Corporate rates in Ontario are already far lower than in neighbouring U.S. states that compete for the same investments. You may remember Republican Mitt Romney pointing enviously to Ontario’s low taxes in the last U.S. presidential election.

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The National Post is Canada’s second largest national paper.

There’s an election underway in Ontario, with the Liberals, led by Kathleen Wynne, trying to hold onto power against the Tim Hudak-led Progressive Conservatives and Andrea Horwath’s New Democrats.

Ms. Wynne is in a tricky position. Though long a senior Liberal, she only took over as leader of the party — and by extension, Ontario premier — 15 months ago, after the former premier, Dalton McGuinty, resigned. Mr. McGuinty took his ball and went home in the face of mounting evidence that the Liberals had blown a billion dollars of borrowed money to cancel two controversial gas-fired power plants, long championed by his government, in order to shore up his party’s prospects in several hotly contested ridings.

It worked. The Liberals held the seats. But the crass opportunism of the move, combined with the eye-popping price tag and efforts to whitewash the entire affair, destroyed Mr. McGuinty’s credibility. So he left. That’s where Ms. Wynne came in, and she’s been been trying to disassociate herself from Mr. McGuinty and the gas plants ever since.

In theory, at any rate. She apologized for the scandal. She insists she’s running as her own woman, on her record, not that of Mr. McGuinty — though her government has seemed a bit unclear on that, claiming the victories while denying the failures.

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The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

What does Kathleen Wynne have against hairstylists? The nice young woman who snips my bangs would like to know. To her surprise, she is now being regulated by a new body called the Ontario College of Trades. It wants her to fork over $120 every year (plus tax) for a piece of paper saying she’s qualified to do her job.

In order to get a licence, hairstylists already log 1,500 hours of school, write exams and serve apprenticeships. Now they must also have a Grade 12 diploma and pass a written government test. But hey! When it comes to protecting the public from rogue snippers, you can never be too careful.

The hairdresser tax is a small but potent example of what’s gone wrong in Ontario over the past decade. As manufacturing evaporated and jobs dried up, the Liberal government threw sand in the gears. All its instincts are regulatory and interventionist. At a time when we desperately need smaller businesses to create jobs, it has ratcheted up the cost of doing business and smothered them in red tape.

Meanwhile, it’s kept spending as if the good times never stopped. Prudent Ontarians used to deplore Quebec – those profligate French! – as the free-spending wastrel of Confederation. But now, we’re the wastrel. Our dour Scottish accountant forebears must be spinning in their graves.

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The National Post is Canada’s second largest national paper.

Ontario’s government is facing growing calls to get its fiscal house in order, with a Fraser Institute study pegging the province as an economic ball and chain “dragging down the country as a whole.” Respected tax policy expert Jack Mintz made a similar claim in a Financial Post opinion piece last week.

“Ontario is sagging under the weight of monstrous public debt, uncompetitive energy prices and rising taxes,” wrote Mr. Mintz, Palmer Chair, School of Public Policy, University of Calgary. “Given Ontario’s size, other regions of Canada are being hurt.”

But economists are split over how much a weak Ontario — with its shrinking per-capita GDP and weak private-sector employment amid other struggles — is being felt across the country, or whether the province is bearing the brunt of its own demise itself.

Livio di Matteo, a senior fellow at the Fraser Institute and lead author of the think-tank’s study released Monday, says Ontario’s economic struggles over the last decade to become a “have-not” province, receiving federal transfers instead of serving as a foundation for the national economy, has implications beyond its borders.

He blames an “incomplete transition to a more competitive world economy,” aggravated by high energy costs, reliance on manufacturing tied to the U.S. market and interventionist government policies.

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