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Ontario Economy

Can Canada Prosper without a Prosperous Ontario? – by Livio Di Matteo, Jason Clemens, and Milagros Palacios (Fraser Institute – April 2014)

Click here for the entire report: http://www.fraserinstitute.org/uploadedFiles/fraser-ca/Content/research-news/research/publications/can-canada-prosper-without-a-prosperous-ontario-rev.pdf

Summary

Ontario’s economic struggles, which are most dramatically illustrated by its transition to a “have-not” province, have implications far beyond the borders of the province. For the better part of a decade, and particularly since the recession of 2008/09, Ontario’s economic performance has dragged down that of the national economy. Due to both the sheer size of Ontario’s economy and its population, as well as the fact that the Canadian economy is highly integrated, what happens in Ontario influences our national economy.

The important influence of Ontario on the national economy is borne out by statistics. For example, if we compare the variation in per-capita GDP growth for Canada (without Ontario) against the variation in Ontario for the period from 1982 to 2012, we find that the variation in Ontario explains roughly three quarters of the variation in the rest of the national economy. Simply put, for the better part of three decades, the success of Canada’s economy was inextricably linked with the success and failure of Ontario’s economy.

Ontario’s influence is also seen in employment statistics. About two thirds of the variation in employment growth in the rest of Canada between 1982 and 2012 is explained by the variation in employment growth in Ontario. In other words, Canada experienced strong employment growth when Ontario experienced strong employment growth, and vice versa.

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News Release: Creating Cleaner Air in Ontario: Province Has Eliminated Coal-Fired Generation

April 15, 2014 5:00 a.m.Ministry of Energy

Ontario is now the first jurisdiction in North America to fully eliminate coal as a source of electricity generation. The Thunder Bay Generating Station, Ontario’s last remaining coal-fired facility, has burned its last supply of coal.

Operated by Ontario Power Generation, Thunder Bay Generating Station was the oldest coal-fired station in the province. The plant is scheduled to be converted to burn advanced biomass, a renewable fuel source. The province has replaced coal generation with a mix of emission-free electricity sources like nuclear, waterpower, wind and solar, along with lower-emission electricity sources like natural gas and biomass.

Ontario has fulfilled its commitment to end coal generation in advance of its target of the end of 2014. A coal-free electricity supply mix has led to a significant reduction in harmful emissions, as well as cleaner air and a healthier environment.

Providing clean, reliable and affordable power is part of the government’s economic plan that is creating jobs for today and tomorrow. The comprehensive plan and its six priorities focus on Ontario’s greatest strengths – its people and strategic partnerships.

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Is sad sack Ontario ‘dragging down’ the rest of Canada? – by Armina Ligaya (National Post – April 15, 2014)

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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Ontario confronts pinched new normal – by Carol Goar (Toronto Star – April 9, 2014)

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.

Ontario Finance Minister calls on MPPs to think beyond the election cycle, then contradicts his own advice.

We can stop waiting for the recovery. It has come and gone. We’ve moved from the old normal of steady economic growth, with jobs that paid enough to live on and rising wages; into a new normal of fitful growth, global uncertainty, constrained government revenues and a long, slow exodus of 2 million baby boomers from the workforce.

This was the picture painted by Finance Minister Charles Sousa in his long-term report on the Ontario economy, presented to the legislative assembly last week.

Over the next 20 years, he expects cyclical ups and downs, shock waves from abroad, brief windfalls at home and new technologies that will change the economic landscape. But the overall trajectory will be flatter than it has ever been in our lives.

To put that in numbers, Ontario’s economy will grow at an average annual rate of 2.1 per cent a year between now and 2035. That is slower than the rest of Canada (2.2 per cent), slower than the United States (2.4 per cent) and slower than the global average (3.1 per cent). “We need to start thinking beyond election cycles,” Sousa told MPPs.

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Is Hudak’s ‘million jobs’ plan the economic shock Ontario needs? – by Christina Blizzard (Toronto Sun – February 23, 2014)

http://www.ottawasun.com/home

TORONTO – A million jobs: Is it myth or miracle. That’s the question PC leader Tim Hudak was asked as he introduced his “Million Jobs Act” in the legislature last week.

I posed that question to economists.The province’s manufacturing sector is dying. We’ve lost 300,000 jobs over the last 10 years. Big companies such as Heinz and Kelloggs are pulling out daily. University of Calgary Professor Jack Mintz said he’s not sure public policy alone will create a million jobs. Other factors, such as the world economy, play a big part.

Mintz figures this province needs a kick start.“I think Ontario needs a shock in the positive sense. It’s dragging. It needs a serious look at the restructured role it’s going to have,” he said. “I think he (Hudak) has the right focus, which is to say,’ How can we get more economic growth and more jobs?’

“Whether he can create a million jobs or not is another story,” he added. Hudak’s plan to get energy costs under control makes sense, Mintz said. “I think the energy file is in a mess in Ontario and needs to be fixed. It’s going in the wrong direction right now and it’s going to make Ontario very uncompetitive,” he said.

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Ontario delivered on taxes. Business’s turn to step up – by Jeffrey Simpson (Globe and Mail – January 10, 2014)

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.

Hello, Queen’s Park. Hello, Toronto. Hello, Ottawa. Anybody home?

Ontario continues to stagnate while provincial politicians play games in a minority government, Torontonians are fixated by the Rob Ford gong show and the Harper Conservatives remained preoccupied by their western base.

Ontario’s task force on competitiveness and productivity recently released its 12th annual report and discovered that after inflation, Ontario’s gross domestic product has grown by just 6 per cent since 2002. That paltry growth has left the province 14th among comparable provinces and U.S. states, with only Florida and Quebec lower.

Sure, the task force has recommendations and the occasional critique of government. But what really stands out is its criticism of business, whose lobbyists and bullhorns in the media are always preaching for lower taxes.

Ontario has delivered. The province lowered corporate taxes. It harmonized the provincial and federal sales tax into the Harmonized Sales Tax.

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Time for this political advisor to Butt out – by Rolly Ethier (Inside Bellville.com – November 14, 2013)

http://www.insidebelleville.com/bellevilleregion/

Central Hastings News – It wasn’t just coincidence that Liberal leader Justin Trudeau suddenly came out recently and blamed Prime Minister Stephen Harper for the U.S. refusal to allow the Keystone XL pipeline to be built. According to Trudeau, all Harper had to do to sanction the pipeline was to simply become a far-left liberal ideologue like himself by approving a carbon tax, something even the Americans haven’t yet done.

Of course, Trudeau also claimed his main objective is to protect the middle class but he also insists that taxing everyone is the right thing to do.

It wasn’t too surprising to understand where Trudeau is coming from by pushing for still another environmental hit to be imposed on the taxpayers. The carbon tax initiative comes shortly after the Trudeau camp’s selection of Gerald Butts as one of his key advisors. Butts, known as Butthead by his many critics, was the Principal Secretary to Ontario Premier Dalton McGuinty prior to getting a call from the Trudeau people. He also has his fingerprints all over the Green Energy fiasco and other boondoggles by the provincial Liberals.

So Butts helped to economically destroy one province and now he has his sights on bigger things like the entire country’s economy so we all can become a financial basket case just like the Obama administration.

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How long does Ontario need to turn around OPG? – by Konrad Yakabuski (Globe and Mail – December 12, 2013)

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.

How long should it take to turn the Titanic around? Is five years a reasonable amount of time to allow for the transformation of a bloated and poorly run government-owned utility into a disciplined, high-performing one? Surely 10 years should be enough?

A decade ago, Ontario’s newly appointed energy minister promised to fix the mess at Ontario Power Generation. Dwight Duncan vowed to end to the years of “indecision and ideology” that had hamstrung electricity policy under the Progressive Conservatives and New Democrats. Job One was ending the excesses at OPG.

Mr. Duncan hired a bank chairman and two former federal cabinet ministers to examine the utility that managed a motley stable of publicly owned energy assets, including the Adam Beck hydroelectric station at Niagara Falls that once made Ontario an energy leader and the problem-plagued fleet of nuclear reactors, which had become the bane of Mr. Duncan’s predecessors and saddled power consumers with the utility’s atomic-sized debt.

The group led by former Liberal minister John Manley, former Tory minister Jake Epp and Bank of Nova Scotia chairman Peter Godsoe, sized up their task:

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Corporate excess tops radioactive waste at OPG – by Martin Regg Cohn (Toronto Star – December 12, 2013)

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.

Why did OPG bosses overpay themselves while overcharging electricity ratepayers and impoverishing OPG’s sole shareholder — us?

Sweetheart hirings, obscene pensions, bloated bonuses, skyrocketing salaries: You don’t need to be a rocket scientist — or an auditor — to know the numbers don’t add up at OPG.

Surely a nuclear engineer could do the math? Like Tom Mitchell, the handsomely paid CEO of Ontario Power Generation?
Mitchell’s a smart guy who doesn’t count with his fingers, but it’s hard to wag your finger at overpaid staff when you’re pocketing $1.7 million in a good year.

But where was OPG’s board of directors, who are supposed to oversee work flow, supervise cash flow and superimpose core values? You don’t have to be a right-thinking, God-fearing apostle to know something smelled rotten in the boardroom.

Surely an old Tory, proud of his Mennonite heritage, could see through the lack of thrift? Like Jake Epp, the chairman of the board at OPG?

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Ontario driving jobs out with Blue Boxes, green energy – by Terence Corcoran (National Post – December 10, 2013)

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

Slowly but surely, Blue Boxes and green energy are driving red tomatoes out of the province

Did the blue box help kill Ontario’s red tomato? Certainly not by itself, but when Heinz announced last month that it was shutting its century-old ketchup-making plant in Leamington, Ontario, the U.S. food maker had already warned against a new provincial government plan to impose major new waste reduction fees on industry.

In a letter to the government in August, Heinz said, among other things, that the proposed massive overhaul of the province’s Blue Box program failed to consider the “impact the new framework could have on the Ontario economy.” The Heinz letter was part of major alarm-ringing exercise from Food and Consumer Products of Canada (FCPC) against Ontario Environment Minister Bill Bradley’s scheme to upload hundreds of millions of dollars in recycling costs onto industry.

Industry currently pays $104-million in “steward fees” to cover 50% of the cost of the province’s pioneering imposition, two decades ago, of a bass-ackward recycling regime. Now the province wants to upload all the costs, a burden the food industry says could boost the cost of the waste regime to $231-million.

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We all breathe easier in post-coal Ontario – by Stephen Bede Scharper (Toronto Star – December 2, 2013)

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 elimination of coal-fired plants in Ontario is a deeply hopeful story. It shows that progress can be made in fighting climate change.

A decade ago, in the team-taught core environmental studies course at the University of Toronto, my colleagues and I assigned the Ontario Medical Association (OMA) Smog Report as our touchstone text. The report noted the severe health effects associated with air pollution in Ontario.

In 2000, for example, the OMA detailed, there were 1,925 premature deaths, 9,807 hospital admissions, 45,250 emergency room visits, and over 46 million minor illnesses engendered by increased Ontario smog levels. Taken together, these fulsome effects take your breath away—literally.

These disquieting figures all jumped significantly five years later, as indicated in the OMA 2005 report, and were projected to continue to rise unless something were done about elevated levels of air pollution in the province.

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Stop petty squabbles and help Ontario’s Ring of Fire succeed (Toronto Star Editorial – November 30, 2013)

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.

Ontario’s Ring of Fire mining development is worth an estimated $60 billion but it’s being delayed by bad political decisions.

Bob Rae is a man of many hats. He’s been the NDP premier of Ontario, the interim federal Liberal leader and is currently the chief negotiator and counsel for the Matawa First Nations.

Now, at least temporarily, he’s playing the role of rational adult, calling on Premier Kathleen Wynne and Prime Minister Stephen Harper to stop their petty squabble over the development of northern Ontario’s massively lucrative Ring of Fire, 500 kilometres north of Thunder Bay.

As Rae told Toronto’s Empire Club last week: “It is, to me, deeply troubling that those two governments still can’t agree on who’s responsible for what. This is challenging for the First Nations. It’s also challenging for companies that are trying to do business. We need to create some certainty.” Amen to that.

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Canada’s Ontario joins global ‘war on coal’ – by Cecilia Jamasmie (Mining.com – November 28, 2013)

http://www.mining.com/

The Canadian province of Ontario may soon become the first place in North America to snuff out coal-fired electricity generation for good, as it is set to introduce next week legislation aimed to ban the burning of coal and the building of new such plants.

If the proposed Ending Coal for Cleaner Air Act is approved, it would means that no Ontario generating station will ever burn coal again, once this kind of facilities stop operating by the end of 2014, the government said in a press release.

The plan has been in the works for quite a while. The Liberals first promised to close the coal plants in 2007, then pushed back the timetable to 2009 and again to 2014.

In January this year, Chris Bentley —who was then Ontario’s minister of energy— vowed he would make coal account for less than 1% of the province energy supply by 2014.

He also said the province’s largest coal-fired electricity plants, Nanticoke and Lambton, would be shut by the end the year. And the province will likely deliver— it is finishing the conversion of Nanticoke to run on biomass.

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For Ontario’s economy, good is not good enough – by Roger Martin (Toronto Star – November 28, 2013)

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.

Ontario’s future prosperity depends on government and the private sector in the province stepping up and exploiting the ample opportunities before them.

In 2001, then-premier Mike Harris created the Task Force on Competitiveness, Productivity and Economic Progress to measure and monitor Ontario’s performance in those areas compared to other provinces and U.S. states. The government understood about productivity what Nobel Laureate Paul Krugman asserted in 1994: that it “isn’t everything, but in the long run it is almost everything.”

By comparing Ontario to peer jurisdictions, our government hoped that policy-makers, business leaders and individual Ontarians would have the information and the impetus to make the decisions necessary to improve our economy.

Back in 2001, Ontario ranked 14th out of 16 North American peers and sixth out of 13 non-North American peers for an overall ranking of 19th out of 28 global peers.

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Economic report paints grim picture of Ontario – by Martin Regg Cohn (Toronto Star – November 26, 2013)

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.

After 12 years of looking ahead, Roger Martin’s Task Force on Competitiveness, Productivity and Economic Progress took a look back and found Ontario in a stall — not just exports, but domestic investment.

Something’s missing from a new task force report on the province’s economic progress: There’s no progress — just regress over the past decade.

“A highly disconcerting finding,” observes economist Roger Martin, in a grim echo of Al Gore’s An Inconvenient Truth.
Coincidentally, Gore dropped by last week to give Ontario an eco-hug. But it’s an economic-hug that we really need.

After 12 years of looking ahead, Martin’s Task Force on Competitiveness, Productivity and Economic Progress took a look back and found Ontario in a stall — not just in our outputs (exports), but inputs (domestic investment). Rather than closing a productivity gap with our American competition, Ontario is lagging further behind.

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