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Earlier Discussion

Ontario's back is to the wall

Continued from Page 3

Murray Campbell: As I said earlier, I'm not trying to defend the McGuinty government. It has what it thinks is a economic plan for the future. It is based, primarily, on trying to produce a new generation of skilled workers to pave the way to a future in which manufacturing figures less prominently. Government officials have been saying for years that they want Ontario to resemble Massachusetts's Route 128 high-tech corridor rather than the rusted-out sections of Ohio. To that end, they have poured money into K-12 education and into post-secondary education.

Clearly, that transition from the present to the future isn't complete and laid-off workers in the manufacturing sector are finding if difficult to get new jobs and to get access to training for new skills.

As for Alberta, I'm sure Mr. McGuinty would be delighted to find himself sitting on vast pools of oil as prices went through the roof. The question is what will Alberta do now that oil prices have sunk.

Ryan Ginger from Canada writes: Well gee, when our own Federal Finance Minister goes around telling his friends that Ontario is the 'last place to do business', should we be surprised if businesses aren't exactly clamoring to invest in Ontario?

Sasha Nagy: Further to this comment. This does beg the question. Did Flaherty's ugly rhetoric of last year really hurt Ontario?

Murray Campbell: It's possible that it scared off a few initial sorties but I doubt it affected serious investment plans. Those with sizeable amounts of money to invest don't do it on a whim. They want to know if the government is stable, if the jurisdiction's education system is sound, if it has a skilled work force, a decent health care system, abundant supplies of moderately priced electricity and, yes, what its tax rates are. Mr. Flaherty's comments were puzzling and irritating but I doubt that the due-diligence gang was put off.

Sasha Nagy: Murray, in scanning the comments to your Saturday essay, it is clear that two polar opposite views exist about Ontario. It got fat and lazy as a beneficiary of Ottawa's handouts. or it has managed fine without its fair share from Ottawa over the years by being largely self-sufficient. Both can't be true. Can you weigh on these two views, perhaps tilting the scales one way or the other?

Murray Campbell: There is a way to reconcile those two views. For years, dating back to Macdonald's National Policy, Ontario manfacturers thrived behind a high tariff wall that forced consumers in the region to buy Ontario-made goods. The equalization scheme established in 1957 formalized a certain reciprocity in which Ontario gave back money to the regions to allow them to provide uniform social services (and, not coincidentally, to have the wherewithal to buy Ontario goods).

This has all fallen apart. First, the U.S.-Canada free trade pact and then Nafta, reduced the tariff wall. Second, Ontario has been hit hard by globalization.

Now, it seems, we're at a point where Ontario is producing fewer and fewer goods at competitive prices and yet it its taxpayers are still subsidizing the numerous have-not provinces.

Sasha Nagy: Murray: Thanks for taking time to answer reader questions. In closing, can you give us a sense of what Ontarioans can expect from Tuesday's budget?

Murray Campbell: Lots of infrastructure spending, it seems, which is good. But in many cases, this spending will simply repair or renovate existing infrastructure so it may not advance the province into a new era. The McGuinty government is hoping for some recognition of its grievances about the gap in spending and services but it's not holding its breath.

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