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Earlier Discussion

Ontario's back is to the wall


"Canada's most populous province is dealing not only with the economic crisis that has raged since last autumn but also with a profound structural change in the key manufacturing sector," The Globe's Queen's Park columnist Murray Campbell wrote Saturday in his Globe essay Ontario's back is to the wall

"Ontario remains the country's 800-pound gorilla by virtue of its size, but most economic indicators show that it is in distress.

"The question posed last summer by the TD Bank — 'Are the wheels falling off the Ontario economy?' — has been answered in the affirmative.

"And, on the eve of Finance Minister Jim Flaherty's pivotal budget presentation on Tuesday, there are loud calls from economists, government officials and business leaders for the federal government to recognize Ontario's plight — if only out of its own self-interest."

Mr. Campbell quotes provincial Finance Minister Dwight Duncan as saying: "Given the fact that Ontario is still 40 per cent of the economy, as Ontario goes, so goes Canada."

Mr. Campbell goes on to write:

"Ontario's situation is different from provinces whose fortunes are suffering because of a global slump in commodity prices, such as Alberta.

"The arc of Ontario's decline can be traced to the crumbling in the past decade of the pillars of its industrial base.

"The U.S.-Canada Auto Pact, which spurred the growth of the auto industry in Ontario after 1965, was overruled in 1999 by the World Trade Organization. (At that point, Canada had a $22-billion auto trade surplus in vehicles and parts, but it's now in a global deficit by nearly $15-billion.)

"Two years later, in the wake of 9/11, the relatively free access to the U.S. market that had begun with the 1988 bilateral trade pact and had accelerated with NAFTA in 1994, began to erode, as Washington chose security concerns over commercial interests at every opportunity.

"These developments, combined with surging energy prices and a strong Canadian dollar, shook Ontario's economic foundations.

"In the past five years, more than 200,000 manufacturing jobs have disappeared and 10,000 more in the forestry sector . . .

"There's one thing that Mr. McGuinty could do for himself.

"The Ontario Chamber of Commerce, among others, is urging the government to harmonize its sales tax with the federal GST, saying it could save businesses $100-million a year.

"The Premier has been lukewarm to the idea, because he fears it would hurt ordinary consumers by putting a tax on home heating oil, children's clothing and books.

"But yesterday, he said he would take a serious look at the proposal in light of Ontario's ailing economy.

"We will find out Tuesday whether Mr. Flaherty will show similar flexibility in helping his home province.

Whether you agree or not, it's a fascinating debate, so we at are pleased that Mr. Campbell will be online today from 12:30 p.m. to 1:30 p.m. ET to take your questions on his essay, on Ontario politics and on the federal budget Tuesday.

Join the Conversation at that time or submit a question in advance.

Your questions and Mr. Campbell's answers will appear at the bottom of this page when the discussion begins.

Mr. Campbell has written The Globe's Queen's Park column since 2002.

He joined The Globe in 1977 after earlier experience at The Toronto Star, Ottawa Citizen and in England.

In his career with The Globe he has worked in a wide variety of positions, including city editor and sports editor.

He served as bureau chief in both Los Angeles and Washington in the 1990s. Since then, has worked as a national and foreign desk reporter, both based in Toronto, and as a feature writer.

In reporting from five continents, he has covered innumerable elections, four Olympic Games and the aftermath of the 1994 genocide in Rwanda.

He was a Southam fellow at Massey College in the University of Toronto in 1983-4 and won The Globe's Stanley McDowell award for writing in 1992 for his coverage of (among other things) the L.A. riots and the U.S. presidential election that year.

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