Skip navigation

Earlier Discussion

Ontario's back is to the wall

Continued from Page 1

Sasha Nagy, Murray: Thanks for taking questions today. Your Saturday essay neatly summarized the issues facing Ontario, and by extention the rest of the country. Clearly, the job landscape in Ontario is moving into uncharted waters. Today, more than 70,000 jobs losses globally were announced across all sectors. Clearly there are no quick fixes to this economic crisis. Are their any immediate signs that Ontario will benefit from Barack Obama's move into the White House?

Murray Campbell: Thanks, Sasha, for inviting me. It's a large, and rather daunting issue, to deal with but it's also crucial to the functioning of the federation.

As to Mr. Obama's impact, the thinking at Queen's Park at this point is that he will certain push a green agenda, which might offer opportunities for Ontario businesses, but there is some concern about whether he will be influenced by the protectionist instincts of Democratic politicians, particularly in northern tier states.

That said, the McGuinty government does have some solid ties with Obama officials. One of the President's senior advisers, David Axelrod, worked with Mr. McGuinty nearly a decade ago to bring out his inner politician and Cass Sunstein, a senior official on regulatory matters, dropped in to see the Premier when he was in Toronto a few weeks ago.

The first chance to see which way the new administration is leaning will come in February when we see the outline of the U.S. plan to rescue the auto industry. If it gives short shrift to Canadian production, that could mean problems.

Bob London: Why is the focus on the federal government's budget when Ontario's suffering is self-induced. We are the least competitive tax-wise, both corporate and personal. The property tax rate increases during Liberal and NDP reigns were substantial and the fees and other levies were increased dramatically including WSIB. Why has there been no focus on these matters? Or does Ontario prefer not to admit that it has a spending problem?

Murray Campbell: Bob London: I would never argue that the McGuinty government has personfied spendthrift government. After all, its revenues soared after 2003 and it now has about $30-billion more to send than it did five years ago.

It certainly could have used that windfall to reduce corporate and personal taxes but it reasoned that it was elected in 2003 to repair tattered social services and that it couldn't abandon that task. This is why the government chose to institute the health premium (and take the political hit that resulted) rather than hold the line on spending.

You may ask how it is that other provinces manage to maintain social programs while cutting taxes. The answer is one word: equalization. Quebec, for example, receives about $6-billion a year in redistributed money under that scheme.

Nathan Weatherdon: Given the relative stability of the Canadian financial sector, and considering the number of international cities that seek to become finance hubs, do you think there are particular strategies Ontario can take to enhance opportunities in its financial services or banking sectors? Perhaps more importantly, since many of the lost jobs will be among skilled workers in industry, I'd be curious to hear your opinion on the possibilities of these workers being retrained to work in alternative energies producing components for wind and solar generators. Where might these people going to be working in two or five years time, and what can the government go to help make sure they can take advantage of the opportunities that may present themselves? What kinds of companies might see particular advantages in what they Ontario labour market has to offer, and are these endowments unique or valuable enough to bring them to Ontario despite having such a costly currency?

Murray Campbell: Until last September, it seemed that the critical factor in building a booming financial sector was to have as few restraints as possible. The experience since then, in Britain and the United States, for example, suggests this may not be the wisest course. Ontario has great pools of capital and the financial services sector will thrive, in the long run, but it's a bit too soon to speculate on the amount of regulatory oversight that will be needed.

Recommend this article? 4 votes

Back to top