The Salon is ONW's weekly gathering place where three of Canada's brightest and most respected political strategists - Senator Bob Runciman, Joe Cressy and Richard Mahoney - come together to analyze national issues affecting Ontario.


Richard Mahoney: 

The Ontario economy faces huge challenges. 

Our manufacturing sector forms a relatively smaller part of the economy. Our biggest trading partner and customer, the United States, continues to struggle. 

Like many governments, our federal government brags constantly about its role in creating jobs, with its continued emphasis on the resource extraction sector, particularly oil and gas.

What is the role of the federal government in creating jobs? Is it doing its job properly? What more can be done to help Ontarians adjust to the realities of a 2014 global economy? 

I think the answer starts with this: a lot more.

Governments create jobs directly by employing thousands of people. They create jobs indirectly by creating an environment where business and labour can thrive and cooperate. But there are also key policies they can adopt to help prepare people and build key infrastructure that build a modern economy. 


Joe Cressy: 

Richard is right that the federal Conservative government could, and should, do a lot more on this file. To start with, the federal government needs a manufacturing strategy to protect and create Ontario jobs.

Canada is currently one of a few advanced economies in the world without a manufacturing strategy. The US, Germany, Japan and others all have one. 

The simple reason this is important is because we need to foster well-paying middle class jobs to help stimulate demand for manufacturing products in Canada.

Instead, Stephen Harper has tended to employ a low-wage strategy, primarily witnessed by the rise in temporary foreign workers (nearly 400,000 of them in Canada today) which brings down wages and in turn demand for all. 


Senator Bob Runciman:

The real challenges facing Ontario have, to a significant degree, been brought on by a decade of bad economic policy by the current provincial government, starting with the decision increase corporate taxes immediately upon taking power. The Harper government has consistently lowered corporate taxes.

World Bank figures show that we are in the top 10 in terms of competitiveness of corporate taxes of 185 countries surveyed.

And last year Forbes Magazine ranked Canada the best country in which to do business.


Richard Mahoney:

I think Bob's response displays the problem that this government has when it comes to the economy. Hundreds of millions of dollars are spent on government advertising on how great the government is on the economy, anchored by an ideological belief that somehow reducing corporate taxes will do the trick. 

Ontario already has very competitive corporate tax rates - among the lowest in the industrialized world, and lower than many US states.

The CPC wastes Canadians' hard fought dollars on government advertising, including spending millions telling Canadians about the Canada Jobs Grant - a program that does not even exist - instead of making investments in our economy.

What we need is a strategy to attract advanced manufacturing. Conservatives seem to believe government has no role, and criticize government policies that pursue these ideas, such as the Wynne government's recent announcement that attracted 1700 advanced manufacturing jobs by Cisco.

We need a national advanced manufacturing strategy, not more tax cuts.


Joe Cressy:

I have to say, the longstanding tradition of federal Conservatives to bring up the notion of lowering corporate tax cuts as the solution to everything and anything is rather tiring. It's also false. 

Canada has 300,000 more people unemployed today than before the 2008 recession, and the majority of them are in Ontario.

Meanwhile, corporate tax cuts have been dolled out without any strings attached,  without any accountability for those receiving the tax cuts to actually create jobs. 

Here's a different way to do it. 

Take youth unemployment, for example. Youth unemployment is double the national average, and in Ontario the youth unemployment rate is around 20%.

Rather than simply giving out corporate tax cuts, how about tying tax credits to job creation for youth. Create incentives whereby businesses (large and small) can receive support for every young person they hire. It may not be the most radical idea in the world, but it would work.


Senator Bob Runciman:

It's tough to fathom Richard's defence of the Wynne govt, citing one lonely success story when the province has lost roughly 300,000 manufacturing jobs during the McWynnety govt's tenure. 

The federal govt is doing its part to increase employment across the country. The 2013 budget extended and expanded the Hiring Credit for Small Business, which will benefit an estimated 560,000 employers. They froze the Employment Insurance premium rates for 3 years, leaving $660 million in the pockets of employers and workers in 2014 alone. And they increased the Lifetime Capital Gains exemption to make investing in small business more attractive. 

And I should mention the Canada-EU trade agreement that, when in force, is estimated will create 80,000 new jobs. 


Richard Mahoney:

This debate is interesting in that, while the Conservatives spend millions telling us that job creation is their number one priority, their ideology tells them that government does not have a huge role to play in the economy, thus the focus on corporate tax cuts. 

I think another important example of where Liberals and Conservatives will differ is on a national education and training strategy. Justin Trudeau outlined some ideas on this in a recent meeting with Premier Wynne.

We need the federal government at the table in Ontario to ensure we have the best educated and best trained workforce in the world.

And we need the feds there to make sure the middle class can afford to get that education. 

You won't see those kind of ideas from Mr. Harper and the Conservatives, but we do need leadership in that area, too.


Joe Cressy:

In my earlier comments I talked about how the federal government can protect and create Ontario jobs today. I'll conclude by mentioning that the federal government can also work with Ontario to invest in the jobs of tomorrow - jobs in the clean energy economy.

The clean energy economy is where the jobs of the future will be. Other countries like China and Germany are already way ahead - it's time for Canada and Ontario to get serious. And we can do just that.

The federal government could invest in and work with Ontario to expand renewable energy and build a smart grid. They could invest in energy conservation by re-establishing the eco-energy program - a program that the Blue-Green Alliance estimates could create 25,000 jobs in Ontario. And, they could work with Ontario to build transit infrastructure to get Ontario residents and our economy moving again.

The jobs of the future can be invested in today, and the federal government in collaboration with Ontario, could help lead the way. 


Senator Bob Runciman:

Can't resist commenting on Joe urging the feds to jump into the disaster of Ontario's green energy policy, especially when discussing the need for jobs in Ontario. 

The McWynnety govt has instituted an energy policy that is driving away investment. Just look at the numbers from the 2011 provincial auditor's report. Most startling are his comparisons of the cost of renewable energy In 2010 versus 2018 projections. 

For a convenience store, the monthly charge attributable to renewable energy in 2010 was $38. It will be $500 a month in 2018. For a large industrial operation, the 2010 number was $200,000, going to a staggering $2.4 million a month in 2018. That's just the renewable energy part of the electricity bill. 

And you wonder why Ontario's bleeding jobs as companies like Heinz and Kellogg are fleeing the province? Joe clearly has his head in the sand.

We see the impact of these insane policies right here in my hometown of Brockville, right on the US border. The city's economic development officer was recently quoted bemoaning the fact that local companies are being lured by New York State pitching much cheaper energy costs.

Capital is mobile and will gravitate to jurisdictions that reward success. The federal govt can only do so much in the face of grand social experiments by a provincial govt that continues to ignore the consequences.




About The Salon

Senator Bob Runciman is a Conservative representing Ontario and a former PC cabinet minister under Mike Harris' government; Richard Mahoney is a former Liberal advisor to Rt. Hon. Paul Martin; Joe Cressy works for the Stephen Lewis Foundation.
Posted date : January 22, 2014

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