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                                                           Wynne And Job Creation:

                                New Sitting Provides Unique Opportunity To

                                           Study How Best To Create Jobs

 

 

By Susanna Kelley

Fresh from a weekend pep talk from Kathleen Wynne stating job creation will be her number one priority, Liberal MPPs join their PC and NDP colleagues today for the new Legislative sitting. 

As the Legislature resumes, with the inevitable political gamesmanship playing itself out in the short term political cut and thrust of the daily Question Period, it is a worthwhile exercise to stand back and look at the big picture: where the province stands and the Liberal prescription for moving the it forward both economically and socially.

Ontarians, in the next four years, are in a unique position to assess what works best when it comes to creating prosperity - the greatest good for the greatest number.

Just before the last election in June, OntarioNewsWatch presented a documentary laying out the various theories on how to create jobs. Speaking to a variety of experts and politicians of varying stripes, it traced how their particular political would go about trying to create work and lower the province's stubbornly high unemployment rate, which has bested the national average since xxx months. 

Some of those prescriptions have been tried in the last two decades; some have been frowned upon and put on the back burner.

Excluding the massive globally co-ordinated spending spree embarked upon deliberately to avoid a world-wide economic crash in 2008, Canada and much of the world has spent the last 25 years contracting the role of government as a result of implementing the Reagan-Thatcher economic agenda. 

Other than in education and health care, expansion of government programs as a prescription to equalize wealth ended in the 1980s in the U.S. and Britain, and by 1990, Canada was following suit. Former Liberal Prime Minister Jean Chretien, with his finance minister Paul Martin, spent the 1990s cutting transfers to the provinces, which in turn caused Ontario and the other provinces to shrink social services as they downloaded many of them to municipalities. That level of government had few ways to increase revenue, and anyway, raising taxes was simply out of vogue. Hence even governments on the left of the political spectrum, such as Bob Rae's NDP, ended up cutting spending even in health, closing entire hospital wings for fear the province would go bankrupt as New Zealand had (check). This deepened a recession that was already seeing unemployment top 16% in Ontario, while interest rates skyrocketed to 22 %, causing businesses to stop investing.

Mike Harris' 1995 to 2002 (? check!) government, ideologically in tune with the Reagan-Thatcher revolution, had little appetite or patience for any substantive role for governments in helping to create jobs. Harris and his followers believed the market did the best job of that, and governments could help most by interfering least and keeping as much money in the pockets of Ontario taxpayers as possible, believing their spending would create economic growth and jobs. And so they cut welfare rates by 22%, taxes by 30%, spending by more than $11 billion and laid off teachers and other public servants.

Even Dalton McGuinty, when he came to power, banked mostly on creating a highly educated workforce, including at the community college level, as the way to lure investment to the province and keep it here as his primary way of sparking employment. He did give away billions in targeted corporate "help" such as that to the auto industry to keep the companies and their jobs from moving out of the province. That Mr. McGuinty spent heavily on infrastructure during the 2008 recession on infrastructure to keep Ontarians at work and off welfare was a policy he quickly abandoned as soon as the 2011 election was over, proclaiming austerity as the way to go and saying the budget needed to be balanced as soon as possible. A Keynsian approach, perhaps, but a fairly drastic version: Keynes advocated spending in hard times and paying back in good times. Whether we are really in good times in Ontario right now is debatable.

 So looking back, what has actually worked?

 It's not totally clear. The Harris Tories will tell you that their solution worked: that within several years of his 1995 election, Ontario was coming out of the recession because of Mr. Harris' austerity economics. Others say it was just the U.S., on which we were very dependent for trade, pulling us out of the recession as it became healthier. 

Liberals will tell you that under Mr. McGuinty, Ontario gained back all the jobs it had lost in the 2008 recession. But again, there are those who disagree, saying those jobs are much lower paying, have little security and many are only part time. 

Which brings us to Premier Kathleen Wynne's approach.

Ms. Wynne is clearly of the opinion that government has a big role to play in the economy. Not only has she continued Mr. McGuinty's approach of targeting specific industries for government largesse, she is pumping money into wages for those delivering social programs, such as daycare workers. This is another way of creating jobs: in Brantford, where Massey Ferguson was the community's largest employer, it is now public services like the hospital that provide the most jobs.

Ms. Wynne's approach has some very important precedents in North America. In the US, during the Great Depression, Franklin Delano Roosevelt kick-started the US and the world's economy with his New Deal policies. In Canada, during recessions in the 1970s, Pierre Trudeau created "LIP" grants and other programs to enable young people to start up their own businesses. In FDR's case his policies got the world's largest economy working again. But in the case of Pierre Trudeau, some blame his government's deficit spending in the 1970s for prompting the cuts in transfer payments made by Jean Chretien's 1990's government, arguably making Ontario's recession much worse.

Ontario has seen the free market solutions of the Harrisites and the reluctant Keynsian spending of the McGuinty government, followed quickly by it's austerity plan.

Now it will witness something that's been on the back burner for decades in something other than an global economic meltdown - a government doing it's best to kick-start a sluggish economy with government spending. 

At a time when the austerity programs of some European nations are being blamed for a possible slide backwards, this province is heading in the exact opposite direction.

It will be a fascinating four years, with Ontario as the nation's incubator. 

 

 

About Susanna Kelley

Susanna Kelley is Editor-in-Chief and Queen’s Park Bureau Chief for Ontario News Watch. A veteran political and investigative reporter, documentary-maker, host and media commentator, Susanna oversees and has final editorial control over all news production at Ontario News Watch. Susanna has reported for the CBC, the Canadian Press and served as Queen’s Park Bureau Chief for TVOntario for 13 years. She has also hosted a number of documentaries for CBC’s The Current, CBC Radio News and TVOntario’s Studio 2. Passionately dedicated to excellence in political journalism, and having covered both Parliament Hill and Queen’s Park, Susanna believes quality political reporting is essential to a healthy democracy. You can find Susanna here: @susannakelley
Posted date : October 20, 2014

View all of Susanna Kelley's columns
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