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So what is Justin Trudeau doing for Ontario's economy? The PM has been in Alberta, and in recognition of the hard times that province is going through due to falling oil prices, has promised federal help. But what about Ontario? Many say this province has still not recovered from the collapse of the manufacturing sector. Richard Mahoney, John Capobianco and Kathleen Monk are in the ONW Salon.

 

Richard Mahoney:

The Trudeau government has been, and likely will be preoccupied with the challenges facing our economy since well before the last election campaign. In fact, one of the decisive issues of the campaign was the debate over whether our economy required stimulus, and whether or not the country should run a deficit in the short term to stimulate the economy.

As many will remember, the Conservatives and the NDP promised a balanced budget immediately, and the Liberals argued, I believe correctly, that our economy faced challenges, that not enough jobs were being created to ensure the kind of growth we need, and that the historically low interest rate environment justified running modest deficits in the short term to help get things moving. So they proposed, and were elected on, a program to invest massively in infrastructure - green infrastructure, public transit and social infrastructure to create jobs and improve our quality of life.

The government is currently preparing a budget that will likely provide funding for many of these projects in Ontario, and across the country. The Ontario economy does face challenges with the hit to its manufacturing sector over the last decade and the government is moving to meet those, in cooperation with

the Wynne government. Many worthy projects have already been identified by communities in Ontario and by the Ontario government. Those processes continue and we can expect some major progress on funding these in the federal budget, expected in the next month or so.

 

John Capobianco:

The PM should be preoccupied about the economy - it is the single most important issue next to the safety and security of our citizens and both became very significant election issues. Richard is right, the Conservatives and the NDP both campaigned on balanced budgets, which I still believe was right. While the current PM campaigned on creating a $10 billion deficit year over year in order to cover the promises of massive infrastructure spending, we are now seeing that this number will be higher - in fact, a lot higher.

So, with a majority in the House, the PM pretty much has the opportunity to start spending on massive infrastructure programs. He has been busy meeting with all the major city mayors and provincial Premiers, suggesting money is coming. But there hasn't been any sign of solid commitments and it is starting to wear thin with various municipalities and provinces.

As they often say, the time for the rubber to hit the road is now. I do agree with the PM's plan to spend money on infrastructure, but we cannot wait much longer. His commitment to spend in Alberta was a promise made by the former Conservative government - time is of the essence.

 

Kathleen Monk:

It would be hard to find a Canadian these days who isn't concerned about the economy. Public opinion research shows that Canadians are increasingly concerned about the economy of the country and their own personal finances. The situation in Alberta is grim and the Trudeau government sent the right signals by visiting Calgary and Edmonton this month, but the biggest signal this government will send will be in the federal budget.

As Richard and John both note, pre-budget consultations have been happening across this country at different levels but I think for Ontario, the need to hear something meaningful for the manufacturing sector is clear. A commitment to grants for new investment or to streamline some efforts to attract business to our province is necessary. The Wynne government already has a grant strategy that the feds could adopt.

Also, now that the election is over, Trudeau can look to some of the good ideas from other parties – consider the NDP’s innovation tax credit or the suggestion from many that the TPP should not be ratified.

 

Richard Mahoney:

It is a little rich for the Conservatives to fault Justin Trudeau’s government for not getting done in 100 days what they failed to do in 10 years. More importantly, these are public funds, and it is appropriate to consult with communities and provinces about which projects are the priorities, which projects will create jobs now, and which ones will help us in the longer term.

Those longer term projects will likely include large public transit and transportation projects. They will also probably include measures to help the Ontario economy build advanced manufacturing capacity, taking advantage of the lower dollar.

Secondly, the government must get authority from Parliament to invest money on the public’s behalf, and that must come from its first budget, which as I mentioned is expected in the next month or so. I think you will see a relentless focus on this, listening to Canadians and their communities first and then acting.

The important thing is that the plan is there and that the priorities of Ontario will be met and funded, subject to the limits of a proper fiscal plan. But we can expect significant new projects to be funded this year, with a focus on growing the Ontario economy - transit projects such as the massive expansion of transit in the GTA, light rail extension in Ottawa, and renewal of a lot of existing infrastructure that needs it.

 

John Capobianco:

Richard, you may recall that it was the former Conservative government under the leadership of the late Jim Flaherty, as Finance Minister, that saved us from one of the worst global economic disasters and ensured we were leading the other G7 countries out of the economic chaos. You will also recall that we were often mentioned by other countries as the gold standard from which other jurisdictions could learn.

That said, I am not faulting the PM - I actually want him to succeed for the sake of our economy. But this is about managing expectations. When you make grand promises and hold very public meetings with mayors and Premiers announcing big plans for distributing money, there is an expectation that things will move faster - or at the very least that you will reveal a strategy on how it will be distributed.

Kathleen mentions the Ontario grant strategy.  I am not sure the Ontario grant strategy is the right way to go, but I am on side with Kathleen's suggestion of having some strategy for distributing the funds. Earlier this month, Minister Sohi released an update that stated the government's plan to double infrastructure investments over the next ten years. However, the Minister also stated the investments will be made rapidly and would be based on a fair share plan per region.

Obviously Ontario, with its significant economic challenges particularly in the manufacturing sector, will be key player on how this will unfold and it is asking for considerable financial assistance.

You both mention the upcoming budget and I agree that it will be a very important document. All budgets are important, but since this is the PM's first, and given the state of the economy with higher than projected deficits, it will be one to watch. As I said, I do wish the PM success.

 

Kathleen Monk:

It’s true John, 2016 will be a budget to watch. Almost as closely as we watched the re-written budget in 2009 following the last economic (and almost political) upheaval.

The good news is there are many good ideas out there that the government can adopt. The bad news is the Canadian economy and the Ontario economy in particular need much attention. Other countries - our competitors - have done a better job at harmonizing their business investment strategies so companies don’t have to shuffle from one level of government to another when contemplating investment.

We need the government to come forward with a jobs plan for the manufacturing industry here in Ontario. Strategies for the auto and aerospace sectors were notably absent from the federal Liberal platform, especially considering that both sectors are major employers in Ontario. Now that the Liberals take much of their political strength from the province of Ontario it would be wise to think through how best to shore up these sectors and attract new investment.

Regardless of whatever partisan stripe you are, there is an expectation that the budget will address the infrastructure deficit. That’s a good thing. Canadians resoundingly embraced the idea of more infrastructure spending in their communities in the last election. But the government could increase the impact of the investment by ensure local hiring requirements – especially among young workers, aboriginal workers, women in skilled trades, minorities etc.

Also removing any pre-requisite for private sector involvement for government funding and ensure there are made-in-Canada materials used in the projects are ideas that merit serious consideration.

Ontario families need a boost from the Trudeau budget – here’s hoping it delivers.

 

 

 

 

 

 

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Posted date : February 17, 2016
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