Jeffrey Simpson provides some good sense in
a column in the Globe and Mail but he doesn't go quite far enough back.
Ontario began to go 'wrong' - and it is near heresy for a Conservative to say this - about 40 years ago, when Bill Davis,
Brampton Billy, good ol'
"bland works" Bill Davis began to overspend
circa 1975. At first Davis' overspending wasn't obvious - Ontario still had balanced budgets based on good, solid industrial growth. The 1977 "Bramalea Charter" which promised more and more
social spending, including lower cost, lower middle class housing support was very much in line with Pierre Trudeau's thinking in Ottawa. Both were "short term gain" type politicians who thought that growth was a
natural state of affairs. Anyway, except for a short
interregnum (Mike Harris' first term (1995-99)) Ontario has remained poorly, often badly, governed by Conservatives, Liberals and NDP governments alike. Ontario needs to recover from 40 years of less than adequate, too often downright poor leadership and management.
Here are some of the key elements of Jeffrey Simpson's column:
"Attached to the last budget, the provincial Ministry of Finance added a 191-page door-stopper about the long-term economic challenges. Of course, the document was gilded with political gloss, but fighting through it
did offer a sobering portrait, one almost entirely absent from the campaign.
Start with economic growth after inflation. From 1982 to 2013, it averaged 2.6 per cent. From 2014 to 2035, it will be 2.1 per cent. Roughly speaking, therefore, growth will be about 20 per cent slower.
The labour force will grow more slowly largely because of an aging population, a change being felt throughout Canada. Labour productivity will be flat at best, and quite likely lower than from 1985 to 2000.
In the meantime, global competition will intensify.
Manufacturing has been declining as a share of the economy in North America and Western Europe. Ontario’s decline was halted temporarily back when the Canadian dollar plunged to nearly 60 cents,
but those days are long gone.
The province’s cost competitiveness – this is one of the two or three central challenges – has been poor. Unit labour costs have gone up by a little over 5 per cent per year over the last 13 years, compared with just
over 2 per cent in the United States.
When a province’s unit labour costs rise more than twice as fast as the country where it does 78 per cent of its trade, the results are obvious: plant shutdowns, unemployment and not enough new capacity added.
Automobiles are the classic case: plant openings in Mexico and the U.S., but none recently in Ontario.
Business investment in machinery and equipment has lagged the Canadian average and is far below the United States. Research and development, a pathway to innovation, also lags. It’s better than the very poor
Canadian average, but far below the U.S. Take away the healthy financial sector and the Toronto’s overheated housing market, and what do you have?
In Toronto and Ottawa, where prosperity is sustained, it’s easy to forget the swaths of the province in the southwest, north and east, where very little new economic activity has been taking place. The old industrial cities –
Hamilton, Windsor, St. Catharines, Thunder Bay, Sudbury, Sault Ste. Marie – and smaller cities, such as Leamington, are nearly all suffering in one form or another.
For most of the past quarter-century, Ontario provincial governments have run deficits. Slowly, the debt has risen. Such is the situation that Ontario now receives yearly small payments from the country’s
equalization scheme. (And such is the absurdity of the scheme that Ontario taxpayers remain net contributors to Ottawa, which then turns around and gives a small portion of the revenues back in equalization.)
The Ontario government has reached far, but failed to execute: clean energy, gas plants, e-health, Ornge air ambulance, nuclear cost overruns. No wonder trust in government is low. For almost a decade,
the Liberal government let health-care spending rip – 7-per-cent yearly increases without commensurate improvements in the system.
Very, very powerful – and very, very conservative – public-sector unions and associations in schools, universities, health care, policing, firefighting and municipal government make change very, very difficult.
Taking on these interest groups has frightened governments, which have preferred to buy peace instead.
Ontario’s domestic raw-material or hydro energy sources are just about tapped out. An important boost could come with exploitation of the Ring of Fire chromite deposits in the province’s far north, but this project
and others will be tied up for years, even decades, by aboriginal claims."
Those are sobering facts, and they are facts, not guesses, and the situation needs to be reversed.
(By the way, I'm sure the Conservatives and the Greens and the NDP are equally immoral.)
