Thursday, August 02, 2007

Ontario Liberals and the Ontario Economy

Rest assured, Dalton McGuinty and the Ontario Liberal Party will be pointing fingers.

National Post, Ontario could lose its 'have' status

Perhaps the most startling element of the report, written by Global Insight managing director Dale Orr, is how far Ontario has fallen in terms of economic growth per capita, which is how standards of living are measured. This may not bode well for the province's Liberal government, which faces an election in October. Premier Dalton McGuinty's government has been under attack from economists who say the province's tax regime is not competitive in terms of attracting business investment and, as a result, its economy has suffered.

Toronto Star, Ontario's economy a concern

In an historic first, the province's unemployment rate has been higher than the national average for six straight months this year and now stands at 6.5 per cent, compared to 6.1 per cent nationally.


And in another historical first, Montreal now has a lower unemployment rate than Toronto (6.5 per cent compared to 6.9 per cent).

CBC, Ontario getting poorer, while N.L. shines: economists

Ontario's economy will face more sub-par growth this year, while Newfoundland and Labrador's will grab the top spot, according to two major banks' provincial forecasts released Friday.


BMO Capital Markets foresees Ontario's economy facing such challenges that "it is fair to ask whether Ontario truly is still a so-called 'have' province," pointing out that the province's jobless rate has, for the first time ever, moved above the national average over the past year.

Financial Post, Ontario tax policy no friend of growth

Mr. McGuinty is, of course, a pro at taxing, having slapped Ontarians with a $1.6-billion health "premium" soon after taking office and instituting the first corporate tax increase in 18 years. With sublime timing, he hiked the general rate to 14% from 12.5% in 2004 and the manufacturing rate to 12% from 11% -- just as the province was sliding into a manufacturing recession as the loonie soared.


Ontario has a combined federal/ provincial corporate tax rate of 36%, compared with 32% for Quebec and an OECD average of 28%. Ontario's marginal effective tax rate, a broad measure of the investment tax burden, is the highest in the country at 37%, compared with 25% for Quebec.

Past behaviour is the best indicator of future behaviour, you know.

At any rate, all this economic doom and gloom aside, the always comical Ben Chin, a failed Liberal Party candidate, has an amusing YouTube newscast spoof up where he's playing a wacky newscaster - it's both funny and ironic.

Count on your Ontario Liberals to shine out like a shaft of gold when all around it is dark.


JimBobby said...

Whooee! I ireckon Ontariariario is way more dependent on the manufacturing sector than other regions. Manufacturin' jobs have been movin' south ever since NAFTA. With China in the picture, jobs are movin' east -- not just here in GintyLand but across North Merka.

Gummints always like to crow when things is good -- even when gummint policy had nearly nothin' to do with a boomin' economy. The flipside means they gotta take some heat when things ain't so good.

Federal Finance Minister Martin, the Deficit Slayer, also can be blamed fer some of Ontariariario's grief.

Ginty's a dumbass an' I ain't votin' fer him but I ain't so sure about layin' the blame fer Ontariariario's economic woes on him. Blame him fer breakin' all his promises an' fer wastin' precious Mother Earth time an' money on a nuclear power pipe dream.


Jim (Progressive Right) said...

It's only fair, JB.

If the Ontario Liberals are going to take credit for an economic delusion, they have to take credit for the economic reality.

Anonymous said...

Since the Conservatives have taken power, the Canadian Dollar has increased more than 15%. That translates in to a 15% loss in Gross Margin for goods produce in Canada.

And people are wondering why the Ontario economic is hurting? To compensate for the excessively rapid increase in the Canadian Dollar, Ontario would have to pay manufactures for them to maintain constant earnings.

Allowing the Canadian Dollar to increase so rapidly is just plan economically irresponsible. Even before the the death blow by the rapid dollar inflation, manufactures were suffering from high personal living costs. High personal transportation and housing costs translate in to higher required wages. Asian has a much more efficient personal transportation system, "public transit" and housing property system. In efficiencies in these areas are effectively preventing competition with Asia.

Ontario's competitive efficiency has came is through small manufactures located close to suppliers and close to markets. China now has an enormous number of small manufactures located close to suppliers and with access to container shipping to reach world wide markets.

tdwebste said...


Please if you can, respond. I would like to know what approaches you would suggest to improve the competitiveness of Canadian Manufacturing.


Simply bitching doesn't put food on your table.

Jim (Progressive Right) said...


My commentary is more on the fact that governments that want to take credit for booming economies must also take the blame for failing economies.

Since the Libs were so quick to jump on the Conservatives for ruining the economy, it's only fair to jump on the Libs.

As to my opinion on what would improve Canadian manufacturing competitiveness? My ideas are somewhat simple.

To start, let's stop loaning huge manufacturers money to build things nobody wants to buy - that makes manufacturers less competitive. I'm not sure when this practice started (all governments are guilty of it), but I'm pretty sure it should end. If a manufacturer cannot produce something somebody wants to buy, then they need to go back to the drawing board and figure it out, before coming forward for handouts.

Let's reduce the corporate tax rate to a competitive level - not necessarily the lowest, but lower than it is now. That way, it's not a consideration for manufacturers when choosing their new plant site. This way, new manufacturing companies mean more jobs, more jobs mean more collected income tax revenue. Annually, review the competitiveness of the corporate tax rate against those revenues.

Let's put more into social services - specifically, health care and education - because those have shown to attract manufacturing jobs. Manufacturers have to invest less in health care plans and training. Plus, that way, when there is a bad economy, people are trained and healthy and they can perhaps do other things in lean times. Let's advertise that fact.

tdwebste said...

Ignoring bitching and wining about who takes credit for what, when. Without and an analytical approach this is just rallying the mob. The conservative mind is the rational thinking mind, not the mob mind. Or does the right have left mob minds supporting different mod leaders.

The capital cost required to construct efficient state of the art manufacturing, quality testing, and development lines are huge and require huge loans. Once these huge capital expenses are purchased and established manufactures are unwilling to pull up and move. So favourable capital loans by themselves are not a problem. The only problem is they are not the complete solution.

However determining whether a business plan is worthy of very large capital loan is not an easy process. Politicians do not have the specific business knowledge required to access the business proposals. Also they are pron to political favoritisms.

The accounting soundness of the business plan needs to be accessed by independent auditors. The independent auditors need to be selected in the same manor as an independent judiciary.

Taxes and Social Services:
Social services such as health care, education are simply more efficient as a social service. However with out monitoring of health care cost and education cost it is quite possible for there cost to be come completely out of line with their corresponding benefits.

Taxes and social services cannot be address separately.
Taxes pay for social services and serve to distribute social cost. Tax administration cost are a drain on the economy. The are like a friction waste. Taxes which are simple and boring are simpler to administrate than taxes designed to win voter support through credits.

Tax neutrality is the measure of how well the after tax costs reflect the real combined individual and social cost. All taxes economic distort individual costs. The degree of a tax's is economic burden needs to be measure not by how much the taxes distort individual cost, but rather how well the cost after taxes reflect the real combined individual and social costs.
For these reasons I support reduced taxes on business capital required for business investment. Instead reducing taxes on transactions. Taxes on transaction uniformly share tax burden according to purchasing power. Taxes on capital make investments the result in capital gain less attractive. And as a result businesses have less access to capital money.
I agree with you income taxes should be reduced and capital gain taxes reduced , preferably eliminated. Instead of reducing the GST other taxes should have been reduced instead. There is an enormous tax administration cost every time the GST rate was adjusted.

Improving Education Efficiency:
Students should not be restricted from based on age or prevented from partaking in both advanced education and technical training. Many adults not only children may benefit from technical training in order to prepare them for employment.
Students preparing for either or both forms of education compete for openings at schools by means of standardized test scores or academic competitions. Secondary schools are required to publish their student's job placement and advanced education records. This allows students and families to select secondary schools which will most benefit their future training and education. A competitive education system ensures students have a rounded education which prepares them to care for themselves and their families in the future. The competitive education system is necessary to discourage schools from being turned into propaganda machines by organized subversives. Organized subversives can never completely take over a school, because once a school's standardized test score falls below an acceptable score, the education training of the school will come under close scrutiny. At first the school should be given the opportunity to hire education consultants to train and assist teachers. If the school does not accept education consultants, the school leadership and perhaps teachers maybe replaced. If the school's standardized test scores do not sufficiently improve within two years time, the teachers of the weak subject areas are replaced. And if the school's standardized test scores do not sufficiently improve within three years time, the school leadership is replaced and perhaps its complete staff is replaced. This intensity of intervention into the school's teaching program prevents education and training from ever becoming secondary. In order to prevent corruption within the competitive education systems it is essential that standardized testing and competitions are fair. Students take standardized test or competitions need to be identified with the same identification reliability as voters are identified. Like voting ballots, test papers need to be secured and examined by examiners with no connection to the students. Test papers must not identify students. This prevents examiners from being influenced by the students identity. Of course for this competitive education system to work, students need the freedom to attend any one of a number of schools.
This freedom to attend one of a number of schools without losing the family care and support is very much dependent on the public transportation system.
Students compete for advanced education openings by means of either standardized test or national and international academic competitions. In the competition for advanced education openings academic competition standings should be given precedence over standardize tests, because they encourage competitive students with more agile minds. Ether methods of selection is better than limiting advanced education to only wealthy families. The number of advanced education openings in each professional field is set by the government of Ontario. The system of competing for advanced education openings insures that sufficient professionals are trained in the required fields such as medical, legal, engineering fields. After students complete University education, they have the option of repaying the cost of their University education in full or working within Canada for 3 to 5 years after graduation. This education repayment allows students to pursue advanced education without burdening families with education expenses they cannot afford. The repayment plan also insures a sufficient number of students pursuing advanced education in the required fields return to Canada. Canada simply cannot afford to invest in advanced education only to benefit another country who did not pay for the student's education. At the same time Canada cannot afford not to invest in advanced education as required to train professionals.
Schools with technical training incorporate job experience with academic training. Familiar examples of this are coop education and teaching hospitals, teaching schools, and apprenticeship programs. Clearly technical training is by no ways necessarily inferior to advanced education. As a result it is expected that many secondary schools may combine advanced education preparation with technical training. Not synchronizing the academic holiday terms of all schools, offers students a better opportunity to compete for job experience employment while providing businesses and public institutions a dependable supply of workers. The constant and predictable supply of workers enables businesses and public institutions to incorporate apprenticeship workers into their regular work force, which in turn improves the job experience prospects of students. This allows year round usage of school facilities and provides students important job experience. This opens schools up to students who could not normally attend schools such as adults wishing to improve their employment prospects. The technical training schools also provide factories, hospitals, teaching schools with a training resource. Teaching professionals of technical training schools focus on the academic aspect of training. While factories, hospitals, teaching schools focus on the practical aspects of training. The technical training schools and factories, hospitals, teaching schools working together will rapidly produce a skill worked force required for the peaceful economic development of Ontario.

Please feel welcome to share this with others, and discuss this freely. If you quote this in full, please footnote me.

tdwebste said...

One note the education section, this was original written with Afghanistan in mind.

"The competitive education system is necessary to discourage schools from being turned into propaganda machines by organized subversives."

Here it is more appropriate to say,
"The competitive education system is necessary to discourage schools from teaching ideology rather than investigative reasoning."