Failed government policies ultimate cause of Ontario’s dismal fiscal, economic performance
By The Fraser Institute
The roots of Ontario’s decline from economic powerhouse to economic laggard can be found in a decade of failed government policies, concludes a new study released today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.
“For decades, Ontario was the economic engine of Canada with workers enjoying high incomes and low unemployment. But today, Ontario is less competitive, less prosperous and less attractive for both workers and business investment,” said Philip Cross, former chief economic analyst for Statistics Canada and author of Ontario—No Longer a Place to Prosper.
For example, every year since 2003 Ontario’s economic growth has lagged behind the national average, helping send the unemployment rate above the national average for the first time ever.
In 2012, per-capita incomes fell below the Canadian average—again, for the first time ever.
The provincial government continues to implement policies that impede economic recovery and hinder competition. For example, a 50 per cent minimum wage hike added to the highest labour costs in Canada. Thanks to ill-advised energy policy, the cost of electricity has skyrocketed—for both Ontario households and businesses—and is now the highest in Canada.
And an upcoming mandatory provincial pension plan promises less take-home pay for working Ontarians.
Meanwhile, successive Ontario governments continued spending beyond their means, doubling Ontario’s debt to $287.3 billion in 2014. Ontario now spends $11 billion per year on debt interest payments—almost 10 cents out of every revenue dollar.
In response, people are “voting with their feet.” Since 2004, more people left Ontario than moved to it from other parts of Canada.
The exodus includes young Ontarians who’ve been hardest hit, with a 16 per cent youth unemployment rate—more than 10 points above the adult rate, the largest such gap in Canada.
“People, especially young people, are leaving Ontario for better opportunities elsewhere yet the government at Queen’s Park doubles-down on policies that are chasing people away,” Cross said.
Finally, since 2002, public-sector payrolls in Ontario have grown by nearly one third. And government investment in utilities and transportation has surpassed private-sector investment in manufacturing and finance as the leading source of investment in Ontario.
“Ontario’s government policies mistakenly signal that the public sector, not the private sector, is the engine of economic growth. Canada’s leading province has become a laggard—a fact that should concern all Canadians,” Cross said.
The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of think-tanks in 87 countries.
Story originated at The Nelson Daily.
Comments