The Ontario Chamber of Commerce feels steering Ontario’s economy through tough economic times will require political leaders to redouble their focus on reducing red tape and bringing down the deficit. With the election behind us and a minority government in place all the parties must now work together on policy priorities most integral to the province’s economic prosperity. In a detailed pre-election survey conducted by the Ontario Chamber of commerce businesses weighed in on their key policy needs identifying the following policy priorities.
Business understands that Ontario is facing a large deficit, increasing energy costs and crumbling infrastructure, and a tremendous challenge in cutting costs while maintaining key public services. For Ontario to confront the challenges that lay ahead, its political leaders must develop innovative ideas on how to tackle the top priorities of the business community ? red tape, debt and deficit reduction, transportation, innovation and R&D, and energy affordability and sustainability. Success in these times will depend on bold leadership by Ontario’s political leaders and its business community. Raising taxes to address the structural deficit is not sound economic logic. Strengthening Ontario’s tax advantage brings foreign direct investment and jobs to the province.
The next Ontario government should stimulate growth in this time of uncertainty by striving for greater efficiency and effectiveness in the delivery of public services. The public sector review announced in the 2011 Ontario Budget should help with this process.
Ontario’s transportation system is one of the most congested and inefficient in the world and the new government will need to address this situation through targeted support for reliable and sustainable transportation infrastructure. Studies indicate that the demand for travel will exceed the capacity of the existing regional transportation network over the next two decades. The result will be increased congestion, constrained economic growth, higher fuel consumption and air pollution, and a lower quality of life.
The new government has the complicated challenge of managing health care costs to avoid negatively impacting investments in other public services. The ability to manage health care costs is critical to making strategic investments in economic priorities such as R&D and energy.
Ontario’s future economic growth and prosperity will depend on our ability to remain competitive in an increasingly global marketplace. A stable, abundant and affordable energy supply is fundamental to Ontario’s competitiveness. The industrial hydro rate has been cited by many companies as the main reason for closing the doors to Ontario facilities, especially in Northern Ontario. The Government of Ontario needs to get on with the long outstanding nuclear new build project for Darlington. It will also need to provide a long?term plan for supply and energy affordability and investment in new energy infrastructure such as green energy.
For several years in a row Ontario businesses have indicated that reducing red tape is a key priority for strengthening Ontario’s economy. It is imperative that Ontario’s government advance regulatory reform as a priority to drive economic growth. The annual cost associated with red tape in Canada is an estimated $30 billion; regulatory reform is not simply about reducing the number of rules. The government must adopt a new culture which recognizes businesses as valuable partners in achieving higher social and environmental standards. The provincial and federal governments have been actively seeking new free trade agreements with other countries. This strategy only makes sense if accompanied by efforts to reduce market restrictions at home.
All levels of government – municipal, provincial and federal – must work together to ensure consistency in the application of regulations. A one?size fits all approach to regulation is out?of?step with the needs of the business community. Ontario needs an approach to regulation which encourages business?led solutions to social and environmental sustainability.
Ontario emerged from the recent economic downturn in the worst fiscal position of any province or territory in the country. The provincial deficit is expected to be $16.3 billion in 2012. Prior to the election the McGuinty government pledged to return to balanced books by 2017?18. The new government needs to look to accelerating the pace for balancing its budgetary deficit to 2015?16 to maintain Ontario’s dept?GDP ratio in a reasonable range over the next five years.
Municipal governments provide many key services needed for economic development, but are financially over?burdened by spiraling operating costs such as public sector wages. The new government must ensure that municipal governments have the capacity to stimulate regional economic growth through greater accountability measures and wage restraints.
It is crucial that Ontario’s government support the private sector’s role in economic growth by providing the critical infrastructure, incentives and opportunities required to foster investment, innovation, and high?value jobs. Canada continually receives low rankings on its innovation performance, with Ontario businesses consistently investing less in R&D than other jurisdictions. Innovation must be market?driven to be effective.
Ontario’s government needs to work closely with business to address the key barriers to innovation. Many small firms find that innovation is out of reach for them. Ontario’s new government must help small Ontario firms leverage their capabilities through enabling strategic partnerships with innovators. Adequate financing, whether in the form of R&D programs or venture capital, is key at all stages of the innovation process. Ontario’s new government must support innovative ventures through a healthy mix of innovation financing
Now is not the time for business as usual!