Ontario needs helping hand, Mowat Centre tells federal parties

The next federal government, no matter what party forms it, should develop an economic strategy geared to boosting Ontario, according to a new report from the Mowat Centre.

Such a strategy would not only help the province that is the engine of economic growth in Canada, but help most of the other provinces too, the economic think-tank saidin a study released Monday.

The study puts forward an extensive plan to help Ontario battle the economic headwinds that have buffeted it for the last 15 years, including a low dollar, globalization and rising public debt.

Developed through roundtables and consultations with industry, sector, city and labour leaders, the strategy involves federal-level tools that could be used to build trade and modernize its infrastructure.

The past 10 years have been marked by a steep slide in Ontario's economic fortunes, including the loss of 300,000 manufacturing sector jobs.

Lot of potential

"The province has many existing strengths to build on a well educated population, competitive business environment, safe, vibrant cities and a diversified economy with globally competitive firms and clusters," the study says.

But federal policies fail to work with these advantages, it says.

Ontario has about 38.7 per cent of Canada's population, but enjoys only 34 per cent of federal funding, the study points out. It also sends $11 billion annually, or 1.9 per cent of its GDP, to other parts of the country.

It is particularly shortchanged on infrastructure spending and the return from EI premiums.

Among the recommendations made in the report:

• Allocate the Building Canada Fund on an equal per capita basis.
• Strategically invest in infrastructure that enables trade, investment and innovation, including transportation infrastructure.
• Help cities and provinces create affordable housing so workers can live close to their place of employment.
• Encourage more industry research and development.
• Help Canadian startups commercialize their technology.

Sunil Johal, policy director for the Mowat Centre, says Ontario would get $1 billion extra dollars from the Building Canada Fund if it were allocated on a per capita basis.

Shortchanged on infrastructure

He believes bottlenecks such as the traffic congestion in the Toronto region are holding back the Ontario economy.

"An aging capital stock built mostly in the 1950s and 1960s, rising traffic congestion in cities, a lack of affordable housing and growing worry about the risks posed by climate change, are just some of the major infrastructure challenges exerting pressure on local and regional economies," the report said.

Federal labour policies also put Ontario at a disadvantage, he said.

Only 27 per cent of Ontario's unemployed qualify for EI because the program is structured so that people in part-time jobs cannot access it. About 44 per cent qualify in other provinces.

He recommends adopting a nationally standardized support system for the employment insuranceand reforming the Labour Market Development Agreements between the province and federal government so that Ontario can receive training and employment support, especially for marginalized workers.

Johal also recommends reform to aboriginal education and support, allowing more economic migrants to come to Ontarioand fostering entrepreneurship.

He says the province is poised to take advantage of export opportunities, but needs trade across the U.S. border to flow more smoothly, a federal responsibility. Even as it tries to greet the potentialof the Canada-EU trade pact, it is still dealing with interprovincial trade barriers.

"Nearly 40 per cent of Canada's population resides in Ontario, and the province's share of national GDP is almost twice that of Quebec's or Alberta's. What happens in Ontario profoundly affects the rest of the country," Johalsays.

"As Canadians prepare for a federal election this year, the economic fortunes of Ontario should be top of mind for each of the federal political parties."