Ontario Premier Says Province Is ‘Stronger, More Competitive And Poised For Growth’

–  McGuinty stresses need to control spending and and public-sector wages

A Foreword by NAL publisher Doug Draper – Followed by Premier’s address

Ontario’s economy is growing and “now we need to take further action on another important front and that is the deficit,” said Premier Dalton McGuinty this January 24 during an address to the Canadian Club of Toronto.

 

 “Tackling the deficit is simply an essential step in building the strong economy (that) supports good jobs and quality public services,” said McGuinty, adding that “borrowing money to help Ontarian through a terrible recession is one thing, but living beyone our means, constantly adding to the debt we are leaving to our children (is) quite another thing. That would be wrong for our children and for us.”

 McGuinty said that driving down a debt that now stands at $16 billion and ultimately balancing the province’s budget in the fiscal year 2017/2018 “won’t be easy (and) getting there will require that we slow down our spending significally.”

One thing his Liberal government won’t do, said the premier, is raise taxes and it will not compromise the quality of two of the “most important public services upon which families rely” – health care and education.

On the health-care front, McGuinty went on to say that health care accounts for more than 40 per cent of the province’s program spending and “is overflowing with opportunities for reform” and the government will soon introduce “an exiting plan for health-care transformation (that) will provide Ontarians with better health care by getting better value for our health-care dollars.”

Finally, the premier said that as much as he feels public sector workers must be “fairly compensated” for their work, and he believes they already are, something must be done to control public sector worker’s wages which add up to about $55 billion annually or half of all government spending. McGuinty didn’t go as far as Conservative leader Tim Hudak and talk about mandatory wage freezes and about making public sector workers compete with private sector workers for their jobs, he did say that the government intends to negotiate firmly” with the public sector over future wage contracts.

 Premier’s Remarks TO THE Canadian Club of Toronto

January 24, 2012

 Distinguished guests, ladies and gentleman, colleagues.

 J’aimerais commencer aujourd’hui par vous remercier pour votre travail, pour les emplois et les débouchés que vous offrez aux familles de la province et pour votre détermination à continuer de faire progresser l’Ontario.

 I want to start today by thanking all of you for the work you do, each in your own way, to help build a strong Ontario, supported by a strong economy.

Of course, my subject, today, is the economy. And more specifically, I want to talk about the next step in our plan to build a stronger Ontario economy, an economy that supports good jobs and quality public services for all of us.

I will begin by touching on the fundamentals, because they are the foundation for growth and prosperity. I am talking about our tax and regulatory environment, our power grid, our infrastructure and our workforce.

First, our tax environment. To make sure Ontario is competitive, we eliminated capital taxes and reduced corporate taxes. Our corporate tax rates are now lower than every U.S. state and lower than the OECD average. The long and the short of it is we’ve cut the tax rate on new business investment by almost half.  We’ve also adopted the HST, letting Ontario businesses compete on a level playing field with competitors in over 140 countries who already enjoyed the distinct advantage of a value-added tax. We’ve reduced personal income taxes for 93 percent of Ontarians who are now paying less in tax today than they did four years ago. What’s more, we’ve eliminated 80,000 business regulatory requirements that stood in the way of jobs and growth. We’ve aggressively expanded international trade, doubling our trade with India and China. And we continue to offer our strong support to the federal government as it seeks to enter into new trade agreements beyond North America.

The second fundamental we strengthened was our electricity system. Because we all understand that a reliable supply of electricity is the lifeblood of a growing economy. Our plan will rebuild 80 percent of the system over 20 years. Already, we’ve built over 5,000 kilometres of new transmission and 8,000 MW of new generation. At the same time, our energy policies have given birth to an exciting, renewable energy sector in Ontario, creating 20,000 jobs so far. Yes, there has been some controversy around our clean energy plan. But it’s especially important in matters of controversy that people know where you stand. Our government stands for clean energy, clean energy jobs and clean air. And we won’t waiver on that. We are going to keep moving forward with our clean energy plan, always looking for ways, of course, to improve it.

Just as we have kept moving forward on the third fundamental — and that’s infrastructure. Our work together has meant new hospitals, schools, roads, bridges, sewers and public transit. On average, we are investing three times as much in infrastructure every year as the previous government did — because we need it. In Toronto alone, we have construction underway on a subway to York University, a rail link to Pearson Airport and a rapid transit line across Eglinton. And I think everybody here would agree: there is still more to do.

This brings me to our fourth economic fundamental, and that is a strong workforce. It’s just a hard fact: you can’t compete in the race to the top without a highly skilled and educated workforce. So we have made dramatic, new investments in the education and skills of Ontarians ranging all the way from full-day kindergarten for our youngest learners all the way up to more grad school spaces. And the results, my friends, have been nothing short of breathtaking: our schools are now recognized as the best in the English-speaking world; our test scores and high school graduation rates are way up; enrolment in our colleges and universities is up by 26 percent — that’s double the increase in the rest of Canada; and our workforce is now better educated than any of the 34 OECD countries.

Ontario families know: education is a great investment. And to make that investment more affordable, we recently announced a 30 percent tuition grant. It will help 300,000 college and university students from low and middle-income families. It’s been said that while we can’t build the future for our kids, we can build our kids for the future. That’s what education is really all about. And I think it’s noteworthy that, just last year, as we were coming out of recession, while Ontarians with a high school education experienced a 9,000 jobs net loss, our college and university grads experienced a 119,000 jobs net gain. Our plan will keep making Ontario more competitive by making Ontarians themselves more competitive.

So, my friends, when you consider the fundamentals — our tax and regulatory environment, our power grid, our infrastructure and our workforce — we are stronger. Yes, of course, there’s more to do, but there is no doubt about it: we are stronger; we’re more competitive; we’re better poised for growth.

And when it comes to growth, the Ontario indicators are all pointing in the right direction. Our latest sounding has our economy growing at 2.7 percent. Unemployment has dropped from a high of 9.4 to 7.7 percent today. And our champions, like manufacturing and financial services, are experiencing steady growth. So we’re moving in the right direction on pretty much all the major fronts.

Now, we need to take further action on another important fundamental and that is the deficit. It stands at $16 billion this year. And it’s not going away on its own.

Nous devons prendre la prochaine mesure vitale pour créer une économie qui soutient de bons emplois et des services publics de qualité. Nous avons besoin de nous attaquer au déficit de l’Ontario.

Tackling the deficit is simply an essential step in building the strong economy we all want and need, one that supports good jobs and quality public services.

But before I get to what we need to do, I want to speak to how we got here and why it is we need to get out.

First, how did we get here? Before the global recession hit, Ontario had balanced three budgets in a row. We were in surplus. And you should know that to this very day our government spends the least per capita among Canada’s 10 provinces. But, just as the recession took a bite out of household budgets across Ontario, it took its toll on the provincial budget, too. Government revenues went down and the need for government support went up: support for workers who lost their jobs, for employers who needed help to keep jobs, and support for infrastructure projects to create jobs. All this extra help for Ontarians combined with weaker revenues created a $16 billion deficit. That’s how we got here.

So, why do we need to get out? Well, just as it was right for our government to run a deficit to protect Ontarians from the worst of an economic storm, so now that the storm is over, it’s right for you and I to rededicate ourselves to our plan to eliminate that deficit.  Borrowing money to help Ontarians through a terrible recession is one thing, but living beyond our means, constantly adding to the debt we are leaving to our children, well, that’s quite another thing. That would be wrong — for our children and for us.

I don’t have to tell you: when it comes to the economy, confidence is very important. If Ontarians see their government managing responsibly and keeping a steady hand on the tiller, just as they are doing at home and in business, they are going to feel more confident.  And when international businesses see that we are taking action, it gives them the confidence to invest here, bringing jobs to Ontario, for Ontario families. And if the lending community sees that we are tackling our deficit confidently and in earnest, it reassures them and that keeps our borrowing costs down. Confidence in our economy is an indispensable, economic fundamental. And eliminating the deficit is key to maintaining the confidence of Ontarians, and the world, and growing our economy. 

In the coming weeks, we will receive the advice of the Drummond Commission. Minister Duncan will also continue hearing from Ontarians as part of his pre-budget consultations. And we will welcome any thoughtful advice we receive from the opposition.

Éliminer le déficit ne sera pas une tâche aisée. Pour ce faire, nous devrons toutes et tous faire le maximum. Dans le cadre de la mise en œuvre de son plan certains prétendront que le gouvernement va trop vite, et d’autres qu’il progresse trop lentement.

Eliminating the deficit won’t be easy and getting the job done will call upon the very best we have to offer. I’m pretty sure that as our government moves forward with our plan some will say, ‘You’re moving too quickly.’ Others are going to say, ‘You’re moving too slowly.’ I think Wilfrid Laurier offered some pretty sound advice 120 years ago when he said: “…see the goal and towards that goal direct your efforts, discarding the impetuous frowns of the rash and the cautious advice of the timid.” So I want to assure Ontarians: we won’t be rash and we won’t be timid. Our progress will be steady, measured and relentless.

While the specific details of our plan will be laid out in our budget, in the balance of my remarks, I want to share with you some of the broader strokes. Our plan will balance the budget in the fiscal year 2017/2018. Getting there will require that we slow down our spending significantly. As I have said before, we will protect health care and education, the most important public services upon which families rely. We will not raise taxes. Instead, we will find ways, through reform, to deliver government services more efficiently.

Health care, which accounts for over 40 percent of program spending, is overflowing with opportunities for reform. Shortly, Minister Matthews will lay out an exciting plan for health care transformation. Quite simply, our plan will provide Ontarians with better health care by getting better value for our health care dollars.

And speaking of dollars, one half of all government spending — about 55 billion dollars — is invested in wages and salaries. That’s not at all unusual. In fact, that’s as it should be. Most taxpayer dollars should go into paying the people who work on the front lines and deliver the services — like our nurses, our doctors, our teachers, our water and meat inspectors. We need them and we need them to do a good job. That means they need to be well trained and fairly compensated. And they are.

 But because half the province’s budget is spent on wages, it is just not possible to reduce spending without addressing salary expenditures. We will do that by respecting the collective bargaining process. Respect isn’t something you check at the door in the face of a big challenge. In fact, it’s when things get difficult that you need it the most. Now, just as we will respect the people who deliver our public services, so will we also respect the right of all Ontario families to a government that is fiscally responsible, one that maintains confidence in the economy they depend on for their jobs, their schools, their health care, their future. So we will negotiate firmly to a result that keeps us on a sure and steady path to a balanced budget, something that is in everyone’s interest.

Of course, our plan to achieve our goal of living within our means is a multi-year plan. It can’t be achieved overnight. There are no quick fixes. There are no easy solutions. Success will take time and an unwavering commitment. And I have every confidence we will achieve our goal because Ontarians have everything it takes to get there, including our track record in getting the fundamentals right — our workforce, our taxes and our infrastructure.

But there is another fundamental strength we possess as Ontarians, one that underlies all our great successes: and that is our willingness to work and build together. Think about this: together we built our schools, our colleges, our universities — the foundation of our powerful workforce and our research excellence. We built our health care system from the neighbourhood clinic to our world class teaching hospitals with access for everybody. We built our communities, safe, strong and growing, because newcomers from around the world keep choosing Ontario as the best place to begin a new life. We built our truly remarkable system of roads and highways, covering a geography, by the way, four times the size of the UK to serve a population one fifth their size. We built a vital and peaceful democracy where the strong and the weak, the rich and the poor, each get one vote. And, together, we built a strong, caring, progressive society inspired by the ideal that every child from every home will have every opportunity to become the best they can be.

That’s what Ontarians have achieved. It’s nothing short of amazing. And our future is equally bright so long as we keep working and building together.

My friends, Ontarians have placed their confidence in our government to keep a steady hand on the tiller and steer us towards a stronger economy. And that is exactly what we are going to do. We will keep strengthening our economic fundamentals. We will eliminate our deficit. And we will maintain confidence in our economy.

This is about a lot more than a dry exercise to satisfy accountants. It’s about satisfying the real expectations of Ontario families that their economy will inspire their confidence, and the world’s confidence, too. It’s about building the rock-solid foundation families need to support their jobs, their schools, their health care, their future. It’s about acting responsibly. It’s about building a bright future for our children and grandchildren. It’s about staying strong and being who we are. We are Ontario. We’re the greatest province in the best country in the world.

 Thank you.

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