Tuesday, May 8, 2012

Ontario's Central Problem

Late last week I had an interview. One of the first questions I was asked was ‘What is the biggest problem facing Ontario?’ After giving it a moment’s consideration I replied with the budget deficit and Ontario’s debt. I feel it was the safest possible answer, and probably also the consensus answer if you asked most journalists, pundits and politicians. On the train ride home I agonized over my interview, and tried to figure out how it could have gone better.

Aside from bombing a couple of questions, and perhaps cracking too many jokes, I was stuck on this answer. Again, it’s not that my answer was wrong, it’s that it could have been better. Ontario’s debt and deficit are not issues in and of themselves, but symptoms of broader problems that plague my home province.

Ontario’s key problem is that of economic competitiveness. Over the past twenty-five years it has appeared as though Ontario was spared the recession that has dogged its neighbours in the American Midwest. I am a fan and avid reader of Aaron Renn’s Urbanophile blog where he discusses the urban issues in the Midwest and how to improve the region’s cities. I began reading the blog because he was the most prominent blogger on the subjects that interested me, though his focus was only Ontario adjacent. I was always a little baffled to the languishing conditions in Pennsylvania, Ohio, Indiana, and Michigan compared to Ontario.

The truth of the matter is that Ontario weathered the last few decades comparatively better than the other Great Lake states because of the Toronto economic engine pushing it forward. Small and medium cities and regions, such as Niagara, which depended upon manufacturing mirror their American counterparts. Being a centre of Canadian business and finance, and the immense growth of Greater Toronto cities and a high level of immigration has kept the Ontario economy afloat.

The Ontario government and economic life never really shifted off of the manufacturing base. The province held onto industrial jobs much longer than its neighbouring competitors. Thousands of jobs have been lost since 2000. Given the changing nature of the Ontarian economy it is possible that the structures of revenue and expenditures must be rethought to meet this new reality.

When I was sitting on the train I wanted to promote some strategies to address Ontario’s competitiveness. I only could come up with a few ideas, so perhaps I will devote some mental power to it and try to come up with something comprehensive, hopefully next week.

If the Ontario economy came roaring back with tens of thousands of manufacturing jobs, the need to rethink Ontario’s government and economy would not be necessary. The consensus seems to be these jobs may be gone for, at least, the short and medium term. Therefore solutions will be needed, or at least new perspectives.

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