Two Ontario think tanks differ on the problem

Few people on the outside watch Ontario politics the way they watch Quebec. The heart of confederation can’t separate. So, historically, Ontarians have modestly exercised their political weight by deciding who should govern Canada—to the tolerable satisfaction of every region. This rather laid-back style was, of course, supported by electoral bulk and great-and-growing wealth. Those conditions have shrunk—on average, Ontario incomes haven’t been rising and now hover at the national average, and (electorally) Ontario’s national voice is divided.

Consequently, the Government of Ontario and local elites have been getting busy studying policy from an Ontario perspective and supporting conferences and seminars to raise awareness of Ontario’s unique commercial and demographic interests. Recently, two vigorous Ontario think tanks have weighed in on the issues and, with very different perspectives, have set the menu for the debates ahead.

The Mowat Centre for Policy Innovation says: let’s negotiate. The Task Force on Competiveness, Productivity & Economic Progress says: let’s grow. The former would have us politic like poorer Canadians; the latter would have us prosper in the North American economy.

Matthew Mendelsohn, director of the Mowat Centre, is preoccupied by one public statistic: “Canada is no longer a country of a prosperous ‘centre’ and a needy ‘periphery.’ Yet Ontarians still contribute about $20-billion more than they get back in federal transfers and services for purposes of redistribution to other parts of the country.” Click on: http://www.nationalpost.com/related/topics/fair+Ontario/3846367/story.html

Roger Martin’s Competitiveness task force hammers away at the gap in Ontario’s overall economic performance that began almost two decades ago: “For the last several years, Ontario’s rank has shifted between fourteenth and fifteenth place out of sixteen North American peer jurisdictions . . . In 2009, the [GDP per capita] gap below the medium of these peers was $6,900.” Click on: http://www.competeprosper.ca/index.php/work/annual_reports/annual_report_todays_innovation_tomorrows_prosperity/

These two numbers are not mutually exclusive, but one didn’t cause the other and can’t fix the other’s problem.

Renewing Ontario’s prosperity will not be found in simply getting the money back from Ottawa or having Ottawa spend another $20 billion in Ontario rather than in poorer provinces. The wealth gap with the other leading North American jurisdictions adds up to over $90 billion per year. Roughly, that gap is more than four times greater than the gap in federal cash flows. But, more importantly, no federal government has moved a major Canadian region ahead through direct spending anyway.

A society can’t effectively mobilize around two ideas at the same time. So, leadership in Ontario must choose—will it be the politics of fair shares or the politics of engagement with North America and other opportunities to prosper?

Engagement is more consistent with Ontario’s winning traditions. It would mean more attention to education, innovation, tax design, and infrastructure, including the decrepit state of Ontario’s links to the United States. It would leave those who like to negotiate with Ottawa with much to do. But it would not count on a redesigned Canadian social safety net to fix Ontario’s promising and perilous economic circumstances.