Milway says prosperous Ontario still misses opportunities
Oakville Beaver
By Howard Mozel
Ontario may have undertaken strides to narrow the prosperity gap between its peer economies, says James Milway, but it continues to miss opportunities to improve productivity - the province’s key challenge for closing that void.
“We see lots of opportunities to enhance (our position), but we must invest more,” said the Executive Director of The Institute for Competitiveness and Prosperity.
Milway made his comments Wednesday at The Harbour Banquet and Conference Centre during the Oakville Economic Development Alliance’s 5th Annual General Meeting.
If Ontario was a country, he explained, it would be the second most prosperous such entity in the world, next to the United States. Compared with the province’s peer group of 14 U.S. states (with half Ontario’s population) and Québec, however, its position concerning Gross Domestic Product (GDP) is “more humbling” - 13th, says Milway.
“Massachusetts is as far ahead of Ontario as Ontario is ahead of Slovenia (or 10 per cent under the median),” he added.
The Institute for Competitiveness and Prosperity is an independent, not-for-profit organization that aspires to public understanding of macro and microeconomic factors behind Ontario’s economic progress. It is funded by the Government of Ontario and is mandated to share its research findings directly with the public.
The Institute’s primary purpose is to serve as the research arm of the Task Fore on Competitiveness, Productivity and Economic Progress, which was announced in Ontario’s April 2001 Speech from the Throne.
According to this report, Milway explained, Ontario has a 10 percent prosperity gap against the leading U.S. states because, in these jurisdictions, individuals, businesses, and governments simply invest more. To close the gap, the report maintains, “Ontario needs to reverse the widening pattern of under investment that limits our potential for productivity gains.”
Results from 2001 reveal that per capita economic output in Ontario trails the peer group median by $4,118 or 10 percent, said Milway, a prosperity gap that translates into approximately $6,640 per household in after-tax
disposable income.
In addition to the benefits that closing this breach would have on individuals, said Milway, tax revenues from Ontario would increase by $17 billion. This, he explained, could make a significant contribution to health care and other costs, all without raising tax rates.
The source of this prosperity gap, Milway said, continues to be productivity, as evidenced by the Task Force’s research which reveals that Ontarians are not creating as much value as they can from the province’s human, physical, and natural resources.
“The prosperity gap has been widening over time,” said Milway.
