Ontario lags peers on prosperity, reports finds
But Task Force says province can close gap by investing in people and equipment
Globe and Mail
By Marian Stinson
Ontario’s competitiveness and prosperity lag other leading jurisdictions in North America, but a program of investing in both people and equipment will enable the province to close that gap, a provincial task force said yesterday.
Using gross domestic product per capita as the measure, Ontario fell to 13th among 16 jurisdictions in Canada and the United States that have similar natural resources, histories, and legal and administrative frameworks, the Task Force on Competitiveness, Productivity and Economic Prosperity reported yesterday. Ontario now ranks below Ohio and Michigan, after moving ahead of those states in last year’s study.
At $40,317, Ontario’s per capita GDP is 7.1 per cent or $3,061 less than the median for peer jurisdictions, the report found. That is better than the prosperity gap of 13.8 percent found by the task force’s first annual report in 2000, but worse than the gap found in 2002.
“We conclude from our work that we have the potential to achieve prosperity that rivals our peer states, and we are proposing an ambitious set of recommendations for our province to realize that prosperity potential,” said Roger Martin, chairman of the task force and dean of the Rotman School of Management at the University of Toronto.
The task force recommends Ontario should:
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increase investment in machinery, equipment and software;
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shift government spending to investing in future prosperity;
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seek ways to accelerate integration of immigrants into the economy;
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increase investment in postsecondary education; and
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reduce tax burdens that limit investment by businesses and low and moderate income families.
If Ontarians were able to overcome the prosperity gap, the average annual after-tax household income in the province would rise by $6,755, the study said. This added income would enable mortgage holders to cover more than half of their annual payments and renters to cover more than 80 per cent of their average annual payments.
Closing the prosperity gap would also generate $13.7-billion in additional tax revenues for the federal and provincial government.
