End of the Line: A closing message from the Institute’s Executive Director
After more than 18 years, the work of the Institute for Competitiveness & Prosperity is coming to a close. The Government of Ontario recently made a decision to cut all funding to the Institute, along with our friends at the Mowat Centre. While we are extremely disappointed with the decision, it gives us the opportunity to look back on the contributions the Institute has made to the public discourse and public policy in Ontario.
The Institute began as the research arm to the Task Force on Competitiveness, Productivity and Economic Progress. Created by then Premier Mike Harris in 2001, and headed by Roger Martin, then the Dean of the Rotman School of Management at the University of Toronto, the Task Force and the Institute were charged with looking at policies that could be enacted to help Ontario become more competitive relative to its peer jurisdictions. The Institute was unlike any other research organization in Ontario: a provincially-focused economic think tank with a mandate to offer implementable recommendations to the public and private sector, funded by the government, with no political interference. We think the Institute used that mandate wisely.
In research ranging from clusters to economic development, immigration to artificial intelligence, health care to innovation, the Institute tackled the productivity issues facing the province of Ontario with depth, honesty, and data. Over the course of 18 years, the Institute became a treasure trove for researchers, analyzing longitudinal and comparative data on a number of fronts. In its early days, led by Roger Martin, Chris Riddle, and eventually Jim Milway, the Institute created new intellectual property in the areas of productivity and clusters, all of which informed the opinions of the Task Force and the government of the day. The Institute and the Task Force, as well as later versions of the Task Force, produced 17 Annual Reports, 34 working papers, and numerous white papers for Premiers Harris, Eves, McGuinty, Wynne and Ford.
For less than a million dollars a year in public funding, the Institute has had a tremendous impact on public policy in Ontario. More than just the quantity of our work, the success of the Institute can be measured in actual policy change. For years, the Institute argued for a dramatic change to the marginal effective tax rate and for the adoption of a Harmonized Sales Tax. Both of these changes were implemented, resulting in a drop of the marginal effective tax rate on businesses in Ontario from 43.4 percent in 2005 to 19.0 percent in 2017. The Institute long advocated for tax benefits and provisions for low-income families, seeding the ground for the Ontario Child Benefit.
Roger Martin, in particular, was one of the first public voices who argued for investments in education as a productivity issue, an argument that was used as part of the “Reaching Higher” investments in post-secondary education in the mid-2000’s. This is but part of the Institute’s long legacy on the education file, as the Institute has focused on every level of education - from full day kindergarten to adult or lifelong learning. We have always recommended a focus on skills, literacy, and competencies rather than just subjects. We were one of the first think tanks to raise the alarm bell on math scores and math teaching, with our recent report informing the current government as it endeavoured to reform teacher math education.
The Institute has advocated for not only more child care spaces in the province, but also the lowering of the cost of child care. The Institute has beat the drum for the “triple bottom line” economic advantage provided by high quality, affordable child care – better outcomes for youth, more opportunity for parents to return to work, and better pay and work conditions for care providers. Some of our work was used to inform child care reforms made by the previous government.
Finally, reinvigorated by the recent involvement of current Panel Chair Tiff Macklem, the Institute is the only Canadian organization that offers publicly-available clusters data. We have argued that strong clusters help produce more innovation, specialized talent, and suppliers, and more productivity than industries that are not part of strong clusters. We have provided advice to federal and provincial governments alike, which have led directly to policy changes. In retrospect, the chance we had to host the 21st TCI Network Global Conference in October 2018, with nearly 350 cluster leaders from around the world, serves as an impactful capstone to our work in this area in addition to The Canadian Cluster Handbook, which we published in April 2019.
However, we did not achieve success on every file. Like many other productivity advocates, we were never truly able to crack the nut that is the private sector. Despite strong arguments and data for investments in productivity-enhancing areas like human capital, IT especially software, and research and development, Ontario’s private sector proved resistant to change and lags competing jurisdictions. Despite innumerable attempts, governments of multiple political stripes over nearly two decades continue to follow the path of a low tax rate for small businesses, thereby further embedding a lack of scale and competitiveness in our businesses.
As we exit the stage, the current state of Ontario’s competitiveness hangs in the balance. All of the progress made on the education file feels threatened. The provincial debt, interest on debt, and household debt cry out for more immediate attention. The environmental file has become a political football and may threaten our ability to compete on the global stage. Our hope is that others will rise to take on these issues of vital importance to Ontario’s economy.
Finally, of all that we have accomplished as an Institute, I believe our greatest contribution has been the training of our staff. Former Institute staff have left our employ to go on to the private sector, the public sector, and institutions of higher learning. They have done so with a greater understanding of Ontario’s economy, the knowledge of how to impact public policy, and a sense of the public interest. As the Institute’s Executive Director for the last seven years, it has been an honour to have worked with so many talented individuals. While the Institute may be closing, I know that the animating ideas and spirit of this place will live on in the alumni who have walked through our doors.
Thank you to the government, the Task Force, Tiff Macklem and, especially, Roger Martin, for creating an Institute that has allowed us to contribute, in some small way, to the public good of Ontario.
Photo credit: nadia_bormotova, iStock