Prospects for Ontario’s prosperity: A look back and a look ahead
Over the past ten years, poor productivity and lagging innovation have persisted in the Ontario economy. As a result, the average Ontarian has lower living standards than counterparts in other advanced economies. Yet there is more reason for optimism than a decade ago, as our provincial and federal governments have improved the policy environment for advancing prosperity. The challenge in the decade ahead will be for business leaders to take advantage of this and invest more in innovation.
In Prospects for Ontario’s prosperity: A look back and a look ahead, the Task Force reports that Ontario’s GDP per capita – a measure of the value created by workers and firms in Ontario from the human, physical, and natural resources in the province – lagged the median of the 16 North American jurisdictions by $7,700 or 14.2 percent in 2010, up from the 2009 gap of $7,100 in constant dollars (2010). This gap represents lost prosperity, which negatively affects Ontarians at all income levels. The prosperity gap is the result of our being laggards in innovation and productivity. While the province leads most other regions around the world in competitiveness and prosperity, this is largely because Ontarians work more, not because they are more innovative and productive – or work smarter.
To help achieve the 2020 Prosperity Agenda, the Task Force recommends:
- Encourage productivity and innovation to enable Ontario to become a prosperity leader in 2020
- Make Ontario a leading centre for talent and skill: continue investments in educating people for Ontario’s competitiveness, lower marginal effective tax rates for low-income Ontarians, and consider wage insurance for assisting older displaced workers
- Encourage businesses, governments, and individuals to step up to the challenge of investing in our innovative capabilities
- Gear public policy toward more specialized support and higher competitive pressure for innovation