Agenda for our prosperity

Released November 2006

Ontario’s economy is one of the world’s most successful; and most signs – low unemployment rates, solidly performing stock market, and a strong Canadian dollar – reinforce this. But it is not meeting its full potential. Two decades ago, Ontario’s Gross Domestic Product (GDP) per capita ranked close to the median of the sixteen most populous North American jurisdictions consisting of 14 US states and Ontario and Quebec. It now stands second to last – Ontario’s GDP per capita is now $6,100, or 12.4 percent, behind the median of the 16 jurisdictions.

Drawing on its five years of research, The Task Force is proposing an agenda to animate discussions among Ontarians, especially in the upcoming provincial and federal elections. The agenda highlights required changes in Ontarians’ attitudes, investment patterns, motivations to do business, and market and governance structures. Specific recommendations are as follows:

Attitudes: From collective complacency to shared determination to close the gap

  • Recognize imperative for closing prosperity gap and commit to taking the extra steps

Investment: From consumption today to investment for tomorrow

  • Increase investment in machinery and equipment, particularly information and communications technology
  • Encourage Ontario youth to invest in their educational attainment
  • Increase investment in post-secondary education
  • Rebalance government spending away from consumption to investment

Motivations: From unwise taxation to smart taxation

  • Increase Capital Cost Allowances to match economic depreciation
  • Eliminate the capital tax in Ontario
  • Convert provincial sales tax to a value added tax
  • Lower perversely high marginal tax rates for low income Canadians
  • Assess radical new approaches to taxation

Structures: From general support to specialized support and competitive pressure

  • Continue to improve the quality of venture capital
  • Increase business education
  • Reduce regulation to increase competitive pressure
  • Reduce counter-productive labour regulations
  • Continue to pursue bi-lateral free trade agreements
  • Rebalance fiscal federalism to encourage investment in have-not regions
  • Introduce employer experience rating to EI
Topics: Economic policy, growth, and strategy, Government investment and innovation, Business growth and innovation, Clusters, Social policy