Rebalancing priorities for prosperity
Ontarians need to rebalance our economic priorities and policies by investing more today if we want to achieve our full economic potential and prosperity in the future.
Ontario has built one of the most successful economies in the world, but the Task Force’s report demonstrates that Ontario has a widening prosperity gap with its peer group of North American jurisdictions. Ontario’s Gross Domestic Product (GDP) per capita is now $6,000, or 12.6 percent, behind the median of the 16 jurisdictions. The key to closing this prosperity gap, the Task Force argues, is higher productivity – the increased capability of Ontarians to add more value to the physical, human, and capital resources in the province. But to achieve this Ontarians need to choose a different path than the one we’re on – rebalancing priorities to increase investment for the future and decrease current consumption.
In Rebalancing priorities for prosperity, the Task Force calls for the rebalancing of key priorities required to achieve greater productivity and prosperity. These include:
- Businesses need to invest more in physical and human capital
- People have to invest more in themselves through more education, particularly at the post-secondary level and through a commitment to life-long learning
- Government spending needs to be re-oriented so that it invests more in future prosperity and consumes less of current prosperity
- Governments need to shift taxation to encouraging firms to invest in productivity-enhancing capital instead of discouraging business investment
- Governments also need to reduce the effective tax rate paid by the working poor
- Fiscal federalism needs to be fixed by shifting to a system that encourages investment for higher long-term prosperity potential in all regions and away from the current system that emphasizes the narrowing of current regional income disparities
- Innovation policies need to change course to build more pressure for the demand for innovation to balance the current emphasis on supporting the supply of innovation
- Venture financing needs to focus more on achieving higher quality investment and less on the quantity of capital