A Vision for Economic Growth
Empowering People, Empowering Ontario
(Cette politique sera bientôt traduite)
There’s not a person or family among us who hasn’t looked at a grocery receipt in the last few years and had a sinking feeling. Will the prices stop rising? Will our pay cheques be able to cover what we need?
But those grocery receipts aren’t the only problem. A lot of people can’t afford groceries because they can’t afford housing and the other expenses of daily life. Moreover, Canadians now owe $1.85 in debt for every dollar of disposable income.
It’s crushing people.
Individual households aren’t alone. A small business owner in Toronto’s East End, after pivoting aggressively to survive the hospitality downturn during the pandemic, says they’re on the brink. The owner said that they’re making the hard choice to halve the size of their patio this summer - during peak season. The reason? There’s nowhere nearby for staff to live, and nobody can stomach the idea of spending three hours a day commuting.
It's crushing business. And, this business is not the only one making hard choices.
Research from the Ontario Chamber of Commerce found that business confidence has dropped to a new low in 2023. Only 16 percent of organisations surveyed are confident in the province’s economic outlook, down from 29 percent in 2022.
An essential ingredient of any plan to deal with cost-of-living in the long-term is what economists call labour productivity. That’s the value of goods or services that we can produce per hour of work - and for decades we’ve been lagging. One important reason for this is low business expenditure on research and development.
Now, additionally, workers aren’t able to find an affordable place to live near where they work. They’re hobbled by lack of access to healthcare, and struggling with a shortage of licensed childcare spaces. Key positions at workplaces are unfilled leading to stress and inefficiencies. All this, and we are paying more to deal with climate change because of delays and backsliding.
Ontario isn’t supporting workers to be as productive as they could be. It’s productivity which is key to prosperity and affordability in the long run, the same productivity that we need to be competitive on the world stage, and to marshal all of our resources to face today’s problems.
Here’s my economic vision to get our economy on the right track and make life affordable again.
- Investing in our people
- Strengthening transportation and building housing
- Supporting innovation and entrepreneurship
- Leading the Economic Transition
- Respecting guardrails for economic development
Investing in our people
- Reinvest in education at the early childhood, primary, secondary and post-secondary level.
- Support new Canadians as they transition into the workforce through better recognition of their existing credentials and skills.
Labour shortages remain a problem: in the Bank of Canada’s most recent Business Outlook Survey, companies reported a lack of workers as their second-biggest concern, second only to price pressures. Ontario is not moving fast enough to solve this problem.
For example, the cost of housing makes Ontario unattractive as a destination for skilled labour. The lack of childcare spaces makes it difficult for parents to fully participate in the labour force - while untenably low wages are driving trained, qualified early childcare educators out of the field. Immigrants with skills and experience are shut out of jobs because of expensive, convoluted licensing requirements. The policy levers that can address these problems are in the hands of the province and its municipalities.
We need to do a better job of assessing and recognizing the credentials that newcomers bring, and get them into the jobs they are trained to do as quickly as possible.
We should reinvest in education at the early childhood, primary, secondary and post-secondary level. The pandemic’s damage to young people and their education is not yet repaired and teachers are crying for more help in classrooms. Support for skills training should continue as most sectors of the economy are continuing to report shortages.
Strengthening transportation and building housing
- Build out economies of scale and support innovation in public transportation.
- Continue to invest in high-speed rural internet.
- Upgrade and service vital transportation routes.
- Plan transportation with long-term costs and benefits in mind.
Ontario is large. A key to our economy’s competitiveness is the ability to efficiently move people, goods, energy and information.
Along the Windsor-Quebec corridor, passenger rail service can’t expand without convenient connecting services. The GO Transit network has the potential of feeding local passengers into regional systems, giving them economies of scale, and allowing more people to live in an affordable neighbourhood with an easier commute to work.
Some combination of in-person and remote work is here to stay for many jobs. A continued investment in high-speed internet throughout rural and northern Ontario can attract people to work remotely from smaller and more remote communities. It’s also a way to diversify the economy in these communities.
The City of Kingston has had great success in public transit innovation, until just before the pandemic, increasing city transit ridership by about 15 percent year over year. Several rural counties are piloting bus services. The provincial government should support municipal innovation in public transit.
Transportation routes are vital economic assets that connect goods and communities. Improvements to help the movement of goods by rail, such as intermodal facilities, can also reduce congestion on highways and reduce emissions.
Highways need to be in good condition and they need to be safe. For anyone who has driven Highway 11, one of two northern legs of the TransCanada Highway, they know that there are areas without paved shoulders and without rumble strips. If Northern Ontario is going to provide the critical materials for the electric economy, then Highway 11 and Highway 17 should be considered vital economic assets and be maintained as such.
The province needs to take a long-term view to transportation planning. For example, the argument for constructing a major highway running through York, Peel and Halton region claims that it would reduce commute times. It doesn’t consider the long-term impact, born out over and over again, that inducing development along the route of the proposed 413 has the potential to create yet more sprawl and congestion, trapping us further down the road to an unsustainable future.
The housing crisis is a cost-of-living crisis and an economic crisis, and it deserves its own section. Organisations cannot thrive if workers cannot afford a place to live near where they work. We need to implement the recommendations made by the Housing Affordability Task Force with a particular focus on removing barriers to the development of missing-middle housing. Please read about my vision for housing.
Supporting Innovation and Entrepreneurship
We can unlock Ontario’s innovative and entrepreneurial mindset, and encourage business expenditure on research and development by
- Protecting Intellectual Property (IP) by helping individuals pay for strong first patent applications, and incentivizing income from IP.
- Stimulating innovation by encouraging competition through exports and interprovincial trade
- Using government procurement to support commercialization of new products and services, preferring performance specifications over prescriptive specifications.
- Better supporting a system to connect startups and growing SMEs with investors who understand and don’t overestimate the risks, help find resources, and help access markets.
- Supporting measures to encourage innovation and commercialization ecosystems.
- Keeping our laws up to date with changing technology
We should be wary of making the politically expedient mistake of spreading innovation and commercialization resources too broadly and too thinly. While the government should avoid choosing winners and losers at the individual firm level, Ontario can get a higher and less risky return on investment by supporting ecosystems which have demonstrated success.
As a scientist-legislator, I recognize the need to keep our legal and regulatory framework up to date with the pace of changing technology. If we build and enforce the appropriate safeguards to prevent abuse, Ontario can lead the pack when it comes to the research, development and commercialization of transformative technologies such as artificial intelligence.
Leading the Economic Transition
- Support modernization programs in critical industries.
- Promote the circular economy as a form of growth industry.
- Consult with business to craft stable long term industrial policies
- Build on and coordinate with other levels of governments’ innovation policies.
Many critical industries are changing rapidly and governments should pay attention to how they are adapting, and how change will affect Ontario workers.
A great example is the automotive industry.
Ontario is on the precipice of being an electric vehicle (EV) manufacturing powerhouse. But good jobs and prosperity come from participating in the whole value chain, not just mining critical materials and assembling batteries and EVs. A key part of the current automotive value chain - and the corresponding jobs - are captured by about 300 small and medium sized businesses around Windsor. The corresponding value chain for EVs should stay in Ontario, and may very well include that same group of SMEs. If they need to adapt and retrofit their existing systems, programs such as the existing Ontario Automotive Modernization Program must be on tap.
We should also invest in the circular economy of critical materials and the ecosystem around critical materials processing. This is a strategy to help Ontario workers quickly break into the value chain between the mine and the electric vehicle. It’s also a realisation of the economic, environmental and security benefits of a circular economy in critical materials.
While we supercharge the electric value chain, we should also take action to boost other sectors. We need to consult with business to craft long term industrial policies that work for everyone. Industrial policy should be as stable as possible through elections and changes in government, so that businesses can plan, reduce risk and avoid whiplash from trying to keep up with regulatory and policy changes.
Navigating basic government services shouldn’t take dozens of phone calls, weeks of research, or pricy external consultants. Businesses today are swimming in the complexity of overlapping federal, provincial and municipal programs that all purport to solve similar problems.
A 2022 policy paper for the Munk School of Global Affairs flags this complexity as a barrier to growth. It calls on the Ontario government to “ensure that its policy actions build on—rather than duplicate, or ignore—the flurry of innovation policy activity at the federal level.” This doesn’t mean that Ontario’s innovation policy must be in total lockstep with Ottawa. But our businesses will be much better served if we are marching in the same direction.
One tool for this would be a “GPS for government business services” to serve as a way for SMEs to access existing government programs, while helping us identify if there are gaps or dead-ends.
Respecting Guardrails for Economic Development
- Reconciliation with Indigenous peoples and respect for treaties.
- Economic strength supported by diversity.
- We clean up as we go to be fair to future generations.
- Develop reliable, affordable and sustainable power generation, storage and distribution.
No way forward without reconciliation with Indigenous Peoples
When it comes to building a strong economy, there’s no way forward without reconciliation with Indigenous peoples and respect for treaties. A trusting relationship must be rebuilt proactively by the Ontario government. Consultation shouldn’t wait for disputes to arise. A necessary first step for the Ontario Government, as both a major employer and financier of projects, is to follow through with Call to Action 92 from Truth and Reconciliation Commission to adopt the United Nations Declaration on the Rights of Indigenous Peoples as a reconciliation framework and to apply its principles, norms, and standards to corporate policy and core operational activities involving Indigenous peoples and their lands and resources.
A strong economy built on the diversity of its people
A strong economy for Ontario will be built on the diversity of its people. Cultural and ethnic diversity and ties to other countries are also economic assets. Notamment, la communauté franco-ontarienne restera un atout fondamental sur les plans économique et social. On dira toujours, “Nous Sommes, Nous Serons”.
We must clean up as we go, to be fair to future generations
Ontario's competitiveness goes hand in hand with sustainability in the long run. We must take the climate crisis seriously: in driving down our GHG emissions and building resilient systems to face down the wildfires, floods, droughts and heat waves that are destroying our homes, risking our economic security, and threatening our lives.
Preserving green spaces, wetlands, soil, farmland and biodiversity goes hand in hand with human wellbeing. So these are essential to a competitive economy in the long run.
To be competitive we need to see where the economy is heading and invest in getting there. For example, globally, cement is a large contributor to GHG emissions. Meanwhile at home, Ontario cement makers have developed lower emission cement and we can encourage its use and continued development through government procurement and/or standards.
Reliable, Clean and Affordable Energy
To be competitive we must have reliable, affordable and low-emissions electricity. More companies are demanding that before locating here. Because the Ford government wasted at least two years at the beginning of its mandate, Ontario is at risk of electricity shortfalls as early as summer 2023.
But, not only do we need to expand efficiency measures, sustainable power generation and storage, we also need to upgrade our local distribution network to meet future demand. We need a smart grid with distributed generation as we handle lots of electric vehicles, batteries and smaller scale solar PV generation.
Renewable energy generation programs, favouring people near renewables, have proven effective in getting local buy-in and accelerating development. For example, in one program in the UK, postal codes have lower electricity prices when the winds turning a nearby turbine are stronger. We need to be innovative, not only in the way we develop technology, but also in the way we roll it out.
What about paying for it all?
To win in sports you need a good offence and defence. Economic growth in the past 70 years has supported Ontario’s ability to be a caring and fair society.
More recently, we've been playing defence against simultaneous crises in inflation, housing, healthcare, education, and climate change. We are limited by debt – financial and environmental debt.
We must invest in offence. We must invest in nurturing a competitive economy, supporting a healthy society, where we can marshal all of our resources to fight these crises.
We must avoid a downward spiral of under investment and poor economic performance. A virtuous economic cycle should be our goal - one where we can attract investment, grow our talent pool, and show the rest of the world that Ontario can compete on the same stage.
Economic Policy Bite: Regulatory Sandbox
The Ontario Regulatory Sandbox is an example of how regulations can be kept up with technology, facilitating the testing of innovative services or products, and encouraging innovators to come to Ontario.
My economic policy vision above includes supporting innovation and entrepreneurship by keeping laws up to date with changing technology.
One area where Ontario lags other jurisdictions (UK, EU, Australia, Alberta) is in so-called regulatory sandboxes for innovative financial services. A sandbox allows companies to test new ideas, minimizing licensing delays and costs, in a controlled regulatory environment, for a limited amount of time. Consumer protections can be developed by the regulator while companies are in the sandbox.
The Ontario Ministry of Finance’s Capital Markets Modernization Task Force recommended in 2021 that an Ontario Regulatory Sandbox be created jointly by the Ontario Securities Commission and the Financial Services Regulatory Authority.
This Ontario Regulatory Sandbox would import talent, innovation and investment into Ontario, fostering competition while safeguarding consumer protections.