The Twelfth Annual Report on Ontario’s economic performance is titled, “Course Correction; Charting a new road map for Ontario”. I guess someone, who doesn’t have the patience or the time to read through the report, will easily make out how things have fared for Ontario’s economy in the past year or so. Ontario’s economy hasn’t performed to the expectations, and as things stand right now, Ontario will continue to lag its North American peers in the ‘prosperity gap’ in the years to come if effective measures are not taken.
One of the chief reasons for Ontario’s poor performance is the low levels of productivity growth, which in turn is a direct result of the poor investment in machinery and equipment (M&E), and information and communication technology (ICT). The report has found that apart from these longstanding challenges, Ontario’s productivity has suffered because of deteriorating infrastructure and inefficient public transport. The report has also pointed out the lack of employment opportunities in Ontario, with unemployment rate as high as 16.9% in 2012. The report further claims that it is not only the unemployment that is a cause of concern, but also the lack of on-job skills of graduates and other trained professionals. The blame for the lackluster performance of Ontario’s economy falls on both the politicians and business leaders. The report comments on the increasing gap between Ontario and other provinces/states in Canada, and in the US. While the Dow Jones Industrial Average (DJIA) gave investors a whopping 26% returns, Toronto Stock Exchange (TSX) returned a modest 9.6%.
The report states that the business community failed to act on the roadmap and findings of the last year’s annual report. This year’s road map by the Task Force for the Ontario’s economy involves,
The report outlines the need for transforming words into action as far as the business community of Ontario is concerned. The entrepreneurs in Ontario are positive about business growth, but they are yet to take any concrete steps for turning the tables around for the province’s economy. The report identifies one important factor for this problem – business leaders have a notion that they are investing more than their competitors – but, as the report very clearly mentions, the investment is far “below the median for their size and sector.”
Also Read: NYSE Holidays 2014
The report examines the areas of investment and states that one of the best ways to build an economically stable Ontario is to invest heavily in the education sector. While lauding the efforts of the Ontario’s government, the reports also assesses the need to do more for building a strong labor, which is technically-skilled and knows how to use the knowledge in the development of new products. The report stresses on the need for a more inclusive investment in the education sector. Commenting on the opportunities in the mining sector in Northern Ontario, the report stresses on the importance of training the local youth to help them in gaining employment from this economic expansion.
The Task Force Report compliments the Ontario’s government in making necessary changes to Ontario’s tax system and enabling business to conduct their operations smoothly. However, more can be done about the tax policy by expanding Working Income Tax Benefit (WITB) so that more and more Ontarians are motivated to be a part of the workforce.
The report notes that Ontario’s economy has the infrastructure to become one of the most prosperous states among its peers. However, the report mentions that to close the prosperity gap, Ontario’s economy needs to focus on the specific sectors that have a huge potential, such as agriculture and agri-food. The investment needs to be increased in these sectors, and businesses also need to promote themselves in emerging economies to target a wider user-base. The stagnation in the manufacturing industry has made it to the Task Force Report, with a call to make immediate amends to the sorry state of affairs currently prevailing in the industry. The report states that the manufacturing sector needs investment, especially in machinery & equipment, along with a dedicated effort to develop highly-skilled workforce.