Business & The NDP: Rhetoric Versus Reality

Let it never be said that the major news events of our day go unreported. To date, Ontario residents have received analysis of the provincial NDP government's first Budget on many different fronts--the inevitable downward pressure on the Province's credit ratings by the bond-rating services, the increase in foreign market borrowing by Ontario (and Ontario Hydro) and the resultant higher Canadian dollar, the break from the more austere and restrained precedents established by other Canadian provinces, the difficulty of avoiding the deficit treadmill that the Federal Government seems to find itself on, and the impact on Ottawa's plan for reducing inflation.

No doubt all this information and speculation serves some useful purpose in bringing many possible combinations of cause and political effect before the public. In time, the public manages to separate what is relevant from what is background noise.

Our speaker today, Tom Corcoran, is able to help us sift through the almost indiscriminate piling up of details around the relationship between the Ontario New Democrats--who are still experiencing a kind of first-day-of-school delightful unfamiliarity sitting on the government benches--and the Ontario business community.

An article in Saturday's The Globe and Mail neatly outlines the Ontario New Democrats' political strategy, a strategy designed to exploit--what is referred to as--the "politics of the '90s." Widespread voter dissatisfaction with the old-line parties and a growing demand for politicians who will take strong, principled, distinctive stands on the issues of the day characterize this modern political climate. In 1972, party leader David Lewis lambasted recipients of government subsidies as "corporate welfare bums." The present party leadership is reviving the language of class politics. Borrowing a chapter from the U.S. text, The Politics of Rich and Poor by former Republican analyst Kevin Phillips, the New Democrats routinely attack the "corporate elite" and "big business." They are critical of advocates who favour "higher profits" and "tax breaks for the rich." This NDP strategy clearly anticipates a benefit to left-of-centre politicians flowing from the growing resentment of extreme wealth and privilege.

The business community might normally be hostile toward a social democrat government. However, business has a big stake in maintaining cordial ties with the NDP and is monitoring legislative developments closely and asking plenty of questions. Examples of these questions are: Will the way Ontario business does business be very different five years from now as the new government takes steps to realize its goal of building "a consensual, environmentally responsible economic strategy for the 21st century?" In advocating a partnership in the consultation process among "all the forces" in the provincial economy, will the new social democratic government establish a formal tripartite structure of labour, business and government along the lines of the European socialistic model?

Does the government's October 26 approval of the sale of Consumers' Gas to British Gas send a signal to investors, as suggested by the Premier, that "we're ready to do business in the Province?" In describing his ideal of a creative tension between "three realities"--planning, democracy, and markets--does Premier Bob Rae foresee a continuing commitment to market forces such as supply, demand, competition and entrepreneurship? Are the new government's options tightly circumscribed by a provincial economy that has done--what I would call--a "Ninja Turtle" and headed straight down the sewers? Finally, is the new government's spending strategy and economic thinking simply a 1960s version of the Keynesian economic policies that call for government to spend its way out of any problem?

Our speaker today, Tom Corcoran, has not been asked to address these specific questions. However, in his twin capacities as a senior officer of IBM Canada and as President of the Ontario Chamber of Commerce, Mr. Corcoran is uniquely positioned to comment on the dynamic between the new NDP government and the business community.

By way of background, Mr. Corcoran has degrees in electrical engineering and business administration from the Universities of Waterloo and Toronto, respectively. He joined IBM in 1969 and has held various marketing management positions with "Big Blue" in Toronto, Kitchener and New York. He is presently Vice-President, Communications and Quality, for IBM Canada. (Mr. Corcoran does not, I am told, share my wistful fantasy which involves altering IBM's ubiquitous THINK signs by adding the words: OR THWIM.) In addition to being President of the Ontario Chamber of Commerce, Mr. Corcoran is active with the National Ballet Company, YMCA Youth Enterprise Centres and Crescent School.

Mr. Corcoran's topic today is Business and the NDP--Rhetoric versus Reality.

Please welcome Tom Corcoran.

Tom Corcoran:

Thank you for that kind introduction and good afternoon ladies and gentlemen. I want to begin by saying that I'm very pleased to have been invited to speak before The Empire Club in my role as President of the Ontario Chamber of Commerce.

It hasn't escaped my attention that over the past 86 years some very famous people have appeared on this podium, including 11 Canadian Prime Ministers, nine British Prime Ministers, a number of U.S. Presidents, David Rockefeller and Billy Graham!

Unfortunately, unlike those speakers, I can't claim to represent government, international capitalism or God! What my organization does represent is 168 Chambers of Commerce and Boards of Trade--65,000 members across Ontario. Although we include large corporations, most of our member firms are small companies.

While they represent the majority of business enterprises in this great province and have created most of the new jobs over the past decade, I think it's fair to say that few of them, individually, would ever have a voice in a forum like this.

It's my privilege and my challenge, as President of the Ontario Chamber, to let their voice be heard. And I must say our members have a lot on their minds.

When I started preparing these remarks, I chose an old theme--Business and the NDP government--Rhetoric versus Reality.

This theme has served me well, I've discovered. In fact, the same theme has had a different punch line every month since the NDP government took office!

My thrust is that whether you're looking at a political party, a business association, or even a business, rhetoric is important if you're the head of any of these organizations, but if you're really interested in demonstrating leadership, you have to translate that rhetoric into action.

Well, in the midst of preparing my speech, Ontario Treasurer Floyd Laughren released the government's budget. And in the week and a half since, the province has been awash in rhetoric from every conceivable source.

If there's one sector that's definitely recession proof it is our political commentators, who've been working non-stop since April 29, providing their own "spin" to the Treasurer's message.

What, you may ask, can anyone possibly add to all that has been said these past few days?

I suppose I should announce that--10 days later--we are still very unhappy with the budget. In fact, let me give you a sample of the language that our members used at a board meeting in Windsor:

"I'm angry--outraged!"

"Is this government connected with the real world?"

"Has business become the agent of social change in this province?"

"It's clear that this government is anti-business."

"This government is determined to implement its agenda--in spite of affordability."

By the way, all of those comments came before the budget was announced. Whether any of these emotional statements are well-founded or not doesn't much matter. This is the language being used and these are the perceptions of the business community across the province. I expect it may be the language used in many of your organizations too.

Quite frankly, I don't see much sense in dwelling on the budget any more. Any business leader can score points with his own constituents by restating obvious grievances. So, for that matter, can any labour leader or politician.

And quotable quotes and pithy zingers are a great way to make the papers or crack the airways. But this approach, it seems to me, isn't very constructive.

More to the point, it delays the process of two- or three-way discussion that is so desperately needed if business, government and labour are ever to come to some sort of understanding about the nature and magnitude of the competitive problems currently facing this province.

So, for the next few minutes, I'll attempt to get behind the rhetoric and sloganeering of the past few weeks. I'll suggest that the path is still open for cooperation between business and the government, but that what's urgently needed to make this a reality is a new consultative process that replaces confrontation with consensus.

I want to begin by giving you a fuller sense of where I come from as a representative of the Chamber. The Chamber is a broad-based non-partisan organization.

As I said, we have 65,000 members in cities and towns from Ear Falls to Metro Toronto. And we've been around a long time--in fact, 1991 marks our 80th anniversary.

Our activities are volunteer-driven. People participate in the Chamber movement because they want to make a difference--in their community--across the province. Because of the broad business base I mentioned, we reflect a mosaic of views and no "one" view when it comes to most issues. And that's to be expected of an organization that represents businesses from all sectors, sizes and nationalities.

If you asked our members what we exist to do, they might tell you that the Ontario Chamber is an opportunity to pay "civic rent." On a less lofty note, they'd probably add that the Chamber also provides an opportunity for:

1. Networking
2. Education on topics of interest
3. Access to government

On that last point, I would argue that the Chamber is the most effective pipeline a provincial government could want in terms of two-way discussion with Ontario business. I say that because we are actively outbound to our membership. We work to help explain government policy and plans. This happens best at the implementation stage. And on the inbound side of the equation, we have the ability to provide province-wide reaction to government plans at the planning stage.

The Chamber does have a mission--"to be the recognized voice of business, committed to economic prosperity in Ontario"--and I would add an Ontario that is part of a Canada that may have a different distribution of federal-provincial powers, but one that definitely stretches non-stop from sea to sea to sea.

Now that's our rhetoric!

And our theme for the '90s is--"building a better tomorrow"--hardly a concept that would spark heated debate. But we do have a more specific agenda consisting of four points:

First, the creation of an environmental legacy we can proudly hand to our children. And we've initiated a number of targeted activities to help bring this about. For example, we've created an environmental starter kit that can be used by any local Chamber to launch a local initiative.

This may seem trivial to a Toronto audience, but, I can assure you, it has real value to smaller communities and companies. Thirty-six committees have been spawned province-wide looking at various areas of environmental concern. We publish a newsletter, Environews, in an effort to build awareness and share ideas. This newsletter gives practical "how to do it" advice. It features local communities that we hold up as models to be emulated.

To give you just one local example, we all take pride in the Cobourg Chamber of Commerce who, through support of an environmental youth corps, raised the profile of the Blue Box recycling program and introduced a composting program in their community.

Our second point is international competitiveness. Here we developed an export seminar with the Ministry of Industry, Trade and Technology (MITT) that provides any community with a road map to pick businesses that stand a good chance of being successful in the international market. If you've got what it takes, the seminar aims you at appropriate provincial government offices here and abroad.

The Sault Ste. Marie Chamber of Commerce ran this seminar not long ago as part of the effort to strengthen and diversify the economic base of the community.

We manage the Taiwan business office on behalf of the MITT. And on-going discussions with appropriate ministries regarding the impact of government activity on the business climate within the province.

Our third point is the creation of a world-class competitive work force. And here our activities have included co-sponsoring a number of programs with the Ontario government such as the annual employer equity awards and a student venture capital program. Our members serve on the Ministry of Education's Learning Programs Advisory Committee, helping shape curriculum not just for higher education and apprenticeship programs, but for the graduating class of 2001 who are in elementary school today.

Our fourth point is the need for a sturdy infrastructure. Infrastructure is part of the competitive equation and recognizes that we must maintain a first-class transportation system and access to a reliable, available and affordable supply of energy if we are to maintain our standard of living. And here we've undertaken studies and brought forth findings on everything from four-laning the Trans Canada Highway to the need for energy planning to avoid shortfalls in the early part of the 21st century.

So those are our realities--no headlines, just hard work, real work

Now let's shift attention to our NDP government. When he was elected, Premier Bob Rae promised, and I quote, a "method of consultation and means of consultation that's more extensive, more comprehensive, than any of our predecessors."

The reality, or at least the business perception, is that decisions have been made, and are in the process of being made, without any consultation whatsoever. Consultation appears to mean: "We've decided what's best and now we're telling you what we've decided."

Examples include the workers' protection fund, which reportedly will mandate a payment of up to $5,000 per worker if a firm ceases doing business. If this program is funded by a payroll tax, this would harm businesses who never expect to leave and could lead to the earlier closure of firms in trouble. On the other hand, can we really afford to pay for this fund out of general revenues?

And the proposal to extend officers' and directors' liability simply suggests a fundamental lack of business understanding. In fact, at a recent Chamber board meeting, one of our members wondered if organized labour is now using the legislative process to gain concessions that bargaining wouldn't give them. This is a harsh observation, but one that won't go unnoticed by those looking at Ontario as a place to invest.

The bottom line is that while we Canadians certainly prefer the balance between public sector and the market economy tipped the way it is as compared to our U.S. neighbours, we certainly don't want to be tipped over and go out of business because of further layers of taxation, regulation, control and bureaucracy.

The key question our members are asking is whether or not this government has any notion of how much public sector activity we can absorb before it overruns the ability of our market economy to support it?

Let's start with taxes.

Tax is a topic like weather that everybody discusses but we all feel helpless to do anything about. Let me put it in perspective by referencing a real Ontario small business--a florist in a small town. "Something's wrong when I spend more time answering government questions and filling in forms than I do selling flowers," is his view.

If a small business in Ontario is profitable it pays four municipal taxes, 11 provincial taxes including a tire tax and the GTA if they're located in Metro, and seven federal taxes, including an unharmonized PST and GST. So while we may not be the most taxed people in the world--yet (I think Sweden still has that dubious honour)--we probably have the most layers of taxation in the world with each layer creating its own set of time-consuming paperwork.

Our recommendations to this government were that they do nothing to increase the tax burden and find ways to simplify the tax structure to reduce the paperwork burden. Instead we got an increase in fuel tax and some of the assistance targeted at small business taken away! Looking at the overall thrust of this government one wonders if we're moving more and more towards central planning and authority. The irony is that this comes at a time when private business is trying to become decentralized and customer-driven.

The reason business is moving towards decentralization is to speed up the decision making process, empowering front line employees. This approach keeps us in close touch with our customers and allows us to meet their needs. It seems to me that government, no less than business, should have a genuine interest in meeting customer needs. If we're customer-driven, they should be citizen-driven, and I mean all citizens.

This new government shouldn't leave us with the impression that, having waited so long to assume political leadership in the province, they'll try to quickly solve every social issue on the horizon. To do this without any regard for affordability or long-term accountability is not only bad policy, it's poor politics.

And what's being offered, particularly deficit spending and central planning, seem out of touch with 1990s economic realities. At a minimum, let's get federal and provincial fiscal strategies aligned.

As I said, business today is casting aside the centralized model and opening up to employee empowerment and customer input. I believe we, in business, have some insight that has value, but we sometimes can't help but wonder if anyone within the government is really all that interested in listening.

I was certainly wondering that a few weeks ago as were some fellow business groups, including the Canadian Manufacturers' Association and the Retail Council of Canada.

We met with Premier Bob Rae on April 26 to discuss the consultative process. Now you may already be skeptical about a meeting like this, considering the budget that emerged a few days later. But we weren't in there to change any minds on the current budget. That document, we knew, was already formulated.

We were attempting to make the Premier aware of our level of frustration and to offer to work with him to build a consultative model that could work to everyone's benefit. We argued that the government's current approach of soliciting broad input, withdrawing to the political backrooms and then unveiling a fully hatched idea that pleases no one, had to change.

This approach has a built-in tendency to have broad, vague goals and solutions that, in trying to satisfy everyone, satisfy no one.

We proposed a model that would have a narrow and specific scope--a specific deadline and a reasonable schedule that takes into account that private sector members have businesses to run. The model includes a limited number of people representing major stakeholders. Each person around the table would have the responsibility to reflect the opinions of his or her community.

In addition, they'd have the responsibility to keep these same communities advised on progress. The stakeholders themselves would be empowered to make trade-offs, design the solutions and even play a role in implementation. This is called buying in along the way, not complaining after the fact. We even suggested that this model be applied to a limited number of topics that are already in the "consultative process."

1. Environmental Bill of Rights
2. Law of Standing
3. Labour Code Amendments

We also recommended that government and members of the private sector attend a conference where the focus would totally be on process--where we could talk about what each of us is trying to achieve and what we think the major obstacles are.

For example, we might well discover that when business talks about improving the quality of graduates from the education system and our new government talks about education equity, that the root cause of both problems might be traced to early education where students are influenced for the rest of their lives.

I'm pleased to report that the Premier seemed genuinely interested in this approach and indicated he would give it some personal attention. And I'm even more pleased that I later got a phone call from the Deputy Environment Minister's office asking me to meet with him regarding the consultative process and the proposed Environmental Bill of Rights.

We met yesterday morning, had a good exchange of opinions, and agreed to pursue the idea further. It is a small step but a significant one. The real test will be on follow through over the next few weeks. But this is exactly what we need--small but significant steps that begin to bridge the gap between this government and the private sector.

Bridging the gap will take work--real commitment on the part of business. We all have to move beyond simply expressing displeasure with policies and work to educate the public regarding what being in business is really like. My challenge to those of you in the private sector is to talk in honest terms about the competitiveness issue with your employees.

This shouldn't be an exercise in sabre rattling but a "facts of life" view of how a business makes money in a tough global competitive marketplace, how a business pays taxes, how a business contributes to economic well-being, how business makes a social-infrastructure possible and sustainable.

After the budget presentation, Treasurer Laughren told Opposition Members of the Provincial Legislature that they need not fear that business will be driven from Ontario because "companies locate here for the quality of life."

The simple truth is that without a vibrant private sector there is no lasting job creation and, without job creation, we won't have the revenue to fund the quality of life that we take for granted.

I would caution the new NDP government that the business community negotiates and debates in ways that are different than they are perhaps accustomed to. When an issue surfaces, there will be initial reaction from the business community, perhaps directly, perhaps through an association. At some point, however, the business person stops debating and determines how to deal with the realities of the situation. We don't stop paying taxes, we don't stop paying employees health benefits, we figure out how to work with the realities.

Working with the realities may mean restructuring, finding new markets or new products. It simply may mean cutting back operations or leaving altogether. You'll know when some companies scale down operations or leave. If they are big enough, it'll make the papers. In most cases you'll never even know it's happening until it's reflected in the tragic figures of job losses or corporate relocations out of province. This is reality.

I am President of the Ontario Chamber of Commerce. We, by definition, represent businesses that are located within the province. That is our reality. That's our responsibility.

And our members stand ready to help this province grow and prosper.

I honestly believe the NDP has a historic opportunity to break with past convention and build a truly broad-based consensus for economic recovery. The Chamber welcomes partnership, if it's equitable, because it would be in everyone's best interest.

The NDP's victory in 1990 was not, in my opinion, an ideological one. It stemmed from a sense of frustration and even anger at "politics as usual." I would suggest that it's time for all of us to practise the "politics of the unusual" by engaging in co-operation rather than confrontation. Our shared goal should be to get on with the task of making Ontario a better place for our children and grandchildren.

As I said at the outset, the Chamber has a vision for the 1990s of "building a better tomorrow." And by that we mean a better tomorrow for all Ontario residents not simply those engaged in business.

I think we all agree that there is much to be done in this province. We need to improve the environment, to educate and train our young people, to ensure economic security and to improve the overall quality of life.

And business can be a powerful ally in all of these efforts. What is needed from this government is commitment to partnership and to a consultative process that recognizes that a vibrant private sector is the key to getting our economy back on track.

Thank you very much.

The appreciation of the meeting was expressed by John Freyseng, Partner, Blaney, McMurtry, 5tapells, and a Director, The Empire Club of Canada.