Ontario's Economic Revolution
The Empire Club of Canada Addresses (Toronto, Canada), 10 Apr 2001, p. 315-325
Harris, The Hon. Mike, Speaker
Media Type
Item Type
What we all want for Ontario. Making a difference since 1995. The critics wrong as Ontario prospered. Some examples of the relentless desire forinnovation in so many of Ontario businesses. Keeping Ontario's economy strong into the future. Some economic statistics. Rising to a challenge from Mr. Baillie with regard to Canada's economy. A critical time for Ontario's economy, and how that is so. Some strategies to use. Job creation. Making some tough decisions. The five strategies of the economic revolution at Queen's Park, with a brief discussion of each. The Red Tape Commission and its introduction of a new business impact test. The importance of Ontario tax cuts. What more needs to be done.
Date of Original
10 Apr 2001
Language of Item
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Empire Club of Canada
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Full Text
The Hon. Mike Harris
Premier, Province of Ontario
Chairman: Catherine Steele
President, The Empire Club of Canada

Head Table Guests

The Most Rev. Terence E. Finlay, Archbishop of the Ecclesiastical Province of Ontario, Anglican Church of Canada, Archbishop of The Diocese of Toronto and Honorary Chaplain, The Empire Club of Canada; George L. Cooke, President and CEO, The Dominion of Canada General Insurance Company and Past President, The Empire Club of Canada; John Sadler, Managing Director, Clairvest Group Inc. and Director, The Empire Club of Canada; Willis L. Blair, Former Mayor of East York, Vice-Chairman, Toronto East General Hospital Foundation and Director, The Empire Club of Canada; Tom Long, Consultant, Monitor Group; Robert Williams, Director, Ontario Legislature Internship Program; Robert J. Metras, Vice-President, eHealth Solutions Group, BCE Emergis; D'Arcy Delamere, Vice-President, Group Insurance, Clarica; Lillian Morgenthau, President, Canada's Association for the Fifty-Plus; Andre Turcotte, President and CEO, Feedback Research Corporation; Borden Rosiak, CFO, Toronto's Bid for the 2000 Olympics; and Ron Loucks, Executive Vice-President, eHealth, BCE Emergis.

Introduction by Catherine Steele

It is my privilege to welcome our guest speaker, The Honourable Mike Harris, Premier of Ontario and M.P.P. for Nipissing.

On April 19, a new session of the Ontario Legislature will begin. The Globe and Mail this past weekend highlighted significant job growth for Canada last month while at the same time pointing out the economic challenges for Canada going forward in light of what is happening with our neighbours in the United States.

Ontario has enjoyed a period of unprecedented economic prosperity and job growth since the mid-nineties. And if the economic prosperity of Ontario is the film, then starring in the leading role of getting Ontario back on track through economic policies for business and taxpayers is the current Ontario government led by Premier Harris.

For those Ontarians who are not connected to government or politics, government is often seen as some remote entity functioning only to interfere through regulation or taxation in everyday lives. Making government ""real"" or showing the value of government to those just trying to earn a living to support their family is a huge challenge.

Approaching the two-year mark of its second mandate, next week the Mike Harris government will lay out its plan on how it will prove the value of its government to Ontarians. Having gained a reputation for doing what he says he will do, Ontarians are looking to Mike Harris for leadership to make sure the current economic challenges are just a speed bump on the road of Ontario's prosperity.

First elected as Premier in 1995 and re-elected with a second majority government in 1999, thereby making Ontario history, ladies and gentlemen please welcome the Premier of Ontario, The Honourable Mike Harris, M.P.P. for Nippissing to The Empire Club of Canada.

Mike Harris

It's a great privilege to be speaking to the Empire Club today.

It's always a pleasure to be here and to speak to this organisation that dedicates itself to addressing the important issues facing our province and our country. And it's great to be joined today by friends, colleagues and leaders of the business community.

We all want the same things for Ontario. We all want this province to be a place where hard work and innovation are rewarded.

Since 1995, our team has set out to make a difference. We were elected to make tough decisions and we made them.

Our critics said we wouldn't be able to keep our promises to cut taxes. They said we couldn't balance the budget. But our critics were wrong. We did what we said we would do-and Ontario prospered as a result.

While we have accomplished a lot together, we can't afford to stop moving forward. That's why I'm proud to see a relentless desire for innovation in so many of our Ontario businesses.

In fact, just this morning I visited a downtown Toronto business-Q9 Networks. Q9 is a made-in-Ontario, high-tech success story. It provides a secure environment for business Web servers so that companies are protected against costly glitches in e-mail and Internet service. Just yesterday they announced a $100-million expansion here in Ontario that will lead to the creation of 100 new jobs. Q9 is an example of tens of thousands of other businesses, entrepreneurs and risk takers who have helped to create jobs to get Ontario back on the right track. And we need more of them to keep Ontario's economy strong into the future.

I don't have to tell you that we live in a constantly changing, competitive global economy. You compete not only with businesses in other provinces and states, but also with businesses in countries around the world. Ontario must continue to change or risk being left behind. Canada must change or risk falling further behind.

Six weeks ago, Charles Baillie, TD Bank Chairman and CEO, spoke to the Canadian Club. I'm sure that a number of you were in the room. He talked of how Canada's disposable income has fallen behind that of the United States; how our standard of living has declined relative, not only to the United States, but to countries such as Denmark and Norway, that traditionally have lagged behind us. In the 60s and 70s, Canada led the United States in per-capita economic growth. During the 80s, the States led us. During the 90s, the gap increased. Over the past few weeks, we've watched the dollar fall to a near record low.

Now, these statistics apply to the Canadian economy as a whole. As I have said, Ontario's economy has been strong. But Ontarians are Canadians first. The Canadian dollar is our dollar. And the national economy is important to our provincial economy.

Yet in his February speech, Charles Baillie did not focus on the past or bemoan Canada's economic predicament. Instead, he issued a challenge: ""to increase our standard of living so that in 15 years it is not just equal to the United States; it is better.""

His challenge is ironic, because it echoes the goal that my team has set for the Province of Ontario: to have the best-performing economy and the highest quality of life in North America over the next 10 to 15 years. It is an ambitious, audacious goal just like Mr. Baillie's. But I am confident Canada can rise to Mr. Baillie's challenge-just as Ontario can rise to the challenge we've set.

The question is how do we meet that challenge? What steps do we take? What is clear is that we won't meet that challenge by offering failed, stale ideas. Our country and our province cannot move forward by going back to the twisted logic of ""tax-and-spend"" economics.

We can't go back to the days of deficit spending, inefficient government and job-killing red tape. Those ideas resulted in an annual deficit in Ontario that approached $11 billion and led to a prolonged economic recession. And, just as seriously, those ideas led to a malaise of mediocrity in government services-including our education system. Mediocrity in education is a real barrier to investment and prosperity.

But now, some political leaders are trying to serve up those same, stale ideas as a fresh way to keep Ontario competitive in the global marketplace. Sure, they'll package them differently. And sometimes these political leaders will pay lip service to fiscal responsibility and lower taxes-but they really don't believe in these principles. And I think that's dangerous and irresponsible.

Ladies and gentlemen, with the constant changes in the global economy, this is a critical time for Ontario's economy. You've read the headlines and watched the developments of the past few months.

Ontario is home to skilled and experienced people, with backgrounds in over 170 countries and who speak more than 100 languages. The diversity and talent of our population is one of our greatest economic strengths. A stronger global mindset is key to the aggressive pursuit of new investment.

Last week, Governor Pataki and I met to discuss ways of increasing trade between Ontario and New York. Together we will convene a full-scale, cross-border economic summit later this spring.

While government action is important to maintaining our global orientation and expanding trade with the world, everyone has a role to play. Businesses, too, must adopt a global mindset. In 1998, of the over 14,000 Ontario companies with sales under $25 million, only 15 per cent actually exported. I believe that we should embrace a ""citizen of the world"" attitude, understand that we live and compete in a global economy, and develop or maintain international language skills.

The fourth strategy is to build on the strengths of our industries and regions. While Ontario's economy has grown and we have had tremendous job growth since 1995, not all regions have shared equally in that prosperity. Consider last year's figures for new job creation. As a province, Ontario did very well. Yet the regional breakdown tells a different tale: Greater Toronto Area: 105,500 new jobs last year; Central Ontario: 48,500 new jobs; Eastern Ontario: 6,300; Northern Ontario: 4,600; and in Southwestern Ontario, 19,200 new jobs were created last year. In short, rural Ontario, while experiencing slower growth, is much better off today than in 1995.

Now, it's important to remember that these numbers represent real people-people who were able to tell their families, ""I got the job."" Each one is a success story. But I believe there's even more we can do to help spread our job-creation success throughout Ontario.

On Thursday, I accepted the report of a special task force on rural economic renewal, and immediately set about implementing some of its recommendations to help make Ontario's rural communities stronger.

We also must ensure that all our regions have the infrastructure needed to support job creation and attract investment. That means moving forward with initiatives such as Smart Growth and SuperBuild. Our made-inOntario vision of Smart Growth will foster growth; not stop it.

While Ontario created nearly 16,000 jobs in March, you know that we lost over 37,000 jobs in February. And when I read a number like 37,000 job losses, I don't think of it as a statistic. I think about how it will affect those people. I think of the disappointment of those men and women and their families.

I think about how important it is for people to have the dignity of a job and the sense that they are providing for their family. And it reminds me of something very important: that we can't rest. The global economy is like a race without an end and you can't stop just because you lead after the first lap. We owe it to the hard-working people of this province to not let them down.

The only way to keep ahead and to meet the challenge of a global economy is by having the courage to make the tough decisions that will help Ontario evolve and adapt. The only way is to create ""Ontario's own economic revolution."" I believe that we need to transform Ontario's economy to position it to compete with businesses from Calgary to California to China.

Lasting prosperity requires long-term, visionary thinking. If we are prepared to look ahead, to make the tough decisions, together we can build the long-term prosperity we are looking for. And my team at Queen's Park has been looking ahead.

Long before there was any talk of a global economic slowdown, during a period of strong growth in Ontario we set up the Ontario Jobs and Investment Board to think about ways to maintain our economic advantage well into the future. That long-term approach is what has led us to a new economic revolution. And that revolution has five strategies at its heart:

1. Developing new knowledge and skills;
2. Creating an ""innovation culture"" that allows our economy to diversify;
3. Adopting a strong, global orientation;
4. Building on our industry and regional strengths;
5. Maintaining a favourable investment climate.

The first strategy is to ensure that Ontario's people have the knowledge and skills that provide the foundation for sustained prosperity. I see the day when Ontario is recognised around the world for the quality, the skills and the adaptability of its work force. Knowledge and skills are essential to create opportunity for future generations to improve our standard of living.

The recent results of the grade 10 literacy tests were unacceptable and reinforce our strongly-held beliefs that new standards, new curriculum, new accountability are absolute necessities to improve the quality of our public education system. Without a sound education, an entire generation risks being left behind. That's why I'm so passionately committed to education reform: to technology in the classroom, to life-long learning, to performance-based accountability and to flexibility and choice.

We do lead the world in one area: 51 per cent of our province's adults have completed post-secondary education compared to 35 per cent in the United States and 24 per cent in Great Britain. That's a great advantage.

We need to continue to capitalise on the advantages of our educated, motivated work force. Yet this is not the responsibility of government alone. Businesses must be partners by investing in their employees and equipping them with new skills to compete in a rapidly changing, evolving global economy.

The second strategy to a stronger Ontario economy is to create an ""innovation culture."" This was a key recommendation of the Ontario Jobs and Investment Board report.

We need to build the innovation capacity that encourages entrepreneurs and new thinkers, allows new discoveries and new ideas to be commercialised and supports research and development.

Innovation is essential to diversification of Ontario's economy. And diversify we must. I believe that we must decrease Ontario's dependence on traditional industries by encouraging new and exciting areas of growth, such as high-tech.

Since 1996, the high-tech sector has increased from just over 4 per cent of Ontario's GDP to nearly 8 per cent. That is great progress, but it's not nearly good enough. That's just a start-because Ontario needs to have even more growth in the high-tech and other non-traditional sectors to compete in the 21st century.

In a world where rapid change is the norm, I believe Ontario must embrace innovation to maintain its competitive edge. Yes, we have factions in our province that want to take us backwards. They resist the change and exciting opportunities that are ours to be had if we have the courage to act. We need to continue to move forward. We need to share these new ideas. To look at best practices. And to raise the bar.

The third strategy is to adopt a strong, global orientation.

Visionary growth means focusing on development that will improve the efficiency and competitiveness of the economy.

And while we all know that a healthy economy is important, we must also not forget how crucial it is to have clean air and water for our children.

That's why we initiated Drive Clean. That's why we made a commitment to reduce emissions from our coal-fired power plants to take our emissions per kilo-watt of electricity well below our neighbours in the United States.

That's why we created new parks under Lands for Life. And it's why we're continuing our commitment to a better quality of life over the long term through Smart Growth. Our plan will encourage growth and offer people choices of how and where they want to live. But as we all know, with growth comes infrastructure needs.

That's where the SuperBuild Corporation comes in. The goal of SuperBuild is to improve the province's capital planning and investment in infrastructure. It will mean new or renovated hospitals, colleges and universities, and highways that will help us make our communities strong, attractive places to live and work.

The fifth strategy to strengthen Ontario's economy is to maintain a favourable investment climate.

Among other things, that means continuing to eliminate job-killing regulations, continuing to reduce tax burdens and continuing to make sure that our business and industrial sectors can enjoy a competitive regulatory and tax environment.

Last month, I renewed the mandate of the Red Tape Commission and appointed Steve Gilchrist as its co-chair. The Commission will introduce a new ""business impact"" test that will apply to any proposed new policy or regulation that might adversely affect investment or jobs.

Look around the world, look within Canada, and no longer will you find serious disagreement that low, competitive taxes strengthen the economy and create jobs. In its most recent report, the Conference Board of Canada calls Ontario's tax cuts ""a boon for taxpayers,"" during a time of slower growth in the United States. The Business Council on National Issues says that: ""Lower corporate taxes will improve the odds for investment in the leading edge technology that creates more high-skill opportunities.""

And even Prime Minister Chretien recognised the importance of Ontario's tax cuts when he told students at North Carolina's Duke University last December: ""Our tax system is now very competitive with the Americans. If you look at Ontario, the income tax, federal and provincial, is competitive with New York, Michigan, California and the state of Washington.""

He wasn't always so supportive of our tax cuts. But he seems to have come around and understands a basic truth about competitive taxes.

As the economy slows, some political leaders ask how we can continue to cut taxes. The better question is: ""How can we afford not to keep Ontario's tax rates competitive and low?""

More needs to be done. Despite Ontario's leadership, personal income taxes in Canada are still the highest in the G7. We need to continue reducing the burden on taxpayers so we can continue to hang on to jobs and protect the gains we have made. Competitive tax rates are our best hedge against an economic slowdown. ""Recession protection,"" you might say.

Ladies and gentlemen, I believe that Ontario needs an economic revolution if businesses and entrepreneurs are to continue to grow and create jobs.

As a political leader who has had to take on some tough challenges and who has fought political opponents every step of the way, I stand before you more committed and determined than ever to see that everything we have built remains strong. And more determined than ever to build Ontario's future.

We can and will make the tough decisions required to lead an economic revolution.

We will continue to practice sound fiscal management. Taxes will remain competitive.

The budget will remain balanced. Red tape will be cut.

And Ontario will continue to grow and prosper in the 21st century.

Thank you very much.

The appreciation of the meeting was expressed by George L. Cooke, President and CEO, The Dominion of Canada General Insurance Company and Past President, The Empire Club of Canada.

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Ontario's Economic Revolution

What we all want for Ontario. Making a difference since 1995. The critics wrong as Ontario prospered. Some examples of the relentless desire forinnovation in so many of Ontario businesses. Keeping Ontario's economy strong into the future. Some economic statistics. Rising to a challenge from Mr. Baillie with regard to Canada's economy. A critical time for Ontario's economy, and how that is so. Some strategies to use. Job creation. Making some tough decisions. The five strategies of the economic revolution at Queen's Park, with a brief discussion of each. The Red Tape Commission and its introduction of a new business impact test. The importance of Ontario tax cuts. What more needs to be done.