Nov 10
18
McGuinty’s socialist religion brings Ontario to its knees
Financial Post – Nov. 16, 2010
Laggard Ontario
By Livio Di Matteo
The Ontario government will be tabling its fall economic statement in the legislature on Thursday. Premier Dalton McGuinty, who has been seemingly unaware of the impact of his energy and economic policies on the province’s economy, would do well to take heed from the danger signs provided by another update – the recent Statistics Canada update to provincial GDP numbers.
The new StatsCan numbers show that, as a result of the recession, real gross domestic product in 2009 fell in every province except Manitoba. Moreover, the declines were steepest in Newfoundland and Labrador, Saskatchewan, Alberta and Ontario.
Being in the company of so many poor performers will not be a suitable defence for Ontario’s economic record for two main reasons. First, while Ontario’s decline was smaller than that in Newfoundland, Alberta and Saskatchewan, those provinces can blame their drop primarily on the fall in natural resource commodity prices, namely oil. Ontario’s key natural resource sector – forestry – while hit hard over the last decade, is not as important a sector to Ontario as oil and gas is in these other provinces. The economy will grow in Newfoundland, Alberta and Saskatchewan as oil and gas prices recover.
Second, Ontario’s dismal performance caps a decade of dismal performance. Ontario has become a laggard in per capita GDP, as highlighted when it entered the ranks of the “have-not” provinces and began to collect equalization. A survey of statistics for the last two decades shows that Ontario’s share of total provincial GDP has declined from 42% in 1990 to 37% in 2010. More ominous, the bulk of that decline has occurred since 2000 – largely coinciding with McGuinty’s decade of political power. Whereas in 1990, productive Ontario’s share of national output exceeded its population share, we now are witnessing the sorry spectacle of the reverse.
When Ontario’s economic productivity performance is examined in terms of real per-capita GDP, it emerges that Ontario’s output has stagnated for an entire decade. Between 2000 and 2010, real percapita GDP in Ontario actually declined by 8%. While one may wish to ascribe this to the impact of the recession and the global financial crisis since 2008, the fact remains that Ontario’s performance was the worst of all 10 provinces.