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Ontario in decline: From Canada's economic engine to clunker Can Dalton McGuinty see the light and reverse the decay with his forthcoming budget? By Paul Vieira, Financial Post March 23, 2009 A month before Dalton McGuinty, the Liberal Ontario Premier, hit the election trail in the fall of 2007 to seek a second mandate, an ominous warning sign of the province's crumbling economic stature emerged that should have provided fodder for the campaign. An analysis from leading Bay Street economist Dale Orr said Ontarians' standard of living had plummeted -- from a peak of 15% above the Canadian average in the mid-1980s to just more than 5%. Accompanying the analysis was a warning of further erosion by 2010. Alas, the eye-opening report hardly generated buzz during the election campaign. Instead, most of the talk was about a Conservative proposal to provide government funding for faith-based schooling. Ontarians didn't warm to the idea and re-elected Mr. McGuinty's Liberals with another majority. Reflecting today on that report, Mr. Orr said his nightmare scenario for Ontario has unfolded as envisaged. If anything, the situation in the province may be worse. As the McGuinty government prepares to table its sixth provincial budget on Thursday, it does so knowing the province that was once the country's economic engine is now the clunker of the confederation. While former have-nots such as Saskatchewan post surpluses this fiscal year, Ontario is bleeding red ink--a cumulative two-year deficit of $18-billion. Ontario's dramatic decline comes as no accident. It was decades in the making, based on a combination of mismanaged public finances and the ascent of emerging economies at the expense of high-cost manufacturing. Upon taking office in 2003, Mr. McGuinty moved to pour tens of billions of dollars into improving government services -- health care, education and social programs targeting the downtrodden -- while neglecting the changing economic landscape. To help finance this agenda, he raised corporate taxes and slapped a health-care levy on households. These moves, analysts say, helped cement Ontario as one of the least attractive places for companies to invest. Analysts wonder whether the economic crisis is finally going to force Mr. McGuinty and Dwight Duncan, his Minister of Finance, to make tough choices on spending and undertake the kind of tax reform -- as displayed this week by New Brunswick-- that will help the province attract investment to offset heavy job losses in Ontario. Derek Burleton, senior economist at Toronto-Dominion Bank, said Thursday's budget presents a possible turning point for the province. "There is no doubt we are undergoing a period of transformation as some of the industries that have driven healthy gains in living standards are on the decline," said Mr. Burleton, who co-authored a report with TD chief economist Don Drummond last fall that called on the province to embrace a "sweeping" new economic vision. "Given the sizeable deficit the province faces, that will put increasing pressure on the government to prioritize." One of those priorities is for Mr. McGuinty to cease his preferred manner of dealing with difficulties in the industrial heartland -- funneling tens of millions of dollars to the manufacturing sector, particularly automotive, through targeted tax relief or direct subsidies. "What the province should have been doing over the years was to make the province more flexible in attracting new businesses and not diverting resources into declining sectors," said Finn Poschmann, vice-president of research at the C. D. Howe Institute, a Toronto-based think-tank that has been critical of Ontario's tax breaks for struggling sectors such as autos and forest products. "Do you want to steer resources to the sectors where the outlook is positive and growing? Or do you want to divert resources from these stars, which are more likely to generate the long-term employment and wage growth that Ontario is accustomed to?" The manufacturing sector, and its high-paying jobs, used to be the province's crown jewel. But as a component of Ontario's GDP, it has dropped from a peak of 23% in 2000 to roughly 18% on factors such as a richer Canadian dollar, higher energy costs and offshore competition. It is expected to fall further once the dust settles from this crisis. The province was largely able to mask the decline in manufacturing through a combination of a booming housing market, a surge in public sector hiring and a robust financial services sector. The financial crisis, however, has exposed those flaws. For the period starting in 2003, only Quebec and Nova Scotia have produced weaker growth than Ontario. Forecasts suggest Ontario was the only province whose economy shrank last year, and economists say it will record either the worst, or second-worst performance, among provinces this year. Scotia Capital, for instance, has Ontario's economy contracting 2.9% in 2009, and posting meagre growth of 1.4% in 2010, below the expected national average. Of the roughly 295,000 jobs lost in Canada since October, nearly half have come from the province. The result? Unemployment in Ontario, at 8.7%, is now higher than it is the United States (8.1%) and above Quebec's 7.9% jobless rate-- the first time that has happened in three decades. The news is not expected to get any better any time soon. "We believe that the unemployment rate in Canada's largest province should hit 10% by 2010, even if the automobile sector's restructuring plan works," said Sebastian Lavoie, an economist at Laurentian Bank Securities. Further, Mr. Lavoie said wage growth in the province is destined to take a hit. In the past, companies were forced to offer comparable wages and benefits based on what the Canadian Auto Workers would negotiate with the Detroit car makers. But Mr. Lavoie said that will no longer be the case, with CAW accepting salary freezes and making concessions on perks such as cost-of-living-allowance. The financial crisis has just exacerbated a growing trend, said Mary Webb, senior economist at Scotia Capital. Ontario's receipts from foreign-bound exports last year represent an 11.7% drop from a peak of $185.1-billion recorded in 2000. For the same time period, Quebec's receipts fell by just 2.9%. For the rest of Canada, excluding Ontario and Quebec, receipts have surged a whopping 72%. Compounding Ontario's problem is the emergence of big deficit, fuelled in part by shrinking tax revenue and years of escalated program spending. Under Mr. McGuinty, program spending now stands at $23-billion per year more than when he took office in October, 2003, an increase of 36%. In fiscal year, 2007-08, program spending climbed more than 10% to $87.6-billion, compared with a 5.4% increase in tax revenue. Observers note Mr. McGuinty's ascent to power in 2003 can be attributed to a desire for change among Ontarians after years of the hard-nosed, right-leaning Conservative regime that earned scorned for cutting government services. Mr. McGuinty's two terms have been dominated by a push to restore spending on public goods such as education, health care, infrastructure and social services. Analysts say Mr. McGuinty was on the right track to bolster some key building blocks, such as post-secondary education. To help pay for this, Mr. McGuinty raised the corporate tax -- to 14% from 12% --in his first budget. "The balance of [McGuinty's] approach was not quite right," said Jack Mintz, public policy professor at the University of Calgary and renowned tax expert. "The problem was trying to [reinvest in public services] while at the same time trying to maintain a vibrant industrial sector." Mr. Mintz and other analysts say Ontario's tax regime, as currently structured, is suffocating the province's ability to attract investment and rebuild the economy. Last year, Jim Flaherty, the federal Finance Minister, suggested the tax system was making Ontario the "last place" businesses wanted to invest. Mr. Flaherty took lots of heat for that remark, but he was on to something. Mr. Mintz's research indicates the province's marginal effective tax rate on capital, which encompasses all levies slapped on investment in the province, stands at 35%, six points higher than the Canadian average, 29%. Further, the Ontario rate ranks as the ninth-highest in the world, tied with Japan. Despite moves to eliminate capital tax in 2010, and other business tax reductions from the federal government, Ontario's marginal rate is expected to drop only three points to 32% by 2012 -- still higher than all provinces and exceeding the national average. "Ontario will not be successful in retaining existing businesses and attracting new ones if its taxation system is not on sound competitive footing with other provinces and countries," said the TD report by Messrs. Burleton and Drummond. There are signs that Mr. McGuinty is acknowledging the need to change. Despite previous opposition, he said in January the province would take a "long, hard look" at harmonizing its provincial sales tax with the GST. As currently structured, Ontario's sales tax derives almost half of its revenue from taxing business inputs such as productivity-enhancingequipment. Harmonizing with the GST would shift the tax burden to households, but economists argue it would boost business investment and make Ontario more attractive. In a C. D. Howe research paper he released yesterday, Mr. Poschmann said putting an end to the "archaic" sales tax and harmonizing with the GST would move Ontario from a high-tax jurisdiction to a medium-tax jurisdiction by 2012, with the marginal rate on investment falling just over 10 percentage points. A signal toward sales tax harmonization could be contained in Thursday's budget, although observers are hedging their bets given the potential voter backlash. Any further moves on taxation, whether business or personal, may have to wait given the province's monster deficit and an unwillingness to give up further revenue to fund public service initiatives. "Ontario is going to be deeply challenged," Mr. Mintz said, "because it is going to be very hard for the government to do anything when you are so fiscally restrained-- unless it wants to make the deficit even bigger now." Glen Hodgson, senior vice-president and chief economist at the Conference Board of Canada, said the needed tax reductions would not see the light of day until Ontario decides what to do about health-care spending, which is growing at an annual clip of 8% to 10% and is the single biggest expense item in the budget. "This is a catalytic moment for the province," Mr. Hodgson said. "The light bulb has gone on, but it is not burning brightly yet. A lot of people would like to return to the Old World. But I think the Old World is gone -and that's the dilemma Ontario faces." --------- MANITOBA, N.B. SET EXAMPLE: As Ontario attempts to pull itself out of its economic quagmire, it can look to the provinces of Manitoba and New Brunswick for leadership. While the recession is expected to hit every province, Manitoba comes out near the top in most forecasts as one of the country's better performers in 2009. In its outlook, the Conference Board of Canada projects slight growth in the province of 1%, powered by infrastructure projects and tax cuts. Jack Mintz, public policy professor at the University of Calgary, said Manitoba was, along with Ontario, considered a high-tax jurisdiction for business investment. But the government has moved and Manitoba's marginal effective tax rate on investment dropped from 37% in 2007 to 33.8% last year. It is now scheduled to fall to 26.7% by 2012. "It is on the high side, but it will be closer to the national average" in 2012,Mr. Mintz said. "From the point of view of people who need to make investment decisions now, they know these changes are in place over the next several years. So Manitoba looks more appealing." Manitoba also benefits from having one of the most diversified economies in Canada. Roughly 30% of its economy is agriculture, which is more resilient to economic downturns. Further, Manitoba has a diversified manufacturing base with aerospace and buses playing key roles - and, unlike autos, demand for those products continues to be fairly solid. It also has abundant, cheap hydroelectricity. In contrast, questions abound over the reliability of Ontario's power grid, especially in light of the 2003 blackout that blanketed the province and much of the U.S. northeast. Meanwhile, analysts have applauded New Brunswick for taking aggressive steps on taxation this week in an effort to make the province more attractive for both investors and workers. The main change is the replacement of the existing four-bracket personal income tax structure to a simpler two-bracket structure by 2012. The lowest rate will be 9% for workers earning less than $37,893. Beyond that threshold, a flat tax of 12% will be applied. Perhaps more stunning, however, is that New Brunswick plans to lower its general corporate tax rate from 13% to 12%, effective this year, and all the way down to 8% by 2012 - the lowest in the country. "The New Brunswick government appears to be relatively more proactive compared to other jurisdictions, taking bolder steps to improve its economic and fiscal roadmap," said Carlos Leitao, chief economist at Laurentian Bank Securities, in his analysis of the province's budget. Source: Paul Vieira, Financial Post pvieira@nationalpost.com ONE-TIME POWERHOUSE CAN'T KEEP UP WITH REST OF THE COUNTRY: Ont. Export Receipt Drop 11.7% Que. Export Receipt Drop 2.9% Receipt Rise Rest Of Canada 72% Ontario GDP Decline, 2009 2.9% RANKS OF WORKERS IN CANADA'S LARGEST PROVINCE TAKE IT ON THE CHIN: Ontario Unemployment 8.7% U.S. Unemployment 8.1% Quebec Unemployment 7.8% Ontario Unemployment, 2010 10% © Copyright © National Post

L'avertissement des banques à l'Ontario Mise à jour le mercredi 17 décembre 2008, 15 h 25 . Les grandes banques canadiennes affirment que l'Ontario perdra des emplois si le gouvernement n'abaisse pas son impôt aux sociétés. Dans un document présenté dans le cadre des consultations prébudgétaires, l'Association des banquiers canadiens (ABC) réclame que le taux d'imposition passe de 14 % à 10 %. Une baisse de quatre points de pourcentage représenterait 6 milliards de dollars de moins dans les coffres de la province. La présidente de l'ABC, Nancy Hughes Anthony, évoque le manque supposé de compétitivité de la province et laisse entendre que des emplois dans le domaine des affaires pourraient être perdus si Queen's Park ne se conforme pas à sa prescription. Interrogé à ce sujet mercredi matin à Saskatoon, le ministre des Finances de l'Ontario, Dwight Duncan, bouillait de rage. « Je rappellerai aux grandes banques que nous éliminons la taxe sur le capital et que des gens perdent leurs emplois tous les jours. Je ne crois pas que les menaces soient la bonne façon de faire des affaires. - Dwight Duncan, ministre des Finances de l'Ontario » Le premier ministre Dalton McGuinty a réagi plus posément en suggérant aux banques de recommencer à accorder des prêts financiers aux entreprises si elles souhaitent réellement aider l'économie. M. McGuinty ajoute que si l'Ontario envoyait moins d'argent à Ottawa, sa province pourrait accélérer les diminutions d'impôts aux entreprises. À Queen's Park, seuls les conservateurs croient que le gouvernement devrait réduire son impôt aux sociétés. Mais ils ajoutent que les grandes banques pourraient contribuer à stimuler l'économie si elles refilaient en entier à leurs clients les baisses de taux décrétées par la Banque du Canada. Extrait vidéoAppel aux banques pour faciliter le passage de la crise, explique Christian Grégoire.

Vers un déficit de 5 milliards? Mise à jour le vendredi 24 octobre 2008, 8 h 29 . L'Ontario se dirige vers un déficit plus grand que prévu, selon un nouveau rapport de la Banque TD. L'institution estime que la province atteindra un déficit de 3 à 5 milliards de dollars au cours des deux prochaines années. Mercredi, le ministre des Finances de l'Ontario a annoncé qu'il prévoit désormais un déficit de 500 milliards de dollars. La Banque TD croit que les finances de l'Ontario ne s'amélioreront pas au cours des deux prochaines années, notamment parce que le secteur manufacturier de la province a profité pendant trop longtemps de la faiblesse du dollar canadien et des prix du pétrole: « Ce sont des avantages corporatifs qui se sont érodés et qui ne vont pas revenir », mentionne l'économiste Pascal Gauthier, qui propose à l'Ontario de concentrer ses efforts sur d'autres secteurs pour diversifier sa croissance. La Banque TD ajoute que le gouvernement fédéral n'échappera pas aux budgets déficitaires: Ottawa doit s'attendre à un manque à gagner de 10 milliards de dollars d'ici deux ans. McGuinty: « L'année prochaine sera pire » Le pessimisme de la Banque TD semble en partie être partagé par le premier ministre ontarien Dalton McGuinty. En entrevue dans une station de radio privée de Toronto, jeudi matin, il a déclaré que la situation financière de la province serait encore plus précaire l'année prochaine. « L'année prochaine sera encore pire et l'année suivante aussi », a dit McGuinty. Il précise qu'il n'y aura pas de nouveaux investissements gouvernementaux dans la province et que les programmes existants seront ralentis. Pour le premier ministre, la chose la plus importante est d'avoir un plan pour éliminer le déficit. Questionné à savoir quel est son plan, Dalton McGuinty est resté vague, se bornant à promettre de nouveau de ne pas hausser les impôts. Lors de la campagne électorale de 2007, les libéraux avaient promis de présenter des budgets équilibrés. Version Tory Le chef conservateur John Tory s'est montré sceptique face au discours de son adversaire politique. « M. McGuinty est le roi des promesses rompues, et je pense que les citoyens ne le croient pas lorsqu'il dit qu'il n'augmentera pas les impôts. - John Tory » M. Tory ajoute que s'il était premier ministre, il aurait gelé les embauches dans la fonction publique et réduit les impôts afin de stimuler les investissements et les dépenses des Ontariens.

La Banque TD affirme que le déficit de l'Ontario pourrait atteindre jusqu'à 5 milliards d'ici deux ans; Dalton McGuinty prévient les Ontariens que la situation se détériorera l'an prochain. Pour en lire plus...

Liberals refuse to confirm report Ontario to run near $1-billion deficit Wed, 2008-10-22 13:04. By: THE CANADIAN PRESS TORONTO - The Ontario government refused to confirm Wednesday in advance of handing down its fall economic update that the province will run a deficit of almost $1 billion this year because of the world financial crisis. For the past two weeks, Premier Dalton McGuinty has signalled he is prepared to run a deficit because of declining government revenues. In the legislature, Opposition Leader Bob Runciman wanted to know how Ontario went from a balanced budget four weeks ago to what he said was an expected deficit of $1 billion. "Less than a month ago, (Finance Minister Dwight Duncan) said the budget would be balanced, even with a downturn in the U.S. economy," Runciman said. "Premier, how is it that just four short weeks ago the budget was balanced, but today there's going to be a deficit of almost $1 billion?" McGuinty told the house he didn't know where Runciman was getting his numbers. People would have to wait until the finance minister delivers the fall economic update later Wednesday to see what red ink exists, McGuinty said. "We're in a pretty good position now to withstand these powerful winds that are blowing out there," he said. But, McGuinty added, the government also has to find a way to "make advances on the poverty front, to act in a way that is fiscally responsible, to protect health care and to protect education." On Monday, McGuinty said he told Duncan not to run a deficit unless not doing so would mean cutting back on public services. He also vowed that Ontario would not close hospitals or cancel infrastructure programs after more than 200,000 people lost their jobs. On Tuesday, he warned schools, cities and hospitals that funding projections would have to be scaled back during challenging times that may last as long as two years. Government officials will say only that Duncan's statement will outline which new government programs will have to be delayed because of falling revenues. Anti-poverty activists are worried that will mean the government will fail to keep its promise to help the poorest of the poor improve their living standards.

Les municipalités, les universités, les conseils scolaires et les hôpitaux doivent s'attendre à recevoir moins de l'Ontario, prévient le premier ministre McGuinty. Pour en lire plus...

Ontario: the Province that thinks it's Canada Amid regional grievances, McGuinty fights for a fair share of taxpayers' dollars MURRAY CAMPBELL From Saturday's Globe and Mail August 2, 2008 at 12:00 AM EDT Dalton McGuinty was doing a favour for reporters afflicted with summer-brain stupor. “Here's the news,” the Ontario Premier said, helpfully, after a speech late last month. “Ontarians are coming together to more effectively assert themselves in the face of an unfairness caused by the financial arrangements between us and Ottawa.” Indeed, it would be news if this coming-together was actually happening, and it would be momentous given the suggestion by the federal government this week that it is prepared to shift some economic powers to the provinces. But the residents of Canada's most populous province do not have an unbroken history of rising up as one to take on the federal government. Ontario is not Alberta, and the philosophy that provincial rights should be paramount has always had to compete with a powerful sense that Canada comes first. Mr. McGuinty embodies this duality. For more than three years, he has wasted few opportunities to make his claim that Ontario is being treated unfairly in Confederation because it receives, by the latest estimate, about $20-billion less in services from federal government than its taxpayers remit to Ottawa. He criticizes the federal equalization program – financed predominantly by Ontario taxpayers – for redistributing money to provinces that are more prosperous than his. He takes issue with health and other transfer payments that are less generous than those given to other provinces. And he asks why an unemployed worker in Ontario is treated more severely than in the rest of the country and why the Harper government wants to leave the province under-represented in the Commons. Ontario Premier Dalton McGuinty gestures during his public lecture 'Ontario's Place in the 21st century' at the London School of Economics and Political Science in London, Monday, May 19, 2008. Hanging over all this is the feeling in Ontario that the 1988 U.S. free-trade pact broke the bargain of Confederation in which Canadians bought their manufactured goods from Ontario in return for a recycling of some of its wealth through programs such as equalization. The Premier is always careful to say that he is a proud Canadian and that he understands his province has been blessed by geography and circumstances that give it a responsibility to share its wealth. But the Premier's sustained effort – reflected in his website fairness.ca – suggests a growing sense of regionalism in Ontario. “My friends, it is time to stand up for our province, time to stand up for Ontario,” he said in his speech last month to the Chamber of Commerce in London, Ont. He suggested that lessons could be learned from other provinces that have gone mano-a-mano with federal administrations although he shied away from emulating Newfoundland Premier Danny Williams, who stormed out of one federal-provincial meeting in protest and then removed Canadian flags from provincial buildings. Ontarians who realize that Newfoundland has a much larger per-capita income than Ontario, thanks in part to $477-million in equalization payments this year may wish their Premier to be as aggressive. But while his tactics may be lower-key, Mr. McGuinty isn't going away. “It's becoming more and more urgent, and there's a continuing need to speak about it, because there hasn't been an appetite at the federal level to really engage in fixing the system,” said an official in the Premier's office. The question is whether Ontarians are likely to respond to his appeal or whether circumstances will transform Ontario into a province with a profound regional grievance. The trend line of estrangement from Ottawa suggests it is possible, but this has to be countered by the strong identification with Canada that Ontario residents have always shown. Mr. McGuinty recognizes other provinces will resent Ontario throwing its weight around. “There is a lazy caricature that is convenient for people, which people can resort to, which is that we're being greedy, we're being uncharitable, we're being un-Canadian,” he told the editorial board of The Globe and Mail in 2006. He also knows that talk of regionalism makes his voters uncomfortable. He is fond of comparing the province's role in Confederation to his own situation growing up as the eldest of 10 children. “My responsibility in the eyes of my parents could be summed up in one word: compliance,” he said in London. “Just be quiet and set a good example. Maybe there is a little bit of that to us here in Ontario.” Neither analysis deals completely with Ontario's complex, shifting history. The province had a very strong sense of identity right from the formation of Canada in 1867 but it also was proud that one of its own, John A. Macdonald, was its first prime minister. And Ontario was conscious that it owed its growing prosperity to the high-tariff walls erected as part of Macdonald's National Policy that sustained its manufacturing industries. But, as historian Randall White notes, long-serving premier Oliver Mowat (1872-1896) battled Macdonald for control of provincial resources (earning the nickname “the little tyrant”) and, later, both Howard Ferguson and Mitch Hepburn fought pitched battles with Ottawa over federal encroachment on provincial jurisdiction. Prevailing attitudes changed during the Second World War, which transformed Canada into a modern industrial state with Ontario at its centre. The postwar province was so diversified economically that it was touched by almost every federal policy. As Queen's University political economist Thomas Courchene has noted, “national policy had frequently had little choice but to be cast in a pro-Ontario light.” Leslie Frost believed that political relations had to reflect these economic ties. When he became Ontario's premier in 1949, he set about building a co-operative relationship with Ottawa. The province surrendered much of its taxing authority and agreed to the equalization scheme that vexes Mr. McGuinty. During Mr. Frost's 12 years in office, the old confrontations died away and the modern notion of Ontario as a helpful saviour of Confederation – exemplified by John Robarts' Confederation of Tomorrow conference in 1967 – took hold. So complete was this subsuming of Ontario's regional identity that historian Arthur Lower concluded in 1968 that the province had little collective will and asked in an article: “Does Ontario exist?” No one laughed and, indeed, historian Peter Oliver questioned seven years later why “anyone would attempt to write the history of a region which isn't.” Ontario was firmly by the federal government's side during the energy battles of the 1970s, supporting Ottawa's move, through the National Energy Program, to gain a larger share of Alberta's oil revenues. And Ontario forsook its old alliances with Quebec to side with the Trudeau government's push to patriate the Constitution and enact the Charter of Rights and Freedoms. The MPs that Ontarians send to Ottawa are still more likely to represent the federal argument to Ontario than vice versa – Mr. McGuinty has found few allies in any federal government caucus – but MPPs at Queen's Park began to fall out of step in the 1980s. The Peterson government was impatient with Brian Mulroney's agenda of fiscal restraint and free trade. In particular, Ontario saw the free-trade pact with the United States – the end of the old National Policy – as evidence that Ottawa was promoting the rest of Canada at its expense. By the early 1990s, Bob Rae concluded that the country seemed to be “based on the premise that everyone else could speak ill of Ontario and that this inherently wealthy place would continue to bankroll Canada.” In a 1993 speech, he described Ontario as “the part of Canada that dare not speak its name.” Mr. McGuinty owes much to Mr. Rae's decision to engage a consulting firm to draft a cost-benefit analysis to buttress his belief that the structure of Confederation in the wake of the free-trade deal and cuts in transfer payments neglected Ontario. Mr. Rae's “fair shares federalism” argument is the precursor of the current premier's “fairness” campaign. Mr. Harris agreed that the structure of Confederation served Ontario ill. He, too, fought the federal government (often along with other premiers) on everything from employment insurance to the Kyoto greenhouse-gas protocol. But the federal government at the time was preoccupied with Quebec, after the wake of the 1995 referendum that narrowly kept that province in the country. The federal Liberals' stranglehold on Ontario gave Mr. Harris's Progressive Conservative government no allies on Parliament Hill and Ontario's fundamental objections remained. Mr. McGuinty has earned some concessions in the past three years but the broad-ranging reform of fiscal relations he is seeking eludes him. His efforts seem to resonate with voters who find the notion of a $20-billion “gap” easy to comprehend. One opinion poll earlier this year gave him two-to-one support over federal Finance Minister Jim Flaherty in their war of words over Ontario's economic strategy. But will 13 million Ontarians find a will to act collectively and heed their Premier's call to arms? Mr. White concedes only that the province “is gradually recovering some sense of a regional identity it lost after the Second World War.” Mr. Courchene, too, is careful about predicting the future. “They're thinking of themselves as meriting better treatment from the federal government,” he said. “Does that make them a region? I don't know.” Certainly not in the way that Quebec is distinctive or the West feels it has been victimized by Bay Street and the NEP. It is also hard to define Ontario: The northwest feels closer to Manitoba and there is little identification with Toronto in the eastern part of the province. In addition, immigrants – and Ontario has been getting 125,000 or more a year – have only to look at their new passports to discern their allegiance. But circumstances may yet push Ontario into regional belligerence as the belief grows that the equalization program is unsustainable. Its taxpayers contribute 40 per cent of the cost of the scheme – $13.6-billion now, and growing by leaps and bounds – and this burden rises every year whether its economy grows or not. Conversely, while Alberta's oil revenues are part of the equation that determines payouts, the revenues themselves are off limits to the federal treasury. Mr. Courchene calculates that, partly as a result of this scheme, Ontario's per-capita revenues trail every other province. The prediction that Ontario will soon become a have-not province and qualify for payments that, absurdly, are largely funded by its own taxpayers casts a harsh light on the scheme's shortcomings. Mr. Courchene calls this prospect “fiscalamity,” and if Ontarians catch his drift Mr. McGuinty will have a blank cheque to throw some weight around. The eldest child may decide he's fed up with setting a good example and looking after the other kids.

Le fédéral est-il inéquitable envers l'Ontario? Presse Canadienne, 07:41 Il est temps que les Ontariens unissent leurs efforts pour que leur province obtienne un traitement équitable de la part d'Ottawa, a déclaré hier le premier ministre de l'Ontario, Dalton McGuinty. C'est un refrain familier de la part de M. McGuinty, comme cela a été le cas pour des générations de ses prédécesseurs, a reconnu le premier ministre. Mais le conflit revêt aujourd'hui un caractère plus urgent, et l'injustice dont sa province est victime est plus prononcée, selon lui, à cause de la croissance économique des autres provinces. Le gouvernement fédéral perçoit chaque année 20 milliards $ en Ontario, somme qu'il redistribue dans le reste du pays, ce qui n'a plus sa raison d'être puisque les autres provinces se débrouillent beaucoup mieux financièrement, a affirmé M. McGuinty dans un discours devant la Chambre de commerce de London. Malgré la prospérité du secteur de l'énergie ailleurs au pays, le gouvernement fédéral prélève davantage de l'Ontario pour le donner aux autres provinces que jamais auparavant dans l'histoire du Canada, a-t-il ajouté. Chaque année, "quoi qu'il arrive, le gouvernement fédéral extrait plus de trois pour cent du PIB ontarien de notre économie pour la redistribuer à travers le pays", a-t-il soutenu. M. McGuinty n'a cependant pas l'intention d'imiter son homologue de Terre-Neuve-et-Labrador, Danny Williams, que son propre conflit avec Ottawa avait amené à abaisser le drapeau canadien et à appeler cavalièrement le premier ministre canadien "Steve". La Chambre de commerce de l'Ontario appuie la revendication de M. McGuinty vis-à-vis d'Ottawa. C'en est rendu "au point où nous finançons d'autres parties du Canada", a commenté le président de l'organisme, Len Crispino. Le leader des conservateurs ontariens, John Tory, a déclaré que l'opposition coopérera aux efforts pour obtenir un traitement plus juste de la part d'Ottawa, mais il a estimé que les libéraux au pouvoir doivent faire plus pour stimuler l'économie ontarienne. Le gouvernement libéral doit faire ses devoirs pour attirer à nouveau les investisseurs en Ontario, et passer à l'action lui-même au lieu de se contenter de blâmer le gouvernement fédéral, a fait valoir M. Tory. http://www.lesaffaires.com/article/0/gouvernement/2008-07-23/480475/le-feteacutedeteacuteral-estil-ineteacutequitable-envers-lontario.fr.html

Le premier ministre Dalton McGuinty veut réévaluer son engagement d'imposer un seuil minimum de 10% d'éthanol dans l'essence d'ici 2010. Pour en lire plus...

Climat: Québec et Toronto se liguent contre Ottawa Le Québec et l'Ontario se liguent contre le gouvernement conservateur de Stephen Harper sur la question des changements climatiques. Les premiers ministres du Québec et de l'Ontario, Jean Charest et Dalton McGuinty. (Photo PC) Jocelyne Richer Presse Canadienne Québec Selon ce qu'a appris La Presse Canadienne samedi, les deux provinces signeront un protocole d'entente, lundi, afin d'accroître leur collaboration pour la mise en place d'un système interprovincial de plafond et d'échange de crédits d'émissions de gaz à effet de serre (GES). Le but avoué des deux gouvernements libéraux provinciaux sera d'unir leurs forces pour faire contrepoids à la politique fédérale en matière de changements climatiques, qui a pour effet «d'isoler le Canada sur la scène internationale», a indiqué une source gouvernementale au fait du dossier. L'annonce sera faite lundi par les premiers ministres Jean Charest, pour le Québec, et Dalton McGuinty, pour l'Ontario, en marge du conseil des ministres conjoint qui se tient à Québec dimanche et lundi, au Château Frontenac. C'est la première fois qu'une telle initiative - un conseil des ministres qui réunit deux provinces - a cours et elle vise à renforcer les liens entre Québec et Toronto, sur les plans économique, énergétique et environnemental. En matière de changements climatiques, les premiers ministres Charest et McGuinty jugent les engagements pris par le gouvernement fédéral nettement insuffisants et ont décidé de prendre le taureau par les cornes. Si les élus conservateurs à Ottawa «ne veulent pas nous organiser, on va s'organiser nous-mêmes», confie la source. MM. Charest et McGuinty espèrent que le protocole d'entente signé lundi servira de base pour convaincre les autres provinces d'emboîter le pas. Les deux provinces reprochent notamment à Ottawa d'avoir fixé, dans sa politique, des objectifs «d'intensité» de réduction des gaz à effet de serre, au lieu de seuils de réduction absolue de quantité. De plus, le Québec et l'Ontario jugent beaucoup trop éloigné l'échéance fixée par Ottawa pour obtenir des résultats, soit 2025. On reproche aussi à Ottawa d'avoir retenu 2006 comme année de référence pour mesurer les efforts accomplis, plutôt que 1990, comme le préconisait le protocole de Kyoto. Or, on estime au Québec avoir fait beaucoup entre ces deux dates pour réduire les GES, dans le secteur des alumineries, par exemple, explique-t-on à Québec. Les deux provinces veulent donc démontrer qu'elles s'alignent sur le protocole de Kyoto et les pays qui s'engagent dans cette voie, plutôt que sur le fédéral, pour ce qui est des changements climatiques. L'alliance Québec-Ontario «viendra en quelque sorte faire pression sur le fédéral pour qu'on passe à un système qui va être compatible avec ce qui se fait ailleurs», particulièrement en Europe, a précisé la source. http://www.cyberpresse.ca/article/20080531/CPACTUALITES/80531041/6108/CPENVIRONNEMENT

Charest et McGuinty négocieront la levée des obstacles commerciaux Il y a 9 heures QUEBEC - Les relations commerciales parfois tendues entre le Québec et l'Ontario seront à l'ordre du jour de la rencontre qu'auront lundi à Toronto les premiers ministres Jean Charest et Dalton McGuinty. Les deux hommes participeront à une première rencontre de travail, qui donnera le coup d'envoi de négociations devant conduire à la signature d'une entente favorisant le commerce entre les deux provinces. MM. Charest et McGuinty seront épaulés par leur ministre respectif du Développement économique, Raymond Bachand et Sandra Pupatello. Le point le plus litigieux est celui de la libre-circulation de la main-d'oeuvre entre le Québec et l'Ontario, un contentieux qui dure depuis plusieurs années. L'objectif des négociations sera de lever les obstacles au commerce, pour renforcer la relation économique entre les deux provinces.