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Ontario hasn't seen a strong economic performance since 2002, yet discussion about how to get Canada's largest province back on track has been strangely muted for much of this federal election campaign.

"Certainly it hasn't been front-page news," Derek Burleton, associate vice-president and director of analysis for TD Economics, told ctvtoronto.ca.

This week Ontario's Premier Dalton McGuinty and Quebec's Premier Jean Charest accused the main federal leaders of not taking economic issues seriously, even though there was squabbling among the five on the topic during the two televised leaders' debates.

"Manufacturing is by any measure up against it," McGuinty told reporters. "We need more support for our manufacturing base and I'd like to see more support in concrete terms offered by all the parties."

The concern reaches down to Main Street.

After a recent CTV Toronto town hall election meeting in Oshawa, one audience member outlined his economic wish list.

"I've had enough. I've got children. I've got grandchildren. They need to know they've got a future in this community, with good-paying jobs," General Motors worker Dave Renaud said.

But there's bad news for Renaud's children and grandchildren. A report issued this past week by the TD Economics Group said the conditions that gave Ontario its past prosperity no longer exist.

"Ontario's past success has been due to a thriving industrial base, which in turn, was largely built on a foundation of a competitive and often undervalued Canadian dollar, relatively free access to the U.S. market and low-cost energy supplies," said the report, released Sept. 29.

"Yet a thesis of this report is that a cyclical rebound in the U.S. economy won't be enough to restore this foundation. Much of it appears gone forever. "

On Wednesday, McGuinty suggested many of the 235,000 good-paying manufacturing jobs that have disappeared since 2002 aren't coming back. Hugh Mackenzie, a research associate with the left-leaning Canadian Centre for Policy Alternatives, told ctvtoronto.ca that he called those the "upper working-class" jobs.

The parties

Two of the main parties have put forward their economic development strategies to attempt to address the decline.

On Sept. 10, NDP Leader Jack Layton used Oshawa to announce his $8.2-billion green-collar manufacturing jobs strategy:

• $4 billion to help the auto industry convert to environmentally-friendly cars and trucks
• $3 billion to retrain workers for environmental industry jobs
• $840 million for research and development credits
• $400 million for a job protection commissioner who would investigate plant layoffs and shutdowns to discourage jobs from leaving Canada

Layton said the spending would be funded by reversing cuts the Conservative government made to corporate income taxes.

The NDP said its plan would create 40,000 new jobs, but it hasn't said how many of those jobs Ontario could expect.

On Sept. 22, Liberal Leader Stephane Dion made the following promises within his party's platform:

• Create a $1-billion Advanced Manufacturing Prosperity Fund, which would particularly target green technologies and industries
• Spend $500 million more per year supporting university research

Dion had previously used a Toronto stop to say his party would spend $70 billion over 10 years to beef up Canada's infrastructure.

During the French leaders' debate on Wednesday, Dion promised a 30-day action plan on the economy should the Liberals form a government -- a promise Mackenzie called unformed.

The Conservatives still haven't set out a formal platform, although it will be unveiled Tuesday.

In the lead-up to the campaign, the Tories did announce some big funding deals for the auto industry:

• A repayable contribution of up to $80 million over five years to help Ford with a flexible engine assembly plant and research centre in Windsor, Ont.
• Forgiving General Motors $290 million in loans in exchange for promises to spend the money on building fuel-efficient transmissions in St. Catharines, to build a hybrid car in Oshawa and $40 million for environmentally friendly research and development there.

Not to be outdone, Deputy Liberal Leader Michael Ignatieff also promised $80 million to support the Ford engine plant in Windsor. He made the announcement in Whitby, home of Conservative Finance Minister Jim Flaherty.

How to help

Generally speaking, the Tories have focused on cutting taxes rather than directly supporting industries. Flaherty said in February: "These Band-Aids for individual companies ... it's picking winners and losers. Governments aren't good at that."

Conservative Leader Stephen Harper said in Oakville last month: "I think you have to be honest with people. The government can't go in and say 'we can guarantee your job.' We can't guarantee your job."

He gave his government credit for helping managing the transition.

Surprisingly, the Conservative website doesn't list an 'economy' section. It does have a tax section that lists its major tax cuts since taking power in February 2006.

Flaherty has pushed Ontario to cut its corporate taxes. In late February, he said, "If you're going to make a new business investment in Canada, and you're concerned about taxes, the last place you will go is the province of Ontario.''

Mackenzie said the Tories are "hanging on to the idea that if you change general economic conditions, that if you lower general tax rates, the markets will take care of you."

But the world doesn't work that way, he said, noting American states are competing to lure high-value manufacturing facilities like auto plants.

"If you're not in the auction, you're not going to get them," he said, adding there must be more "active engagement" in corporate location decision-making.

Burleton said tax competitiveness is definitely part of the solution. But Ontario has some clear advantages, like cheap health care and a high-quality workforce, he said.

Federal policy is also important to Ontario's prospects. The TD report suggests that McGuinty's claim that Ontario isn't getting a fair deal from the feds is a valid one.

Mackenzie said no one has talked about monetary policy in this campaign, even though the Bank of Canada's single-minded focus on keeping inflation down has helped drive up the value of the Canadian dollar and erased the cost advantage of Ontario manufacturers.

"We don't hear a lot about what anybody would do about it," he said, adding the Bank of Canada should also be required to consider stable exchange rates.

In the meantime, Burleton said to expect a slow economy in Ontario in 2009 -- and for the province to become an equalization recipient in the next few years if its economy doesn't improve.

Comments are now closed for this story

mike mc
let me see ......how about stop buying all this crap made in china ; and buy from companies that still make products in north america ;they are to be found !

Ken P.
Generally speaking shoppers will usually buy the lower cost item, it's a fact of life. And you can't really blame Canadians for doing so as they have been paying high taxes since WWII in order to finance our social agenda.

Giovanne Falcone.
Even the chinese don,t buy the made in china rubbish.It,s all sent by the boat load over here so our wal-mart shoppers can think themselves smart shoppers !