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Ontario Liberal leader Dalton McGuinty answers questions during a campaign event on Monday September 12, 2011 at Electrovaya in Mississauga, Ont. THE CANADIAN PRESS/Frank Gunn (Frank Gunn/THE CANADIAN PRESS)
Ontario Liberal leader Dalton McGuinty answers questions during a campaign event on Monday September 12, 2011 at Electrovaya in Mississauga, Ont. THE CANADIAN PRESS/Frank Gunn (Frank Gunn/THE CANADIAN PRESS)

Globe Editorial

The Ontario economy needs more than a stale tax credit debate Add to ...

The debate in the Ontario election around a tax credit for professionals new to Canada pits questionable and marginal Liberal policy against unbecoming and divisive Progressive Conservative politics. It’s an unfortunate distraction, especially considering the bigger challenges the province faces.

At $12-million a year, the Liberals’ proposal may be a rounding error in the province’s finances, but it’s poor policy nonetheless, creating little new economic capacity. Tim Hudak, on the other hand, until the weekend maligned the “foreigners” who would benefit and says, “Our kids need jobs,” as though the beneficiaries were not “our kids” too.

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The employment situation, for immigrants, for “our kids,” is about much more than this.

Ontario’s unemployment rate has fallen to 7.5 per cent – still above its pre-recession peak, and masking some real weaknesses. Given its strength in manufacturing but its lack of fossil fuel sources, Ontario is uniquely vulnerable to a high Canadian dollar, an American downturn and high oil prices. Add household and government debt, and the next government, of whatever political stripe, needs to respond with more than piecemeal proposals.

The Liberals’ economic focus is on education – with full-day kindergarten and a further expansion of postsecondary education – and renewable energy. To their credit, educational outcomes in Ontario have improved during Dalton McGuinty’s two terms as Premier. Now the Liberals need to show that their plan actually moves young people into good jobs, that they can continue expanding colleges and universities without sacrificing quality, and that their energy plans are worth the considerable price being paid by electricity ratepayers.

The Progressive Conservatives talk primarily about a competitive tax regime, criticizing (but accepting) most of the new taxes the Liberals imposed, while proposing cuts to personal and corporate income taxes. They now need to show that tax cuts are the main tool needed right now for renewed job growth.

Ontario’s economic climate is marked by uncertainty. For many of modest or average income, for underemployed youth, immigrants or laid-off manufacturing workers, it’s one of insecurity. Both parties ought to set the “foreigners” aside and spend more time explaining how the signature pieces of their economic plan stand as solutions to this insecurity and uncertainty.

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