Article content

Ontario’s no-growth budget perpetuates the notion that only public demand for goods and services creates jobs

With the Ontario provincial election slated for June 12, the May 1 budget becomes the cornerstone of the Ontario Liberal platform and will be a promise made to the electorate. Should the Liberals win, the budget remains Ontario’s economic plan. A careful evaluation is quite appropriate since its adoption has significant economic consequences.

We apologize, but this video has failed to load.

tap here to see other videos from our team. Try refreshing your browser, or Jack M. Mintz: Ontario’s election budget fails to address its most critical problem — economic growth Back to video

Overall, this is a no-growth budget. With almost $1-billion in tax increases and a ramp up of net debt by $20-billion, the province is counting on $3-billion in program expenses and roughly $12-billion in infrastructure spending to pump up the economy in 2014-15. This budget is based on the notion that only public demand for goods and services creates jobs. Supply-side policies like taxation and regulation seem irrelevant.

Ontario has a serious competitiveness problem. As Ontario Finance shows in its own analysis, output per hours worked has fallen behind not only the United States and other G7 countries but also slightly lags the rest of Canada. In the last decade, Ontario’s output per working hour has fallen in information and culture, professional and scientific technology, construction, utilities and mining. Manufacturing has seen virtually no increase in output per hours worked.