TPT January 2008

From the AmericaS

The Conference Board of Canada projected economic growth in Ontario of about 2.3 per cent for 2007 and about 2.5 per cent in 2008. Its jobless-rate projection is 6.4 per cent and 6.3 per cent, respectively. Some Ontarians, at least, are taking alarm. Michael Gregory, senior economist with BMO Capital Markets, told the Star, “There’s a steamroller coming down the highway, and it’s going to roll over some businesses. It’s going to roll over some jobs.” Ian Howcroft, vice president of the Ontario division of Canadian Manufacturers & Exporters, sees the problem in terms of stemming the attrition. “There are still almost one million people directly employed in manufacturing [in the province],” he told Mr Babad. “These are well-paid jobs that pay higher than the national or provincial average, and we have to take actions that would hopefully protect those and grow those.” • Unfortunately, with the parliamentary election now a dead letter, those actions may not be taken. Among the remedies suggested are: tax relief through lower corporate rates; a better regulatory system, to cut red tape; and, given the long planning cycle for the purchase of capital equipment, extension of the accelerated depreciation program now in place. Marie-Christine Bernard, associate director of the Conference Board’s provincial forecast service, agreed that the Ontario economy would likely remain weak, at least for the time being. Ms Bernard told the Star, “We’ll have to wait until the Canadian dollar stabilizes and the US economy experiences stronger growth to maybe see the Ontario economy improve and have an economic performance closer to the national average.”

Manufacturing

Largely unnoticed, manufacturers in Ontario are struggling The Canadian province of Ontario, with a $500 billion economy heavily reliant on manufacturing, reported the loss of 44,000 jobs in that sector through September of last year. The surging value of a Canadian dollar, which eclipsed the US dollar for the first time in 31 years – together with the projected impact on Canada of slowing economic growth in the United States – further dims the outlook for Ontario manufacturing. Writing in the Toronto Star, business reporter Michael Babad drew a comparison between Ontario and its sister province Alberta, citing information supplied by the Conference Board of Canada. In Ontario, the jobless rate stands at 6.2 per cent and the outlook for growth in real after-tax household income is 2.5 per cent. In Alberta, the unemployment rate is 3.6 per cent and real after-tax household income is forecast to rise about 8 per cent for 2007. Mr Babad found it curious that – personal tax cuts and their impact aside – the economy does not attract more attention in Ontario. Manufacturers said they did not get the debate they had looked for during the abortive election campaign that would end on October 17 with the main opposition party abandoning its effort to topple Prime Minister Stephen Harper. “[The economy] wasn’t ignored,” Mr Babad observed. “It just didn’t have the drawing power of, say, faith-based schools.” (“Economy Simmers on back burner as election looms,” October 5).

Dorothy Fabian , Features Editor (USA)

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J anuary 2008

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