Lakehead University economist Livio Di Matteo has co-authored a new study for the Fraser Institute that Ontario’s poor economic performance is dragging down Canada’s economy.
The study, Can Canada Prosper without a Prosperous Ontario, examines Ontario’s decline from being a national economic engine to a “have not” province that received $3.2 billion in equalization payments in 2013/14.
“Because of Ontario’s immense size and population, and because the Canadian economy is highly integrated, what happens in Ontario significantly affects Canada’s national economy,” said Di Matteo in a news release.
Over the past decade, particularly since the 2008/2009 recession, Ontario’s economy has not performed on par with the rest of Canada, due in part to slow economic growth and spiralling public debt.
By 2012, Ontario’s per person GDP was 5.6 per cent lower than the rest of Canada and the province posted the country’s third lowest rate of private sector job creation at 14.1 per cent from 2000 to 2013.
Between 2003 and 2012, Ontario’s average annual growth of business investment in buildings, machinery and equipment was 3.0 per cent compared to 5.3 per cent for the rest of Canada.
“Ontario’s poor record on GDP growth, employment and business investment reflects a damaged provincial economy that’s dragging down the national economy,” Di Matteo said.
The study suggests Ontario could improve tax and regulatory competitiveness, boost its capital investment, reform energy and industrial policies, and make better use of Ontario’s vast natural resources in forestry and mining.
“If Ontario adopts smarter policies focused on competitiveness and economic growth rather than interventionist government, it could unleash its private sector and improve Ontario’s economy for the benefit of taxpayers in Ontario and across Canada,” Di Matteo said.
To read the study go online at www.fraserinstitute.org.