Speech by Premier to the Canadian Club of Toronto
Protect fundamentals, balance Ontario budget

Dalton at Canadian Club
Premier to Canadian Club: moving forward means getting the fundamentals right in Ontario.

I want to start today by thanking all of you for the work you do, each in your own way, to help build a strong Ontario, supported by a strong economy. Of course, my subject, today, is the economy. More specifically, I want to talk about the next step in our plan to build a stronger Ontario economy, an economy that supports good jobs and quality public services.

I will begin by touching on the fundamentals, because they are the foundation for growth and prosperity. I am talking about our tax and regulatory environment: our power grid; our infrastructure; and our workforce.

Taxes and trade

First, our tax environment. To make sure Ontario is competitive, we eliminated capital taxes and reduced corporate taxes. Our corporate tax rates are now lower than every U.S state, and lower than the OECD average. The long and the short of it is that we’ve cut the tax rate on new business investment by almost half. We’ve also adopted the HST, letting Ontario businesses compete on a level playing field With competitors in more than 140 countries, who already enjoyed the advantage of a value added tax.

We’ve reduced personal income taxes for 93 percent of Ontarians. We are now paying less in personal tax today than we did four years ago. What’s more, we’ve eliminated 80,000 business regulatory requirements that stood in the way of jobs and growth.

We’ve aggressively expanded international trade, doubling our trade with India and China. And we continue to offer our strong support to the federal government, as it seeks to enter into new trade agreements beyond North America.

Electricity and infrastucture

The second fundamental we strengthened was our electricity system. We all understand that a reliable supply of electricity is the lifeblood of a growing economy. Our plan will rebuild 80 percent of the system over 20 years. Already, we’ve built more than 5,000 kilometres of new transmission and 8,000 megawatts of new electricity generation capacity. At the same time, our energy policies have given birth to an exciting, renewable energy sector in Ontario, creating 20,000 jobs so far.

Yes, there has been some controversy around our clean energy plan. But it’s especially important in matters of controversy that people know where you stand. Our government stands for clean energy, clean energy jobs and clean air. And we won’t waiver on that. We are going to keep moving forward with our clean energy plan, always looking for ways to improve it, just as we have kept moving forward on the third fundamental — and that’s infrastructure.

Our work together has meant new hospitals, schools, roads, bridges, sewers and public transit. On average, we are investing three times as much in infrastructure every year as the previous government did. Because we need it.

In Toronto alone, we have construction underway on a subway to York University; a rail link to Pearson airport; and a rapid transit line across Eglinton. And I think everybody here would agree that there is still more to do.

Strong workforce

This brings me to our fourth economic fundamental: a strong workforce. It's a hard fact: you can't compete in the race to the top without a highly skilled and educated workforce. So, we have made dramatic, new investments in the education and skills of Ontarians, ranging from full day kindergarten for our youngest learners, all the way up to more grad school spaces.

The results have been breathtaking:

Ontario families know: education is a great investment. And to make that investment more affordable, we recently announced a 30% tuition grant. That will help 300,000 college and university students from low and middle income families. It's been said that while we can't build the future for our kids, we can build our kids for the future. That's what education is all about.

And I think it’s noteworthy that, just last year, as we were coming out of recession, while Ontarians with a high school education experienced a 9,000 jobs net loss, Our college and university grads experienced a 119,000 jobs net gain.

Stronger economy

Our plan will keep making Ontario more competitive, by making Ontarians more competitive. So, my friends, when you consider the fundamentals: our tax and regulatory environment; our power grid; our infrastructure; and our workforce, we are stronger.

Yes, there's more to do. But, there is no doubt about it: we're stronger; we're more competitive; we're better poised for growth. And when it comes to growth, the Ontario indicators are all pointing in the right direction.

Our latest sounding has our Ontario economy growing at 2.7 percent. Unemployment has dropped from a high of 9.4 percent to 7.7 percent today. And our champions, like manufacturing and financial services, are experiencing steady growth. So, we're moving in the right direction, on pretty much all the major fronts.

Now, we need to take further action on another important fundamental: the deficit. It stands at $16 billion this year. And it’s not going away on its own. Tackling the deficit is an essential step in building the strong economy we all want and need: one that supports good jobs and quality public services.

But before I get to what we need to do, I want to speak to how we got here and why we need to get out. First, how did we get here? Before the global recession hit, Ontario had balanced three budgets in a row. We were in surplus. And, to this day, our government spends the least per capita among the ten provinces.

But, just as the recession took a bite out of household budgets across Ontario, it took its toll on the provincial budget, too. Government revenues went down; and the need for government support went up:

All this extra help for Ontarians, combined with weaker revenues, created a $16 billion deficit. That’s how we got here. So, why do we need to get out?

Just as it was right for our government to run a deficit to protect Ontarians from the worst of an economic storm, now that the storm is over, it’s right to rededicate ourselves to our plan to eliminate that deficit.

Borrowing money to help Ontarians through a terrible recession is one thing. But living beyond our means, constantly adding to the debt we are leaving to our children, is quite another thing. That would be wrong for our children, and for us.

I don’t have to tell you: when it comes to the economy, confidence is very important. If Ontarians see their government managing responsibly and keeping a steady hand on the tiller, just as they are doing at home and in business, they are going to feel more confident. And when international businesses see that we are taking action, it gives them the confidence to invest here. That investment brings jobs to Ontario, for Ontario families.

And if the lending community sees that we are tackling our deficit confidently and in earnest, It reassures them. And that keeps our borrowing costs down. Confidence in our economy is an indispensable, economic fundamental. Eliminating the deficit is key to maintaining the confidence of Ontarians, and the world, and growing our economy.

Drummond Commission and 2012-13 Budget

In the coming weeks, we will receive the advice of the Drummond Commission. Finance Minister Duncan will also continue hearing from Ontarians as part of his pre-budget consultations. And we will welcome any thoughtful advice we receive from the opposition. Eliminating the deficit won’t be easy, and getting the job done will call upon the very best we have to offer. I’m pretty sure that as our government moves forward with our plan, some will say we are moving too quickly, while others will say we are moving too slowly.

I think Wilfrid Laurier offered some pretty sound advice 120 years ago when he said: "…see the goal and towards that goal direct (your) efforts, discarding the impetuous frowns of the rash (and) the cautious advice of the timid."

I want to assure Ontarians: we won’t be rash, and we won’t be timid. Our progress will be steady, measured and relentless. While the specific details of our plan will be laid out in our budget, in the balance of my remarks, I want to share with you some of the broad strokes:

Health care

Health care, which accounts for over 40 percent of program spending, is overflowing with opportunities for reform. Shortly, Minister Matthews will lay out an exciting plan for health care transformation. Quite simply, our plan will provide Ontarians with better health care by getting better value for our health care dollars. And speaking of dollars, one half of all government spending, about $55 billion dollars, is invested in wages and salaries. That’s not at all unusual, in fact, that’s as it should be. Most taxpayer dollars should go into paying the people who deliver the services, like our nurses, our doctors, our teachers, our water and meat inspectors.

We need them, and we need them to do a good job. That means they need to be well-trained and fairly-compensated. And they are. But because half the province’s budget is spent on wages, it is simply not possible to reduce spending without addressing salary expenditures. We will do that by respecting the collective bargaining process. Respect isn’t something you check at the door in the face of a big challenge. In fact, it’s when things get difficult that you need it the most.

And just as we will respect the people who deliver our public services, so will we also respect the right of all Ontario families to a government that is fiscally responsible: one that maintains confidence in the economy they depend on for their jobs, their schools, their health care, their future. So we will negotiate firmly to a result that keeps us on a sure and steady path to a balanced budget, something that is in everyone’s interest.

Working together as Ontarians

Of course, our plan to achieve our goal of living within our means is a multi-year plan. It can’t be achieved overnight. There are no quick fixes. There are no easy solutions. Success will take time and an unwavering commitment. And I have every confidence we will achieve our goal, because Ontarians have everything it takes to get there, including our track record in getting the fundamentals right: our workforce, our taxes and our infrastructure.

But there is another fundamental strength we possess as Ontarians, one that underlies all our great successes: our willingness to work and build together.

That’s what Ontarians have achieved. It’s nothing short of amazing.

And our future is equally bright, so long as we keep working and building together. My friends, Ontarians have placed their confidence in our government, to keep a steady hand on the tiller, and steer us towards a stronger economy. And that is what we will do.

We will keep strengthening our economic fundamentals. We will eliminate our deficit, and we will maintain confidence in our economy. This is about a lot more than a dry exercise to satisfy accountants. It’s about satisfying the real expectations of Ontario families, that their economy will inspire their confidence, and the world’s confidence, too.

It’s about building the rock-solid foundation families need to support their jobs, their schools, their health care, their future. It’s about acting responsibly. It’s about building a bright future for our children and grandchildren. It’s about staying strong, and being who we are.

We are Ontario, the greatest province in the best country in the world.Thank you.

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Posted or revised: January, 2012