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When the Ford Conservatives first won government in Ontario in 2018, the mood in the business community was buoyant. After almost 15 years of anti-business Liberal government under Dalton McGuinty and Kathleen Wynne, change was desperately needed. Detrimental Liberal policies, including extreme “green energy” laws that greatly increased energy costs, intrusive labour and employment standards that kowtowed to unions and imbalanced the labour market, ridiculously leftist policies in education which saw costs sharply increase while student achievement declined, higher taxes and more red tape for businesses and individuals, among other things, were a drag on the economy that drove many businesses out of the province. The slogan used by Ford’s government, “Open for Business” was viewed as an indicator than very welcome change was on the way.
Fast forward just over five years, and an even larger Ford government win in the 2022 election, and it has turned out that hopeful slogan was more spin than substance. Businesses are finding that most of the election promises of the Ontario Progressive Conservatives have not been implemented and that the business environment in the province has not significantly improved. In fact, many Ontario businesses continue to move or investigate moving out of the province and out of Canada as they find themselves increasingly uncompetitive and struggling to survive. Some companies retain a rump operation in Canada but expand their businesses and the good jobs they offer south of the border. Despite this, the Ontario government appears to be blissfully ignorant of this trend and believes all is well.
On the plus side, the Conservative government did get rid of Bill 148 early in their first term. Bill 148 contained some very extreme labour legislation that, along with significant increases in the minimum wage, increased vacation entitlements, expanded worker emergency leave to 10 days per year, gave part-time and temporary workers the same entitlements as full-time workers and contained other provisions that imbalanced the labour market and increased costs to employers.
Later in his tenure as Premier, however, Ford got on board with minimum wage increases, mandating annual hikes of around the rate of inflation. The problem with automatic minimum wage increases is they have no relationship with labour productivity, which is already in a dismal state in Canada. They also tend to ratchet up the entire wage structure, including for workers who earn much more than minimum wage. Such automatic increases also have no relationship to how a business is faring and can lead to businesses hiring fewer people, automating or struggling to remain in business. Ontario’s minimum wage is currently the second-highest in Canada, just slightly behind BC.
The Ford government also promised to shrink government and reduce red tape, yet government has ballooned under his tenure. He now has the largest Cabinet in Ontario history at 31 members, and spending has increased by almost 30 per cent as compared to the last year Kathleen Wynne was in office. The pandemic meant that all governments needed to be cut some slack on their spending record because of that extraordinary situation, but Ontario’s government has not made any effort to cut back now that the pandemic is past. It’s ironic that despite the spend-fest the Ford government has been on, it is still accused by unions and other leftists of cutbacks in such areas as health care and education, none of which is even remotely true.
The government also failed to honour its promises on tax cuts. It had committed to a reduction in the basic corporate income tax from 11.5 per cent to 10.5 per cent, but that has not taken place. They did however follow through with their promise to slightly reduce the small business rate from 3.5 to 3.2 per cent. As for the middle-class tax cut that was promised in the 2018 election, that has not taken place either, although they did reduce the provincial portion of the gas tax. The Ford government initially made a big deal out of opting out of the cap-and-trade system that was in place during the Wynne years, but unfortunately did not do their homework sufficiently to realize that the carbon tax “backstop” which would then be imposed by the federal government was in many ways worse than the original cap-and-trade system. Now that the federal government has effectively undermined its own case for the carbon tax by exempting heating oil, Ford and other Premiers have reinvigorated their campaign to get rid of the carbon tax entirely which would be a welcome development.
Energy costs are a big competitive problem for businesses, and Ford did say he would reduce energy bills significantly when campaigning. For households, the Ford government has continued the so-called rebate system, which knocks about $50 off the average monthly hydro bill. However, this is enabled by shifting the “savings” on to total government debt to the tune of $6 billion annually. It seems the saying “Your can pay me now or you can pay me later” is the relevant description of consumer electrical charges since any savings realized by ratepayers will merely need to be made up later by all taxpayers.
For small- and medium-sized enterprises (SMEs), there has been little if any relief under the Ford government from uncompetitive electricity costs arising from the Liberals’ Green Energy Act. The system of determining pricing for electricity for smaller firms has become so complicated it is difficult for a smaller business to navigate. Larger firms enjoy their usual discounts for higher consumption levels, subsidized by SMEs. As a result, electricity costs remain a major competitive disadvantage for many Ontario businesses and something has to give if the province wants to stem the flow of businesses leaving for more attractive locations in the US and elsewhere.
Other promises left unfulfilled include the elimination of the useless bureaucracy of the College of Trades, which Ford said he would get rid of but instead renamed as Skilled Trades Ontario. There was never any need for this additional agency and it should be eliminated. The seemingly perennial promise of beer and wine sales in corner stores was also made by Ford but never realized.
A number of election promises regarding the public education system have also not be fulfilled. The deterioration of our education system and its greatly increased costs are of great concern to business. Initially, Ford committed to the establishment of a Parents’ Bill of Rights which has never seen the light of day, and a purging of the “woke” curriculum that still prevails in public schools. Recently, the Ontario Conservatives have committee to increase students’ exposure to STEM (science, technology, engineering and math) topics and a reintroduction of cursive writing and financial literacy, but much more remains to be done.
The bottom line is that most SMEs do not recognize much improvement under the Ford government compared to previous Liberal administrations, and the economic competitiveness of the province continues to deteriorate. Businesses are leaving Ontario quietly but in significant numbers, taking good jobs and tax revenues with them. This should be of great concern to the provincial government and all Ontarians. With almost three years left in their current mandate, the Conservatives have some time to turn this around but the reversal must begin soon. Otherwise, the notion that Ontario is Open for Business will be just another broken promise.
She has published numerous articles in journals, magazines & other media on issues such as free trade, finance, entrepreneurship & women business owners. Ms. Swift is a past President of the Empire Club of Canada, a former Director of the CD Howe Institute, the Canadian Youth Business Foundation, SOS Children’s Villages, past President of the International Small Business Congress and current Director of the Fraser Institute. She was cited in 2003 & 2012 as one of the most powerful women in Canada by the Women’s Executive Network & is a recipient of the Queen’s Silver & Gold Jubilee medals.