As Stinson aptly notes, health care gained some traction in the last federal election, but only to the extent that current levels of transfer payments to the provinces would be maintained at 6% for the foreseeable future.  A new report this week from the Canadian Medical Association (CMA) is another wake up call for government leaders (whom are well aware of the health care sustainability challenge) to step forward in a bold fashion and convene a variety of stakeholders to determine how best to sustain a system we are accustomed to and make it more efficient.

For Ontario, this higher level of efficiency and value for public dollars invested becomes increasingly important as our population increases by 28% by 2030.  Our senior population is projected to represent one in five of all Ontarians by this time.  With 42 cents of every program dollar already going towards health care, what level of “distress” is the right time to roll up our sleeves and truly address this dilemma?

No doubt, health care reform is a highly sensitive topic and Canadians across the political spectrum are deeply passionate about it.  Nevertheless, there will come a point at which it is no longer simply easier to ignore the matter or delay the point of crisis with additional funding – at the expense of other public spending priorities.  Think transportation gridlock for instance?  Is it so difficult to put aside our ideologies and pause for a constructive conversation about the health care system?  A dialogue that is open to all ideas and one that is built on a spirit of cooperation?  Whether or not there is enough of a public appetite for health care reform to become a top campaign issue in the upcoming provincial election, November’s Ontario Economic Summit will tackle it head-on.  We look forward to facilitating a genuine debate and strategy session among a cross-section of economic leaders who will seek to uncover dynamic solutions to this very complex challenge.

Photo source: Flickr (nihilenz)

Canada can be proud of its talent pool, its rising number of university graduates and science post-graduates. In comparison to other OECD countries, Canada fares rather well in the areas of education, university-funded R&D, competition and peer review. Where we are not delivering is in transferring the knowledge from our talent pool to the marketplace.

The State of the Nation 2010 report, issued by Canada’s Science, Technology and Innovation Council states “research and development performed by business in Canada is low by international standards.” This is reason for serious concern.

It was with great interest that we, at the Ontario Chamber of Commerce (OCC), read Paul Davidson’s article “We need a culture of innovation: Build links between business and academe” (July 5, 2011). The article highlighted the findings of this report and rightly emphasized the need for Canada to foster a culture of innovation by building stronger links between the private sector and academic institutions.

In an age where innovation is essential to remaining globally competitive, Canada and its provinces cannot afford to lag behind.

For the last eight years, the Ontario Economic Summit (OES), an initiative of the OCC, has been bringing economic leaders from business, government, academia, labour and non-profit communities together, to address some of the most pressing concerns affecting Ontario’s economic prosperity.

In recent years, leaders participating at the OES have pointed to the need for a dialogue about how business-academia collaborations might be enhanced to help build a robust innovation climate. In response, the OES and the Council of Ontario Universities partnered to develop the “Connect to Innovate” (CTI) initiative in 2010.

These workshops, facilitated by local chambers of commerce and boards of trade, were held in Sudbury, London, Vaughan and Windsor. They featured senior administrators from each University with one of their research partners from the business community – exactly what Paul Davidson’s article said was needed for this country to remain globally competitive.

Clearly, one of the most significant challenges we face is an inadequate innovation culture, as noted in Paul Davidson’s article. OES “Connect to Innovate” set us moving in the right direction.

The discussions held were open and honest and demonstrated a sincere desire from all to foster closer relationships with a view to a more innovative economic climate. Most importantly, they provided insight which could lead to additional solutions as we move forward with Ontario – and Canada’s – innovation agenda. A full report of our findings can be found at www.occ-oes.com/connect-to-innovate <http://www.occ-oes.com/connect-to-innovate>.

We found that academic institutions and businesses across the province were shifting their mindsets and opening themselves up to new collaborations or building on existing ones in more innovative ways. They recognized the strategic importance of being innovative in the way we work together, to advance our standing on the international stage.

We thank Paul Davidson for showcasing the importance of innovation in our economy – and society. We are pleased to be part of the solution as we host additional workshops in other communities across Ontario throughout 2011 and 2012. This unique program will be extended to include Ontario’s Colleges and we will review our progress at the next Ontario Economic Summit, taking place November 21-23, 2011 in Toronto.

A study released last week by the Centre for Policy Alternatives and authored by CAW economist Jim Stanford argues that historical evidence illustrates that business tax cuts are both “economically ineffective and distributionally regressive.” One time OES speaker and renowned economist Jeffrey Sachs is similarly concerned about this global trend, calling on governments to resist the international “race to the bottom”.  Sachs says countries are being “gamed by global companies that are playing off our governments, one against the other.”  Sachs says the United States should champion a multilateral agreement to increase taxes on corporate income.  Laura D’Andrea Tyson, who chaired President Clinton’s Council of Economic Advisors disagrees, insists that higher corporate tax rates undermine growth and competitiveness and that the European Union cannot agree on harmonizing CIT rates for its member states, let alone with the U.S. and other nations.  Jack Mintz, an economist at the University of Calgary says that planned cuts to the federal CIT rate will generate 100,000 jobs and $30 billion in new investment.  As for Ontario, the provincial government started reducing its CIT rate from 14% at the beginning of last year to 12% in July of 2010 and is on course to reduce it further to 10% by July of 2013. 

So with all this difference of opinion on the merits (or lack thereof) of reducing corporate tax rates further, who’s got it right?  It’s important to remember that CIT isn’t the only way that revenue is generated.  For instance, consumption taxes are relied on more heavily as a source of revenue throughout Europe.  Moreover, effective tax rates are sometimes lower than the original CIT because of various loopholes that companies can leverage.  As the Globe and Mail’s Barrie McKenna points out in his insightful piece “Corporate taxes: to cut or not to cut?”, CIT is just one part of the tax package and one factor (albeit an important one) in the investment attraction mix.  Essentially, it’s how important this element is in fostering economic growth that is up for debate.  In short, where is Canada’s “sweet spot” on CIT rates?  Feel free to provide your own comments and opinions below!

Hosted by Hon. Sandra Pupatello, Ontario’s Minister of Economic Development and Trade and Clément Gignac, Québec’s Minister of Economic Development, Innovation and Exports, the initiative brought together 150 leaders from both provinces, representing the business, academia and not-for-profit sectors.

During the course of the day, participants tackled some tough issues, including:

1. The Ontario-Québec productivity gap
2. How to encourage businesses to better leverage new technologies
3. How to foster more effective cooperation to enhance innovation
4. Investing in talent through education and profound changes to corporate culture

You can now access streamed videos and photos from the event.

Ministers Pupatello and Gignac Take Questions from CBC's Amanda Lang at the Ontario-Québec Economic Forum on February 28, 2011

A Starting Point for Follow Up Action…

 Post-Forum, the time for action and engagement remains. The Ontario-Québec Trade and Cooperation Agreement Private Sector Advisory Committee (PSAC), co-chaired by Heather Munroe-Blum (Principal and Vice-Chancellor, McGill University) and Mark Lievonen (President, Sanofi Pasteur Limited) is leading the way. Their recent call for action to all Forum participants includes a request to identify specific barriers to interprovincial trade, investment or labour mobility and to put forward some suggestions to remove such barriers.

This information should assist both governments in finding ways to further streamline processes, remove barriers to trade and provide businesses in both provinces with the best chance to sustain themselves, grow, attract further investments and create a true climate of collaboration.

The Government will stay the course on Corporate Income Tax (CIT) and continue with its plan to reduce CIT to 10% by 2013. This will send a positive message to the business community that the Government will keep its promises to the private sector and maintain a level of certainty within the business environment.

Finance Minister Dwight Duncan also maintained the HST at its current level. The positive implications of this tax are already being felt by businesses and families across Ontario as noted in a recent University of Toronto research paper.

Finally, while there were investments in skills development through post-secondary education and literacy and basic skills, a more broad-based strategy is needed to address the skills shortage facing Ontario. If we are facing a crisis of People Without Jobs and Jobs Without People, the province needs a long-term plan for human capital development that includes workplace skills training and lifelong learning.

A long-term strategy on infrastructure and transportation, as well as an accelerated plan to eliminate the provincial deficit earlier than announced, would also have been welcome. These being such critical factors in boosting the prosperity of the province, we look forward to ongoing discussions on these issues.

Since the proposed merger between the TMX Group and the London Stock Exchange Group (LSE) was announced last month, pressure has been mounting on all fronts. An array of differing views is showcased daily, with the latest being the announcement that four of Canada’s six leading financial institutions are opposing the deal, claiming it “would result in the loss of a viable global entity and perhaps thousands of well-paying jobs.” The banks’ influence weighs heavily, given that they drive more than 60% of the trading taking place on the TSX.

According to a recent study by Compas Inc., the business community is by and large supportive of the merger, which it sees as a major opportunity for Canadian companies to gain access to more capital and remain major players in a global financial services hub. Supporters of the transaction, which include Gord Nixon, CEO, Royal Bank of Canada, have expressed their concern over the potential risks linked to missing out on an opportunity of this scale. Mr. Nixon stated that “if Toronto is going to grow as a global financial centre, the benefits of a global exchange co-headquartered in Toronto likely outweigh the implications of a local exchange that will become increasingly less relevant over time as trading and exchanges globalize.” We can expect his opinion to be endorsed by a majority of business leaders, especially if the proposed US$10.2 billion takeover of NYSE Euronext by Deutsche Boerse is finalized in the coming months.

Those opposing the deal have made arguments based on pressing concerns about the impact on sovereignty, employment, clout as a financial centre, and loss of regulatory control over our own financial system.  Both Ontario finance minister Dwight Duncan and former federal industry minister Jim Prentice are calling for a formal review of the regulatory implications. After all, it was Canada’s strong regulatory regime that was credited in being a significant advantage in weathering the global financial crisis.  Moreover, Canada has recently exercised caution in dealing with foreign takeover issues. Last November’s quashing of the PotashCorp takeover by BHP Billiton can be considered one of the more controversial decisions the government has had to face.  The TMX-LSE merger, while not focused on control of natural resources, takes this debate to a new level.  We’re talking about a fundamental piece of our free market economy.  As international markets become increasingly intertwined, we should expect this trend to continue.

It is not surprising that the TSX matter has now moved from the business arena to the political one. In order to resolve this issue and achieve the best outcome for all, and most importantly for our businesses, an open and fair dialogue involving key players of our economy is critical.

Recognizing the urgency for such a dialogue to take place, the Ontario Chamber of Commerce will feature Thomas Kloet, CEO of the TMX Group at a special meeting of the Ontario Business Advisory Council (OBAC) on Thursday March 24^th, 2011.  The meeting will provide leaders from our business community with a timely opportunity to share their concerns, obtain clear answers relating to the deal and offer input. For more information about this OBAC session, please visit: http://occ.on.ca/events/obac/.

Image source: Shutterstock_1354404

The Ontario Economic Summit team at the Ontario Chamber of Commerce is pleased to facilitate the very first Ontario-Québec Economic Forum being held in Toronto on Monday, February 28, 2011.

This by-invitation-only event is being co-hosted by the Ontario Ministry of Economic Development and Trade, and the Quebec Ministry of Economic Development, Innovation and Export Trade. It is an opportunity for the ministries to engage the business communities of both provinces collectively.

The one-day Forum has the overall goal of boosting productivity in the Ontario-Québec economic region by sharing best practices on:

• securing talent,
• fostering innovation, and
• adopting technology

to help our companies, and especially our SMEs, grow and become more competitive.

The Honourable Sandra Pupatello, Minister of Economic Development and Trade in Ontario and Clement Gignac, Minister of Economic Development, Innovation and Export Trade in Québec will be in attendance.

Media Inquiries

Media are welcome to attend the luncheon session, In Conversation with Minister Pupatello and Minister Gignac (1-1:30pm), and the media scrum directly following.

Both ministers will be available for questions in the Vienna Suite of the Sutton Place Hotel directly following this session. Please note that questions will not be taken from the floor during the In Conversation session.

All media must check in at the registration desk.

Highlights from the session included:

• Rosenberg sharing with the crowd Bob Farrell’s “10 Market Rules to Remember.” Farrell, the former Chief Stock Market  analyst for Merrill Lynch and Company was credited by Rosenberg as a great influence in his success and knowledge in the industry.
• Rosenberg joked that Canadians cannot seem to agree on two aspects; the Canadian dollar or hockey teams. Just as Canadians disagree avidly on the best Canadian hockey team, we cannot, as Rosenberg pointed out, seem to make up our minds as to when the Canadian dollar is at its most satisfactory level. Canadians either see the dollar as too high or too low, making it difficult to find common ground
• Canada, despite facing its own economic challenges, is in a better position than the United States. Investors are more interested in investing in our country as Rosenberg stated the Canadian dollar is expected to continue appreciating which is only beneficial as profits can be gained.

Rosenberg concluded that Canada is in a better economic position than the United States as global investors see Canada as a safe and stable place to invest.

Written by: Elizabeth Morris and Milica Petkovic

The Smarter Regulation panel discussion centered on “Smart” and “Dumb” regulations and the importance of determining what does and does not work. Also discussed was the necessity for the business community to get involved with all levels of government to ensure a better regulatory process. The Honourable John Wilkinson, Minister of the Environment, made the connection between innovation and regulation, and suggested that “we need to think about how to make regulation smarter, how to innovate.”

Ray Tanguay, Chairman of Toyota Motor Manufacturing Canada Inc., concluded the afternoon session by highlighting some of the key themes that had emerged out of the day and also recognized the significance of communication when he discussed the importance of building relationships between academia, government and business.

IBM Canada utilizes this age of graduates, taking on many interns and hiring new talent. Patrick Horgan, Vice-President of IBM Canada stated that, “The 21st century workforce is about changing the game.” Inevitably, in hiring educated and skilled individuals, this can create “smarter cities and a world-class economy.”

One major challenge of creating a world-class economy, recognized by Horgan, is obtaining critical skills. This involves reversing the trend in the low number of new graduates in core disciplines (science and engineering).  The struggle with family incomes and the incapability to send students to post-secondary institutes is recognized by Patrick (Sid) Ryan, President of the Ontario Federation of Labour. He noted that there should be a “heavy investment in post-secondary education by lowering tuition fees, which allows access to all students in all income levels.”

Institutions realize that it is important to uphold a strong brand image to attract new talent, however strong emphasis was put on the importance of maintaining relationships. Businesses must develop partnerships with post-secondary institutions in order to guarantee the top performers.

Written by: Katie Laviolette and Stephanie Porter