Ontario is showing signs of economic strength and there are promising indications for its near term business prospects. A report from the Mowat Centre and the Ontario Chamber of Commerce released on January 26 found that:
• Ontario remains the North American leader in attracting foreign capital investment.
• Ontarians boast the highest levels of postsecondary educational attainment in the world.
• The Ontario government spends less per capita than any other provincial government.
• Ontario’s Alternative Financing and Procurement (AFP) model (sometimes described as public-private partnerships) is delivering value for taxpayer dollars while creating export opportunities for Ontario businesses.
• The Province has committed up to $1 billion in infrastructure funding for the Ring of Fire, the 100-year mining opportunity in Ontario’s far north.
• Provincial and federal governments are re-investing in infrastructure generally.
The report, titled “Emerging Stronger,” co-produced with the Ontario Chamber of Commerce, also identified a number of outstanding challenges:
• Ontario’s fiscal situation has only improved marginally.
• Ontarians continue to pay more into Employment Insurance (EI) than the benefits or training they receive.
• Federal transfers, and the equalization program, continue to treat Ontario unfairly.
• Electricity rates in Ontario “continue to rise and are negatively impacting our investment climate.”
• Employers continue to underinvest in the skills of their employees.
• The province is a laggard in terms of the number of patents it produces and in labour productivity.
• Ontario has some of the highest journeyperson-to-apprenticeship ratios in Canada, a contributing factor to Ontario’s skills gap.
In related news, the volume of foreign acquisitions by Canadian firms almost tripled in 2015 from the previous year, to a record $205 billion, according to a December 31 report from EnergyNow Media and Bloomberg. That was nearly twice the previous peak of $112 billion in 2007, the sources said. “The pension funds are clearly a dominant factor here,” said Bruce Rothney, Chief Executive Officer of Barclays Plc in Canada. Canada Pension Plan Investment Board made its largest solo acquisition to date, buying a leveraged loan business from GE Capital in June in a deal valued at $12 billion.