Good Jobs in a Competitive, Innovative and Low-Carbon Business Environment
Growing the economy and creating good jobs is the Ontario government's number-one priority.
The global economy has changed and Ontario is still in transition. To support an enhanced quality of life, strong public services and the growth of new opportunities for workers today and tomorrow, Ontario needs to build an innovative economy driven by the sustainable, export-focused knowledge industries of the future. With the province's economic plan and highly talented, skilled workforce, the province is well-positioned to succeed in the new global economy.
For the past two years, Ontario's continued recovery from the global economic downturn has been anchored in a balanced, four-part economic plan. The pillars of this plan for jobs and growth are historic investments to build modern infrastructure, investments in the talent and skills of Ontario's people, better retirement security for every worker, and building a dynamic, innovative and low-carbon business environment. The foundation of these four pillars continues to be the government's prudent, responsible financial management that will eliminate the provincial deficit next year, in 2017-18.
Ontario's economic fundamentals are again strong and gathering strength every day:
- Growth returning: The province posted higher real GDP growth in the first quarter of 2016 than the U.S. and all other G7 countries -- an annualized rate of three per cent. In comparison, U.S. and global growth rates were only 0.8 and two per cent, respectively.
- Unemployment down: At 6.7 per cent, Ontario has one of the lowest unemployment rates in the country. In comparison, the national average for unemployment is seven per cent.
- Recovery underway: Ontario has recovered all of the jobs lost during the recession and employment is now 4.9 per cent or 327,000 above the pre-recession peak.
- Good jobs: 98.6 per cent of the increase in employment since the recession is in full-time positions and 72 per cent is in above-average-wage industries. The majority of new jobs are in the private sector. Since June 2009, Ontario has gained 446,100 private sector jobs, 79,600 public sector jobs and 73,800 self-employed.
- Creating careers for the future: Ontario's employment in natural and applied sciences and related occupations has increased by 71,000 (14.3 per cent) between 2010 and 2015.
- Rising wages: Average weekly earnings in Ontario are above the national average. Ontario forecasts wage growth between 2016-2019 to average 4.5 per cent, which is well above inflation.
- Expanding trade: Ontario businesses signed 209 agreements over the past three Premier's international economic missions, generating close to $2.92 billion that will create up to 2,050 jobs.
- Growing exports: Ontario's merchandise exports advanced about 7.5 per cent in the first seven months of 2016, compared to the same period in 2015. This increase was led by exports to the United States, supported by growth in the U.S. economy and a competitive Canadian dollar.
- Attracting new investment: In the last three years, Ontario has twice been named the top destination for foreign capital investment in North America and is consistently ranked as Canada's leader in attracting foreign direct investment and venture capital. In August 2016, Ontario was named Canada's best place to invest by the international economic development publication Site Selection.
- Cutting pollution: As Ontario's economy grew, the province met its 2014 greenhouse gas pollution target to emit six per cent less than in 1990 -- one of the only places in North America to achieve a reduction in climate change causing pollution.
Ontario is an increasingly attractive place to do business. Ontario's combined federal-provincial general Corporate Income Tax rate of 26.5 per cent is lower than the comparable rate in any of the U.S. states. This has contributed towards Ontario cutting its marginal effective tax rate on new business investment in half since 2009.
The province's focus on increasing its global competitiveness and overseeing a shift towards new areas of economic growth in the knowledge economy in both the goods- and service-producing sectors is what led to its new Business Growth Initiative (BGI). The BGI commits $400 million over the next five years towards creating an innovation-driven economy, helping firms scale up into global leadership and modernizing regulations to lower the cost of doing business.
Business Growth Initiative
- Creating an innovation-driven economy --The province will help to accelerate Ontario's transition to the 21st century, innovation-driven economy that thrives on the initiative, creativity, education and skills of its people. The government will make significant investments in innovation and R&D, including the commercialization and adoption of new disruptive technologies.
- The need to scale up: catapulting more Ontario firms into global leadership -- The Mowat Centre has found that 20 per cent of the Canada-U.S. productivity gap can be explained by the Canadian economy's composition of many more small firms than large ones. Helping Ontario's small- and medium-sized firms get access to the capital, resources and expertise they need to grow will help turn more of Ontario's small- and medium-sized businesses into larger, globally competitive exporters.
- Modernizing the regulatory system and lowering the cost of doing business -- Ontario is establishing new tools to build a smarter regulatory environment that will remove unnecessary red tape and make government rules easier to follow.
Already, Ontario is off to a good start. As part of its annual Red Tape Awareness Week, the Canadian Federation of Independent Business awarded the province a B+ grade for taking action to make it easier to do business in Ontario -- the second highest grade in Canada. Since 2011, businesses and stakeholders saved $122.3 million and 5.4 million hours from modernized regulations and business services.
Expanding Internal and International Trade
Ensuring Ontario's growing firms have access to international markets is a key component of their success.
Ontario's Going Global Trade Strategy is helping small- and medium-sized businesses reach their potential through key trade missions, providing a range of advisory services and programs for new and existing exporters, conducting outreach to attract foreign customers and investors, and facilitating collaboration with strategic partners such as industry associations and the federal government.
In the last two years, Premier Kathleen Wynne has promoted Ontario as a great place to invest during missions to China, India, the United States, the Middle East and Mexico.
In the last year, the province helped prepare an estimated 1,575 new and experienced exporters for international markets and brought 700 companies on international trade missions to foreign markets. These companies anticipate $835 million in potential export sales opportunities, directly attributed to these missions.
Ontario businesses should also have the same access to markets across Canada that our international trade partners enjoy. But an outdated, protectionist Agreement on Internal Trade between Canada's provinces meant that even as Canada has signed a number of international free trade deals in recent decades, there was still no such thing as free trade withinCanada. This is why Ontario led a multilateral, national effort to renew Canada's economic union for the 21st century by removing the barriers to interprovincial trade and investment that had built up over the years.
At the Summer Meeting of Canada's Premiers in Whitehorse, an Agreement-in-Principle on a new Canadian Free Trade Agreement was reached. This ambitious and comprehensive new trade and economic growth agreement will help businesses grow and create jobs by removing trade barriers by improving the flow of workers, goods and services across provincial and territorial borders and reducing bureaucratic red tape. It will also help attract new job-creating investments to Ontario and all across Canada.
Choosing to Compete
In the global competition for business investments that create jobs, Ontario has chosen to compete. The province is attracting strategic investments and good jobs by partnering with growing businesses. This fall, the province will launch a new Strategic Investments Office with a Chief Investment Officer to ensure it is able to compete globally for the most attractive opportunities.
This one-window approach helped Ontario attract a new General Electric factory, which broke ground in Welland in 2016. The GE Brilliant Factory will be one of the company's most technologically advanced manufacturing sites in the world and employ over 220 highly skilled workers.
By creating the Strategic Investments Office to emulate the success of this approach, Ontario will also be building on a successful track record of partnerships under its Jobs and Prosperity Fund. Since 2014, the Fund has leveraged $8.1 billion in total investment and helped to create and retain over 37,200 jobs.
Two recent Jobs and Prosperity Fund partnerships are:
JLABS @ Toronto (May, 2016)
Under the Strategic Partnership Stream, a grant of $19.4 million will support JLABS @ Toronto, part of Johnson & Johnson Innovation, LLC, with the first expansion of their network of life science incubators outside of the U.S.
This 40,000 square foot facility at MaRs will provide up to 50 startups focused on biotechnology and pharmaceuticals, medical devices, and consumer and digital health with many of the advantages of being in a big company, without the capital investment. JLABS offers singular bench tops, modular wet lab units and office space on a short-term basis, allowing companies to pay only for the space they need, with an option to quickly expand when they have the resources to do so.
Baylis Medical Company (March, 2016)
A grant of $4.22 million will support a $32.5 million investment expansion of a new state-of-the-art research and development and cleanroom facility at the Mississauga manufacturing plant. Baylis develops and manufactures medical devices in the fields of cardiology, radiology and spinal procedures. The project will create and retain 278 highly skilled jobs.
The JPF complements Ontario's regional economic development funds -- the Southwestern Ontario Development Fund, the Eastern Ontario Development Fund, and the Northern Ontario Heritage Fund Corporation -- which leverage new jobs and investments in important sectors such as agri-food, automotive, forestry, advanced manufacturing and clean tech.
Regional Economic Development Highlights
Since January 2013, the Southwestern Ontario Development Fund has committed over $100 million to:
- Support 121 business growth initiatives
- Leverage business investment of over $1.04 billion
- Help create and retain nearly 25,000 jobs
Since January 2013, the Eastern Ontario Development Fund has committed over $35 million to:
- Support 48 projects
- Leverage business investment of over $341 million
- Help create and retain over 6,000 new jobs
Cleantech and the Low-carbon Economy
The province is investing in its future by harnessing the economic and quality of life benefits of leading the global transition to a low-carbon economy. Ontario is at the forefront of capturing the economic potential of the rapidly growing global clean technology industry (cleantech).
Ontario has the largest and fastest growing cleantech sector in Canada, a sector which is currently worth about $12 billion nationally and directly employs 50,000 people. If the cleantech sector grows comparable to Canada's overall share of global trade, it would be worth $50 billion in 2022.
And all signs point to cleantech continuing to be a global area of growth. In December 2015, in Paris, global leaders pledged to take serious action to reduce emissions of climate change causing greenhouse gases (GHGs), including efforts to limit the temperature increase to 1.5 °C above pre-industrial levels. Global action to fight climate change will further accelerate the growth of the cleantech industry in Ontario and worldwide. As an established leader in the fight against climate change, the Ontario government is now working to ensure workers and businesses can seize a sizeable share of this emergent international sector.
Ontario's greenhouse gas emission reduction targets are ambitious yet achievable. Based on greenhouse gas reporting data, Ontario has met its 2014 target of six per cent below 1990 levels.
The province achieved this goal by taking bold steps, including eliminating coal-fired electricity -- North America's single-largest and most effective climate-change initiative -- ever. The province is now targeting reductions from 1990 emissions levels of 15 per cent in 2020, 37 per cent in 2030 and 80 per cent in 2050.
To reach these targets and build a more innovative, efficient economy, Ontario is implementing a cap and trade program that it intends to link to Quebec and California's in North America's largest carbon market. Pricing carbon through a linked cap and trade program is the most economically efficient way to reduce emissions, reward innovative companies and generate opportunities for green investment and job creation.
In June 2016, Ontario released its Climate Change Action Plan. The action plan will guide the province's coordinated efforts to reduce emissions, including the reinvestment of cap and trade proceeds to provide people and businesses with tools and incentives to accelerate their use of clean technology that exists today.
Ontario's Climate Change Action Plan includes actions to:
- Create a cleaner transportation system and address greenhouse gas pollution from cars on the road today by providing rebates, incentives and charging stations to increase the number of cleaner or zero-emission cars and trucks on the road, including investments to make public transit more available
- Halt the ongoing rise in building-related emissions by giving Ontarians more choices, incentives and tools to make the right energy choice for their homes and businesses, by providing better information about energy use by buildings and homes, and making new buildings increasingly energy efficient over time
- Make Ontario one of the easiest and most affordable jurisdictions in North America for homeowners and businesses to install or retrofit clean-energy systems like solar, battery storage, advanced insulation and heat pumps, while helping to protect and support low-income households, vulnerable communities and many renters from the cost impacts of carbon pricing
- Support a carbon market that drives the lowest-cost greenhouse gas emission reductions. Cap and trade proceeds will help business and industries make investments that reduce greenhouse gas pollution and discover the next generation of low-carbon technologies. This will help save energy costs, improve productivity and global competitiveness, and protect and create jobs
- Work in partnership with First Nations and Métis communities to address climate change, with actions guided by traditional ecological knowledge, and help to build capacity in these communities to participate in the economic opportunities arising from climate change actions
- Build on progress, lead by example and act on opportunities to make government operations carbon neutral. Ontario will achieve this by reducing greenhouse gas pollution across government facilities, operations and procurement
- Ensure that natural, agricultural and forested lands are used in ways that are efficient, sustainable and enhance the removal and storage of carbon from the atmosphere while working with Ontario's waste sector to leverage different practices and technologies to capture greenhouse gas pollution that would otherwise be released into the air
The Climate Change Action Plan and cap and trade program form the backbone of Ontario's strategy to cut greenhouse gas pollution in a way that contributes to economic growth and creates good jobs.
The action plan will combat climate change, create good jobs in cleantech and construction, increase consumer choice and generate opportunities for investment in Ontario. Ontario will ensure cap and trade proceeds are invested in a transparent and accountable way back into projects that fight climate change and help Ontarians across the province, in rural areas and in big cities reduce their carbon footprint while lowering their household bills. The government will report on the plan's implementation annually and review the plan at least every five years.