Ontario Economic Outlook Delivered by Finance Minister

Thunder BayQUEEN’S PARK – Ontario Minister of Finance Dwight Duncan delivered the Economic Update in the Ontario Legislature on Thursday. The speech was interrupted repeatedly as opposition MPPs were heckling the Minister.

Speaker of the Legislature, The Hon. Steve Peters had to interject several times to settle down MPPs.

Here is the text of the speech from the Hansard of the Ontario Legislature:

Hon. Dwight Duncan: I rise today to present the 2010 Ontario economic outlook and fiscal review.

From 2003 to 2008, Ontario enjoyed job creation and economic growth.

As a result of that growth and this government’s investments, our children are enjoying the benefits of a stronger education system and smaller class sizes, while our parents are enjoying the benefits of the renewed attention paid to their health care.

Ontario’s economy was firing on all cylinders and we felt secure in our ability to take on the world.

In 2008, the world changed—it changed dramatically—and a global recession set in.

The world’s financial system came to the brink of collapse.

Global brands—among them the titans of industry—faltered. Factories the world over closed and jobs across the globe were lost.

We took action with our Open Ontario plan: a plan to strengthen the economy, to grow a new clean energy industry, to protect the gains we’ve made in schools and hospitals and to provide tax relief to families and businesses.

So today, with the changes this government has made, nine out of 10 taxpayers are paying less income tax than they did just a year ago.

With the changes we’ve made, over 180,000 new jobs have been created since the bottom of the recession in May 2009.

This government was elected to bring change to the province of Ontario, change from the previous government’s neglect of schools, of health care, of the electricity system and of the public services that our families rely on.

We’ve taken action, and now, today, we plan to do more.

Ontario’s economy—

Interjections.

The Speaker (Hon. Steve Peters): I would just say to the respected members of the opposition that their leaders will have the opportunity to respond to the minister, and I think we’d all like to hear the minister.

Minister?

Hon. Dwight Duncan: Mr. Speaker, Ontario’s economy is emerging from the global recession.

Key economic indicators have improved since the recession, though many remain below pre-recession levels.

After declining for four consecutive quarters, our real gross domestic product has increased for the last four quarters in a row.

That’s good news for Ontario families.

Based on the best available advice, we project that Ontario’s GDP growth will be 3.2% in 2010, up from what we forecast in our most recent budget.

The economy is growing.

Real GDP has recovered 71% of its recessionary loss, and that is helping job creation.

While the United States has recovered just 10% of the jobs it lost due to the recession, Ontario has recovered 75% of the jobs lost in the last downturn.

It is a good sign, though our work is never done when it comes to strengthening the economy and creating jobs.

Economic growth will moderate in the coming years due, in large measure, to slow growth in the US economy.

For 2011, we expect real GDP to grow by 2.2%, and in 2012, by 2.5%. Our planning assumptions are lower than the average private sector forecast.

Though Ontario is emerging from the recession, families want to know that they can feel secure about their economic future.

Across the country, around the world and in the communities in which we live, people are still feeling the impact of the recession. Our government plans to help more.

For decades, governments of every political stripe have failed to make crucial investments in electricity supply and transmission.

By 2003, under the previous government, people did not know if the lights would stay on.

Back then, under the previous government, 25% of Ontario’s electricity supply came from dirty coal—

Interjections.

The Speaker (Hon. Steve Peters): The members will please come to order. If there are members in here who are not wanting to listen, I would suggest that they leave the chamber and not disrupt.

Minister?

Hon. Dwight Duncan: The previous government had no plan for conservation and no plan for supply to keep up with demand.

The previous government let the wires that bring power to homes fall into critical disrepair.

At that time, while demand was going up in Ontario, the electricity system lost 1,800 megawatts of power capacity. That’s the equivalent of Niagara Falls running dry.

Moreover, in 2003, under the previous government, Ontario had to import U.S. coal-fired electricity just to keep the lights on.

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The previous government even had to set up emergency generators because of the fear of brownouts.

To top it all off, the previous government’s market-driven deregulation scheme saw electricity prices spike an average of 30% over seven months in 2002. That hurt Ontario families, and that set us back in a way that we’re just now beginning to come to terms with.

Clean, reliable electricity should be a big part of our everyday lives. There’s no compromise on clean air and reliable power.

In 2003, Ontario needed action and this government took action.

With the changes we’ve made, there’s enough new, cleaner generation to power some two million homes, about a fifth of that coming from renewables like clean energy wind and clean energy solar.

With the changes we’ve made, there are 5,000 kilometres of improved transmission lines.

With the changes we’ve made, conservation programs are in place and are saving families money.

We are closing Ontario’s dirty coal plants, the equivalent of taking seven million cars off the road.

All of this is making Ontario a leader in clean energy. It also means new investments in Ontario jobs, including the Sarnia Solar Project, the largest operating in the world, where there were 800 construction jobs.

In addition, in partnership with the Moose Cree First Nation, the Lower Mattagami project, the largest northern hydro project in 40 years, will employ 600 people, many of them aboriginals, in its construction phase.

And the list goes on.

Clean energy manufacturing plants are opening in communities like Guelph and Windsor to serve the Ontario market and to export made-in-Ontario solar panels and wind turbines.

The previous government gave us dirty coal. This government is eliminating coal entirely and cleaning our air.

The previous government left us with 10 wind turbines. This government has built 700.

These investments cost money.

We had to invest. They were necessary and unavoidable costs.

We are all paying for decades of neglect by governments of all political stripes.

Residential and business consumers around the world are feeling the impact of electricity prices.

And if people tell you they can deliver clean, reliable electricity at a lower price, don’t believe them.

People want clean air and they want reliable electricity and they are also looking for help paying some of the additional costs until prices stabilize.

That’s why today we are introducing the Ontario clean energy benefit.

The Ontario clean energy benefit would give Ontario families, farms and small businesses a 10% rebate on their bills each and every month for five years.

This will help families, it will help hard-working small business owners, and it will make a very big difference for Ontario farms.

The McGuinty government is helping those who are feeling the pinch from the rising cost of living and, especially—

Interjections.

The Speaker (Hon. Steve Peters): The member from Hamilton East, I’m warning you.

Mr. Paul Miller: Speaker, they’re taking credit for something they didn’t do.

The Speaker (Hon. Steve Peters): It’s a warning. You’ll be named.

Hon. John Gerretsen: We should have a penalty box.

The Speaker (Hon. Steve Peters): No, and don’t be encouraging him.

Please continue.

Hon. Dwight Duncan: The McGuinty government is helping those who are feeling the pinch from the rising cost of living and, especially, hydro prices.

Everything we have done over the last few years is helping.

C’est pourquoi nous proposons aujourd’hui la prestation ontarienne pour l’énergie propre.

Cette prestation offrirait aux familles, aux fermes et aux petites entreprises de la province une prestation équivalant à 10 % de leurs factures d’électricité pendant cinq ans.

Ce serait donc une remise de 10 % de votre facture d’électricité tous les mois à compter du 1er janvier 2011.

Tout ce que nous faisons aide.

Since May 2009, the Ontario economy has created over 180,000 jobs.

Many who lost their jobs during the recession have been rehired.

Being without a job for any period of time is very difficult for individuals and their families.

That’s why this government trains more than one million people annually through skills development and assistance at Employment Ontario.

Our Second Career program has helped over 36,000 laid-off workers get training. Over 60% of Second Career participants get new jobs within three months of graduation.

Just as we needed to retrain workers and just as we had to rebuild our electricity system, we needed to modernize a tax system that penalized businesses for investing in job creation.

Ontario’s tax plan for jobs and growth is cutting taxes for people, cutting taxes for businesses and bringing our tax system into the 21st century.

With the changes we’ve made, the people of Ontario will see almost 600,000 new jobs over the next 10 years.

The Open Ontario plan moved forward with a group of tax breaks specifically designed to help families—breaks on energy costs, on property taxes and on their children’s activities.

With the changes we’ve made, nine out of 10 Ontario taxpayers pay less income tax today than they did a year ago.

Everywhere I go, people talk to me about their retirement savings.

All of us should take comfort in knowing that we’re taking meaningful steps to better protect retirement income.

The McGuinty government has introduced two bills on pension reform—the most significant reform to pension law in a generation.

Let me re-emphasize: The McGuinty government will also continue the fight for affordable enhancements to the Canada pension plan for Ontarians and indeed for all Canadians.

We made the decision at the beginning of the global recession to protect jobs and sustain schools and hospitals as well as other vital public services.

Our government is reducing the size of the deficit each and every year.

As economies return to growth, governments must return to balance, and our government is doing that.

We have a responsible plan to eliminate the deficit.

I’m pleased to announce that the projected deficit for 2010-11 has been slashed by almost 25% compared to the forecast just a year ago.

At this time, we are projecting the deficit for 2010-11 to be reduced to $18.7 billion.

The reason for this decline is twofold: stronger economic growth and responsible management.

We will continue to be prudent and efficient managers and invest tax dollars wisely.

We’ve taken action on our biggest spending line: compensation.

About half of the negotiated settlements since the 2010 budget have resulted in two years of no compensation increases.

To those unions and employers who have responded to our request for help, we say thank you. Working together, we’ll build a better Ontario.

I will be providing periodic updates on the choices we are making to manage responsibly and to focus on the priorities of Ontario families.

We take this responsibility very seriously.

The previous government held a fire sale for Ontario assets, like the Highway 407 deal. We’ve changed that, and we’re taking a thoughtful and responsible approach. We are in the process of renewing our long-standing partnership in electronic land registration.

We are proposing to extend Teranet’s licences to provide electronic land registration and writs services while retaining control over fees. The proposed agreement would provide a $1-billion payment, to be used to reduce our province’s debt. This would save up to $50 million in annual interest costs. It would also provide annual royalty payments of an additional $50 million starting in 2017.

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When added to the $1-billion reduction in the deficit, this means we are borrowing $2 billion less this year than was forecasted.

Last year, the people of Ontario invested in the auto sector to help protect 400,000 jobs right here. General Motors repaid their loans ahead of schedule. We are also pleased to see the turnaround at Chrysler. The government is exiting from these companies in a responsible way within a reasonable time frame.

General Motors issued its stock to the public on the Toronto Stock Exchange and the New York Stock Exchange today. As part of the initial public offering, Ontario and the federal government have offered to sell 20% of their interest in the company.

Overall, this is a good sign that the auto sector is recovering and that the Ontario economy is back on track.

Our task is to encourage a competitive economy that creates jobs, to manage down the deficit and debt, and to help Ontarians fulfill their hopes and aspirations.

We cannot—we will not—turn back the clock to an outdated tax system that discourages investment and costs us jobs.

We will move forward with our plan to make Ontario a better place to invest so that jobs are created for our families.

We cannot and we will not turn back the clock to coal-burning pollution.

With the changes we’ve made, we’ll be leaders in clean air and clean energy.

We will not turn back to crumbling schools and closing hospitals.

Instead, we will be moving forward with full-day kindergarten and educating our students so that they have the skills they need to get the very best jobs.

We will continue to move this great province forward.

We’ve heard what people have said about rising electricity costs.

We will deliver clean air, clean energy and a 10% clean energy benefit on your bill each and every month for the next five years.

We will continue to make investments that help grow the economy and create jobs. We will keep moving Ontario forward.

The people of this great province deserve nothing less.