Speech: Ontario Finance Minsiter Dwight Duncan: Address to the Canada-United Kingdom Chamber of Commerce in London, England

OPENING

Thanks ________ for that gracious introduction.

Good afternoon.  It’s a pleasure to be speaking with you all here today.

I want to thank the Canada-U.K. Chamber of Commerce and the Ontario International Marketing Centre in London for organizing today’s event, as well as the Canadian High Commission for their partnership and hospitality of the Canada House for the luncheon.

I’d also like to thank the Ontario-based Research in Motion, maker of the famed Blackberry, for sponsoring today’s luncheon.

It was only earlier in this decade that so many of us in this room had yet to use a BlackBerry. 

It was a new tool back then, but now, virtually everyone in this room, as well as those running governments and businesses around the world, is taking advantage of this device.

An Ontario-grown idea, turned into a global necessity.

Those are the types of success stories that our government wants to continue to see produced in Ontario.

The United Kingdom, Canada and Ontario have an historic and important relationship built on trade and investment.

RIM, like many other Ontario-based companies, has its European headquarters right here in the U.K.

I’ve actually just come from a very productive trip to the Gulf Region, where it was fascinating to visit with Canadians and Ontarians whose businesses are currently making large impacts in places like Abu Dhabi, Dubai and Riyadh.

I also met with a number of regional bond investors in support of Ontario’s international borrowing program.

What is clear is that Canada and Ontario have an excellent track record in the Gulf region and are respected partners.

The same can be said about our relationship with the U.K.

The Canada-U.K. Chamber of Commerce was established some 88 years ago with the objective to help facilitate trade for Canadian companies based in, and exporting to the U.K.

Last year, more than $10 billion worth of goods were traded between Ontario and the U.K., including key natural resources such as gold, nickel, uranium, as well as precious metals, aerospace products, diamonds, computers and vegetables.

In 2008, the U.K. was the second-largest importer of Ontario goods and services behind the United States, accounting for nearly five per cent of all exports from the province.

ONTARIO INVESTMENT ATTRIBUTES

Increasingly, investors from around the world are looking to Ontario as a place to invest, and with good reason.

With our recently announced Budget initiatives, I believe now more than ever that our province represents a prime investment opportunity.

Ontario is Canada’s economic engine and the seventh-largest economic jurisdiction in North America.

The province’s GDP is greater than many countries – for instance, Belgium, Greece or Sweden.

Ontario has a very diverse economy, with services contributing 74 per cent of GDP.

We are home to the country’s leading information and communications technology and bio-industries. 

We have an exceptionally well-educated and skilled labour force.  We are an export-oriented economy, an advantage given our prime location to major U.S. cities.

Investing in Ontario provides extraordinary access to a North American Free Trade Area market of about 440 million people.

And that’s just the beginning.

FINANCIAL SERVICES SECTOR

Ontario is Canada’s business and financial services centre, with one of the soundest banking systems in the world, according to a recent report by the World Economic Forum.

In a February interview, U.S. President Barack Obama told the Canadian Broadcasting Corporation that “Canada has shown itself to be a pretty good manager of the financial system in ways that we haven’t always been here in the United States.”

President Obama went on to say that the performance of Canadian banks – alone among those in the G7 in not receiving a government bail out – was “striking”.

Toronto, Ontario is the business and financial capital of Canada.  It is the heartland of Canadian commerce with a financial services infrastructure that is economically stable, credible and strong.

In fact, Toronto is the third-largest financial centre in North America, behind only New York and Chicago, and the 12th most competitive financial centre in the world, based on direct employment.

The city is home to most of Canada’s investment and mutual fund dealers, the executive offices of Canada’s five largest banks, and an additional 39 foreign bank subsidiaries.

Toronto is also the headquarters for six of Canada’s top insurers.

As well, the city is the home-base for the TSX – the third-largest stock exchange in North America and eighth largest in the world based on market capitalization.

In January 2009, a federal panel on Canadian securities regulation endorsed the Ontario government’s long-standing support for a single national securities regulator.

A common securities regulator is a key building block in solidifying Canada’s otherwise strong international reputation for excellence in the regulation of our financial institutions.

And, given the significant role Ontario’s financial sector plays in Canada’s capital markets, we would expect to see the headquarters located in Toronto.

ECONOMIC OUTLOOK

Relative to other jurisdictions, Ontario has been in a better position to weather the global economic storm, however, Ontario has not been immune to the global economic downturn.

Real GDP declined in late 2008 and is expected to fall in the first two quarters of 2009. 

We expect growth to resume during the second half of 2009 and strengthen over the next few years.

Ontario has a history of resilient economic growth, and we expect that to resume after the recession ends.

Resumed U.S. economic growth, government efforts to provide jobs for today and for the future, low interest rates and actions taken to improve the functioning of global credit markets are expected to bring about the mid-2009 turnaround in Ontario.

RECENT GOVERNMENT INITIATIVES

Building a powerful Ontario economy is our top priority.

That’s why our government will continue to aggressively to increase the province’s competitive advantages. 

In March, our Budget made significant moves to enhance Ontario’s attractiveness for business investment and secures a strong economic future. 

We announced a $34 billion investment over the next two years to stimulate economic growth, representing 2.9 per cent of GDP. This in­cludes $32.5 billion for infrastructure.

Our recent Budget also announced further infrastructure support for the forest products and mining sectors.

We are working with Ontario’s Aboriginal communities and the mining sector to modernize the Mining Act, while ensuring the act continues to promote a balanced, sustainable and vibrant industry in the province.

To ensure Ontario’s economy becomes even more competitive, innovative and sustainable, we proposed green initiatives that will make it easier to bring renewable energy projects to life and, most importantly, create some 50,000 jobs in the first three years.

In February, we introduced our proposed Green Energy Act.

If passed, this legislation will stand as one of the most progressive renewable energy policies in the world.

It will also further enhance Ontario’s reputation as an attractive location for renewable energy investment.

We are also planning to invest in our successful creative sector, helping with cultural tax credits and support for digital media. 

Ontario’s creative and entertainment sector is the third largest in North America by employment after California and New York.

Our proposal to make our enhanced film and television tax credit rates permanent has already resulted in productions staying in Ontario.

TAX REFORM

As my federal counterpart, Finance Minister Flaherty, mentioned during his remarks to this Chamber earlier this month, the Ontario government has also proposed a fundamental reform of province’s tax system.

This comprehensive tax package is the single most effective step we can take to boost Ontario’s economy – one that will thrive in a globally.

Starting on July 1, 2010, we would combine the provincial and federal sales taxes and move to a single, value-added sales tax.

Research and experience from other jurisdictions show that business costs decrease while investments and productivity increase.

As part of this package, the federal government is providing Ontario with $4.3 billion over two years.

In addition, it has provided considerable flexibility in the implementation of the combined sales tax.

We are proposing to replace two taxes with a single tax.

Our renewed partnership with the federal government will foster job creation and economic growth, while providing significant support to the province through the transition period.

At the same time, the government is proposing $4.5 billion in business tax relief over three years, which includes reducing the corporate income tax rate to 10 per cent.

The comprehensive tax reform package proposed , once fully implemented, would cut Ontario’s marginal effective tax rate on new business investment in half – making Ontario one of the most competitive jurisdictions in the industrialized world for new investment.

To put this in perspective, Ontario’s marginal effective tax rate on new business investment would be half the rate in the United States.  Also – at 18.6 per cent in 2010 – it would be lower than the OECD average of 21.8 per cent.

By 2018, Ontario’s rate would fall even further to 16.8 per cent.

Ontarians, as well as businesses that invest in the province, expect the federal and provincial governments to work together, especially during difficult times.
As part of the deal, the federal government is providing Ontario with $4.3 billion over two years.

In addition, it has provided considerable flexibility in the implementation of the combined sales tax.

We’re proposing to replace two taxes with a single tax, and we are doing it with care.

Our renewed partnership with the federal government will foster job creation and economic growth, while providing significant support to the province through the transition period.

CONCLUSION

Our ability as a province to attract new investment is crucial to future growth.

Last year, we created the Ministry of International Trade and Investment, which works internationally to promote trade and investment in Ontario.

The ministry oversees the Ontario International Marketing Centre, which through an office right here in London, helps connect businesses in Ontario, and throughout the U.K. and the world, with the people, products and ideas that make Ontario Canada’s economic powerhouse.

The centre is a fantastic resource for U.K.-based companies looking to expand and/or do business in Ontario.

I want to once again thank the Canada-U.K. Chamber of Commerce and the Canadian High Commission for their help in organizing today’s festivities.

We are committed to making Ontario one of the most attractive and competitive jurisdictions for business investment.

As an overall investment proposition, we believe Ontario represents a value-added gateway to North American markets.

Our government continues to work across the economy to enhance Ontario’s investment strengths, and we are very enthusiastic about working with investors from the U.K. and across Europe to explore how we can be part of your North American growth plans.

Thank you.