: Ontario’s Path to Balance - Hon. Charles Sousa, Minister of Finance Speech to the Economic Club of Canada
April 22, 2013

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Thank you Norie [Campbell] for that kind introduction.

Thank you for that warm welcome, and thank you for being here today, on a beautiful spring day in Toronto.

It means a lot that you’ve chosen to be here for this conversation today.

I am honoured to be here as part of Ontario’s new government.

Today I will share with you some of the results of our extensive consultations with Ontarians, and give you a taste today, of the things to come.

First of all, the date of Ontario’s Budget will be Thursday, May 2nd, 10 days from today.

Now you’ll notice I didn’t say “my Budget.”

And I didn’t say “our government’s Budget.”

This is “Ontario’s Budget.”

Because this won’t be a Budget that reflects only our government’s priorities.

It’s not something we created with input from just a few key stakeholders or focus groups.

This will be Ontario’s Budget.

It’s a Budget we put together in consultation with people all across our province.

People who voted for us, and those who didn’t.  

It’s a Budget that speaks to the needs of all Ontarians wherever they are.

From Niagara Falls to Iroquois Falls.

From downtown Toronto to downtown Kenora. 

This is about the hopes and dreams we have for ourselves, for our families and for our future.  

To protect our healthcare and our education - the services that are most important to us.

It will be about building a prosperous and fair Ontario.

An Ontario that remains a great place to live and to raise a family.

Just as it has always been.

A place where people come from all over the world, to work with one another, for one another.

Not only to build a better life for ourselves, but a better quality of life for all of us.
I can tell you, that’s the reason my family came here.

My dad arrived at Pier 21 in Halifax in 1953 with just a few possessions.

He grabbed what he could on his way out the door as he fled what was, at that time, an oppressive regime in Portugal.

It didn’t take him long to find success in Ontario.

Through hard work he became a merchant in Kensington Market.   

But he did more than sell goods.

I was very fortunate he chose Canada.

And I’m very grateful that Ontario accepted him.

He made it his job to welcome new immigrants too — dozens and dozens of them.

So our house was part family home, part business, and part boarding house.

And a focal point for our community.

It was a busy, but very happy time for our family.  

There was so much hustle and bustle in our house back then, with people coming and going, eager to start new lives here.

And my dad had a great saying to help people understand what it means to live in Ontario.
He said;

“In Ontario, there is room for everyone.

Room for everyone to compete and do business. 

Room to learn. 

And, above all, room to help each other.”

And what my father said is still true, today.

I believe Ontario remains both competitive, and compassionate.

And our government believes that, too.  

I’ve been working with Premier Wynne closely for a few months now.

I’ve been amazed by her ability to bring people together, to hold a conversation rather than create a confrontation and to get results.

To me that’s the essence of what makes Ontario great.

It’s a kind of quiet confidence, a sense of determination, to do what it takes to succeed, without sacrificing the respect we have for one another.

And it’s a kind of wealth we have in this province that no balance sheet can account for.

But the Premier has already spoken very eloquently to those values.  

Today, I’m here to talk to you about the numbers.

And the fact is, we have sound economic fundamentals in place that are making Ontario’s economy stronger.

However, there are challenges that we must address if we want Ontario’s economy to remain strong.

I’m going to share four ways we can continue to build a prosperous and fair Ontario.

First: by continuing to create a competitive business climate.

Second: by continuing to invest in infrastructure.

Third: by continuing to invest in a highly skilled workforce. 

And fourth, and most importantly, by tackling and eliminating the deficit.

So let me begin by reminding you about how we created a more competitive business climate.

If you want an example of Ontario's determination in action, look at how we weathered the global recession.  

In fact, we didn’t just weather the storm, we didn’t just survive it, we changed the whole business climate right in the middle of the worst global economic downturn in 80 years.

We reformed our tax system to make us a more attractive place to invest and do business.
And today we are.  

We cut corporate income tax and implemented the HST, cutting taxes almost in half for new business investments.

We set out to be a more attractive place for international business…

And today we are.

Ontario now ranks third in North America for new foreign direct investment.  

We did all of this, not because it was easy, but because it was the right thing to do.

We did it to create the right environment for business to create jobs, take risks and drive innovation, so we could grow and succeed in the global economy.

It was the right thing to do then and it’s the right thing to do now.  

So we’re staying the course on our tax policy, and holding taxes at current low levels.

Because they’ve helped create a competitive business climate.   

The second thing we did to help create a stronger economy was to invest in infrastructure and our people.

During the dark days of the global recession, our investments in infrastructure protected and created over 100,000 jobs.

We provided billions of dollars in support to the auto sector, protecting hundreds of thousands more jobs.

And protected a key economic driver not only for Ontario’s economy, but for Canada’s economy.

We did what we had to do to keep our people working and our economy strong while protecting vital services like our schools and hospitals.

Ontarians have told us, investing in ourselves was the right thing to do then, so we agree it’s the right thing to do now.  

And one of the things Ontarians have been clear about, is that we need to build better transit infrastructure.

Better public transit, and we need to continue to build roads and bridges right across our province.

I’ve seen a lot of bumpers in the last few years - I’m one of those who commute into Toronto every day from Mississauga.

And you know what I see, when I’m stopped on the Gardiner?

Cranes.  Condos.  A waterfront housing boom.

Which is great, except traffic is already clogged.  

Imagine what this development means for future gridlock?
As this region’s population grows, how will we move around?

As a commuter, I want to get to and from work faster, and spend more time with my family.
But as Finance Minister, it’s my job to see the broader, public interest.  

We cannot allow congestion in the GTHA to continue or worsen.

It is choking our productivity and stifling our economy.

But let me be clear: any new revenue that is required to address this problem will be generated in a way that is fair, transparent, and directly tied to the transit project it is funding.

People in the north or other parts of this province will not pay for transit improvements in Toronto.

But they will benefit from it.

Ontario’s economy will benefit if the GTHA can move with ease.

So in Ontario’s Budget, we’ll have something to say about that as well.

That brings me to my third point: This is all about people.

When we talk about jobs numbers, about our economy, we are talking about how the people in this province are doing.

Our people are our number one asset.

That’s why we will keep investing in our highly skilled workforce.  

We do it from day one.

I’m proud of the investments we’ve made in our youth.  
From full-day kindergarten, through smaller class sizes in the early years, to improved graduation rates in high school, and 30% off tuition in university or college.

Our government has been making the necessary investments in our young people.

Because they don’t stay young very long.

As a parent, I know, kids grow up fast.

One day they’re building a pillow fort in the basement.

And the next thing you know they’re signing a mortgage.

So we want to invest in young people, today, so they have the skills they need, that the workforce and the economy needs, tomorrow.

So in Ontario’s Budget, we’re going to keep doing just that.   

Ontario’s strong fundamentals and strategic investments are creating jobs.

And since the recessionary low in June 2009, Ontario’s economy has created almost 400,000 net new jobs.

Most of those jobs are full time - That’s a positive sign.

But we’ve got to do even more.

And that brings me to my final point.

The most important and fundamental thing that we can do, together, to secure our future prosperity is eliminate the deficit.

Now before I talk about the path we’re taking to do that, I want us to take a realistic look at some of the challenges we face.

As a result of the global recession, the landscape of economies around the world has changed dramatically.

Places that were industrial powerhouses yesterday are struggling today.

And other places that were bare fields a decade ago are teeming with industry now.

In the meantime, advantages we had here in Ontario not that long ago, have changed, too.   

During the 1990s, for example, we enjoyed a low Canadian dollar, cheap oil, and access to strong markets in the United States.

Today, the dollar is close to parity, the price of oil is high and U.S. economic growth remains modest.

So we need to find new advantages.  

And we are.

As a result of everything I’ve talked about so far - our tax changes, investments in infrastructure and our skilled workforce -- we’ve got strong fundamentals in place.

Despite the ongoing challenges in the global economy, Ontario's strong economic fundamentals mean we can expect growth in the next few years.

Last year, we projected that Ontario’s economy would grow by 2.2 per cent in 2013.

We’ve had to adjust those projections because of slower global growth.

So now we’re projecting growth of 1.5 per cent.

Which means that, more than ever, Ontario needs to see fiscal discipline and prudence in its government.

So that’s what we’ll deliver.

This government is fully committed, to eliminating the deficit by 2017-18.

And we’re committed to lowering the net debt-to-GDP ratio to pre-recession levels once we balance the Budget.

Ontarians tell us they’re working hard to balance their books at home, so we will do nothing less as their government.

That’s why we’re not just meeting our targets, we’re beating them.

For the second year in a row, we are keeping program spending growth under 1 per cent.

In the years to come, controlling spending is going to take the same, disciplined effort.

As a government, that’s what we will do.  We’re always mindful of the long game.
We know we need to make choices today, to support Ontario’s economy so it can create jobs.

Without mortgaging tomorrow’s prosperity by losing sight of the burden that debt and interest pose for future generations.

That’s our approach.  A balanced, thoughtful approach.  

There are others who would take a different approach.

Some would have us slash and burn and impose cuts across the board.

Ontario already has the lowest spending per capita in Canada when it comes to providing public services.

But we won't balance with deeper cuts - that would hurt our sensitive economic recovery, hurt the important public services that families rely on, and ultimately cost us jobs.

Others would threaten Ontario’s future prosperity, by increasing the rate of spending to unsustainable levels.

We reject both of those extreme approaches - We’re sticking with what works.  

Our approach has helped us lower our deficit projection for last year.

Let me reinforce this:  We have exceeded targets dramatically.

Our deficit projection is now down to $9.8 billion - That’s a reduction of $5 billion from last year’s forecast.
These are significant results. We continue to outperform.

Some come from one-time savings - They also come from a lot of hard work.

16 out of 25 ministries are delivering quality public services while spending less than they were allocated last year.

This makes the fourth year in a row that Ontario has achieved a lower deficit than forecast.

We're the only government in Canada to achieve this level of success.  

We remain focused.

That’s why we’ll continue building prudence into our plan using reserves and contingencies.

To protect against global economic uncertainty and the potential for dramatic decreases in revenues.

Therefore, we are prudent in maintaining our fiscal target as was projected in last year’s budget.

Because it’s vitally important that we continue to exercise good, sound judgment.

Ontario is beating its fiscal targets, due in part, to the transformation of how we deliver public services.

Over the last year, the government started implementing the proposals made by the Drummond Commission.

This year, the government will be moving forward with of 60 per cent of the recommendations.

We will also move ahead on advice from the Jobs and Prosperity Council.

Today, businesses in Ontario enjoy a very competitive tax environment.

Before we made Ontario’s tax system more competitive for business, tax credits were offered to increase investment and create jobs.

The costs to taxpayers for these programs have increased at an average annual rate of 15 per cent over the last 10 years.

That simply is not sustainable in today's economy.

So we will look closely at ways to implement savings in business support programs and refundable tax credits.

Ontario also offers refundable tax credits for people. 
Last year’s Budget introduced income testing for the Ontario Drug Benefit for seniors.

Income testing other programs — like the Ontario Clean Energy Benefit — would also allow us to control spending, while ensuring the most vulnerable are getting
the most help.

When I present Ontario’s Budget on Thursday, May 2nd at 4 pm, I’ll speak to these themes in much greater detail.

We are in a sensitive recovery and some people still feel a little uncertain.

But I can say this, right now.

This budget is going to be just.

This budget is going to be fair.    

This budget is going to be right.

It’s going to be just because it speaks to the needs of Ontarians, wherever they may live.

Whether they voted for our government or not.
Because we listened to them.

It’s going to be fair.  It’s going to ensure that all of us, that all our families, get a fair shot at success.

And that all of us have an opportunity to work and get ahead.

And it’s going to be right.  It’s not going to be a budget that gives advantages to one over another.

It won’t be a budget driven by ideology or expediency, it’s going to be a budget that helps people.

It’s Ontario’s Budget.  A budget that reflects the values and the interests of all Ontarians.

Because, despite what some would have you believe, we are not a province of competing districts, or area codes.

We’re different from each other, yes, but we are never divided from one another.  
We’re Ontarians.  We work together.  

Because we know that what happens to my family in the 905 matters to your family in the 705 or in the 416 or in the 519… 613…or the 807.

We know that we are all in this together.

And that when you succeed, we all succeed.

Because in Ontario, what was true 60 years ago for my father is still true today.

“In Ontario, there is room for everyone.

Room for everyone to compete and do business. 

Room to learn. 

And, above all, room to help each other.”

Thank you.