Over the past three years, Ontario has been a leader in economic growth in Canada and the G7 countries. While private-sector economists expect Ontario to remain one of the fastest growing provinces over the next two years, there are challenges, and opportunities, facing the economy.
The population of Ontario, like many parts of the world, is aging, and it is growing at a slower pace than it has in the past. The impact this will have on the working-age population places increasing importance on enhancing the skills and productivity of workers in the province. Businesses also face challenges from global competition and technological advancement; however, these changes will open the doors for new markets and jobs. The government is preparing for tomorrow through the investments it is making today.
The Province is creating opportunities for people to find jobs and for business to grow and prosper in the new economy by developing a highly skilled workforce, investing in infrastructure, supporting business innovation and growth, and expanding exports. The government will ensure these opportunities are available in all regions of the province, fostering an environment of inclusive growth where everyone will benefit from, and contribute to, Ontario’s prosperity.
Investing in People Today
Every Ontarian deserves the opportunity to achieve their full potential and develop the skills they need to succeed in the modern, knowledge-based economy.
Ontario’s people have always been its strength, and building their talent and skills is at the heart of Ontario’s economic plan. The Province is making significant investments in education, from full-day kindergarten to postsecondary education, adult education and skills training. These investments will help people prosper and help Ontario maintain the competitive advantage of a highly skilled workforce. In 2016, 68 per cent of adults in Ontario had a postsecondary credential, up from 56 per cent in 2002 — higher than rates for any country in the Organisation for Economic Co-operation and Development.
By further strengthening education and training, the government is ensuring all Ontarians are equipped with the skills and competencies they need to find meaningful work, adapt to changing technologies, build skills to grow in their careers and contribute to their communities.
What We’ve Been Doing since 2013
- Supporting nearly 200,000 youth with employment and skills development opportunities
- Transforming the Ontario Student Assistance Program (OSAP) to make average tuition free for more than 210,000 students
- Preparing over 42,000 people per year for jobs or further education and training through literacy and basic skills training opportunities
- Helping more than 6,000 internationally trained professionals each year start their careers in Ontario
Investing in People’s Talents and Skills
Globalization and new technology are changing the nature of work in Ontario. Changes include increased demand for highly skilled workers; declining shares of middle-skill and middle-paying jobs; growth in alternative forms of employment, such as contract and part-time work; and a shift from goods-producing to service industries.
As Ontario’s economy becomes more technology-driven and knowledge-based, the province’s competitiveness and prosperity depend increasingly on a highly skilled workforce. The government is focusing on getting people the skills they need, targeting support for those entering the labour market and those who face barriers to success or need support in meeting the demands of a changing economy.
Through Ontario’s Highly Skilled Workforce (HSW) Strategy, people of all abilities and backgrounds can develop their talents, knowledge and skills to benefit from, and contribute to, an evolving economy. The strategy will provide people with opportunities across the continuum of learning — from Grades K–12, to apprenticeship and postsecondary education — as well as skills development and lifelong learning for both unemployed workers and those active in the labour market, but looking to acquire new skills. High-quality education and training directly contribute to a better quality of life for Ontarians.
To guide the implementation of this strategy, including advice on how to support those impacted by new technology in the workplace, the government will be bringing together employers, educators, labour and other stakeholders as part of a Planning and Partnership Table. The Province will also be investing in providing labour market information through a new website to help individuals and employers make decisions, such as choosing a career, developing educational and training programs, or undertaking workforce planning.
Ontario’s Career Kick-Start Strategy
Hands-on learning opportunities help students cultivate meaningful work-related skills and experiences that, alongside advice and guidance from mentors, can significantly impact career exploration and entry into the workforce. These opportunities can be key to choosing the right postsecondary program or building the skills, networks and experience needed to successfully transition into the workforce.
This type of learning can take many forms — such as co-op programs and internships, class projects working directly with employers or researchers, or participation in entrepreneurship programs.
Practical experience is useful for guiding decision-making and helps close the job experience gap that many students and recent graduates face. They are often confronted with the challenge of needing work experience to get a job. Evidence shows that students who have on-the-job experience or hands-on learning opportunities during their studies can have improved prospects for employment, reduced unemployment after graduation and increased earnings.2 In a survey sponsored by the Business/Higher Education Roundtable in 2016, students and recent graduates showed significant support for work-integrated learning:
- 89 per cent supported more work-related experience in their programs; and
- 88 per cent thought that students who graduate with degrees that offer work-related experience have an advantage when it comes to finding a job.
Practical experience and on-the-job opportunities not only benefit students by helping them enter the workforce, they benefit employers by addressing their need for talent and experience.
Recognizing the demand of both students and employers to close the experience gap, Ontario is launching its new Career Kick-Start Strategy. As part of this initiative, Ontario is investing nearly $190 million over three years in initiatives aiming to create 40,000 new opportunities for K–12 and postsecondary students, as well as recent graduates. These investments will help fill that gap for many of Ontario’s young people, opening doors to real-world experiences at critical points on their journey from education into the working world, while giving employers the opportunity to help train and equip an emerging workforce.
The Province will continue to offer Experience Ontario, a two-year career exploration pilot program to support recent high school graduates in determining their postsecondary pathway with greater certainty and confidence, and to facilitate better outcomes for them.
Career Kick-Start also builds upon some of Ontario’s continued investments in hands-on,
work-integrated opportunities within the apprenticeship system, such as the Ontario Youth Apprenticeship Program (OYAP) and Pre-Apprenticeship Programs, which support youth in high school and those who are out of work and not in school. Apprenticeships are an important pathway for youth to access good jobs and careers, and a key element in building a highly skilled workforce.
The government will be working with key partners to identify opportunities to modernize the apprenticeship system, focusing on simplifying the experience for apprentices, enhancing access and awareness of apprenticeship as a career pathway, and increasing completions.
Ontario Lifelong Learning and Skills Plan
Ontario is responding to the changing economy by making sure Ontarians have the support they need to adapt and thrive at every stage of their career.
The government is introducing the Ontario Lifelong Learning and Skills Plan, which is about opening doors and creating opportunities for adult learners and workers.
The critical building blocks to economic success are literacy, numeracy and aptitude with digital tools like computers, the Internet and new workplace technologies. More than 15 per cent of working-age Ontarians have low levels of literacy and numeracy skills, meaning day-to-day activities, such as reading instruction manuals or sending emails, can be difficult or impossible. Many people with low literacy and numeracy skills are employed, but these skill gaps can close doors to other opportunities.
Whether acquired through a training program or by securing an Ontario Secondary School Diploma, these essential building blocks open doors — to advancement in the workplace, new opportunities, or enrolment in an apprenticeship, college or university program that will help individuals launch into their next career.
The Ontario Lifelong Learning and Skills Plan includes three elements:
- Investment and enhancements to the adult education and essential skills system;
- The new OSAP support for mature students to access postsecondary education; and
- The updating of key Employment Ontario programs that support unemployed, displaced and incumbent workers who require retraining and skills building.
Ontario will enhance its adult education system, making it more learner-centred by improving pathways and expanding services and programs that will provide around 90,000 more adults with easier access to skills training and upgrading. This will help adult learners meet their employment and education goals as quickly as possible. The plan will include an expansion and improvement of the Literacy and Basic Skills program, enhance dual credit opportunities for adults, fund technical and workplace-based skills training pilots, and support Ontario Bridge Training for internationally trained immigrants.
Employment and Training Services Transformation
The government currently invests more than $1 billion annually in a range of employment and training programs that support unemployed Ontarians, improve their skills and help them find jobs, as well as assist employers in addressing their workforce needs. Through Employment Ontario, employment services and training programs serve approximately one million people every year, helping them make career choices, access training and find good jobs.
While the employment and training system continues to support unemployed workers, it must also respond to the needs of the changing economy and offer support to other groups, including employed workers who need to build their skills to adapt or find their next job.
Second Career was established in response to the global recession of 2008–09. While it was successful in helping retrain workers who were laid off following the recession, the global economic landscape continues to change. The emerging needs of Ontarians require that programs, such as Second Career, designed for the challenges of yesterday, be recalibrated to address the challenges of today and tomorrow.
Over the next year, the Province will be working with its Employment Ontario service delivery partners, education and training institutions, employers, workers and job-seekers to modernize key employment and training programs, such as Second Career and the Canada–Ontario Job Grant, which support unemployed or employed workers who want to build on their skills, as well as employers with training needs. This plan will ensure that every adult learner, regardless of their background, skills and experience, will be supported to access the best services to meet their learning goals.
Inclusive Skills Development
Provincial Employment Strategy for People with Disabilities
The government recognizes that despite being willing and able to work, people with disabilities continue to face multiple barriers to employment. Ontario is committed to supporting people with disabilities in gaining meaningful work opportunities and contributing their talents and skills to Ontario’s economy.
In the 2016 Budget, Ontario announced its commitment to develop a provincial employment strategy to help more people with disabilities connect to job opportunities and more businesses to connect to a talented and underutilized labour pool. The goal of the strategy is to increase employment among Ontarians with disabilities by:
- Supporting the employment aspirations of youth and students with disabilities by promoting early work experience and skills development;
- Shifting to a person-centred employment and training system — guided by the individual job seeker’s interests, skills and strengths, while acknowledging the need for a shift in broader societal attitudes towards people with disabilities;
- Establishing the government as a leading employer and change agent; and
- Engaging employers as champions and partners.
The strategy will also help colleges and universities increase capacity to support students with disabilities. An early focus on students with Autism Spectrum Disorders will support students as they transition into postsecondary education, complete their studies and enter the workforce. Two demonstration projects led by Algonquin College and York University, in partnership with district school boards, have developed and implemented a new process to help these students transition into postsecondary education, and support them during their studies thereafter. In the first three years, over 87 per cent of the students involved completed their first year of study.
To develop its new strategy, the Province has consulted with individuals with disabilities and other key groups, including disability organizations, service providers, educators, business leaders and not-for-profit organizations. Ontario also took the advice of the Partnership Council on Employment Opportunities for People with Disabilities and the Premier’s Highly Skilled Workforce Expert Panel.
Helping Newcomers Integrate into the Labour Market
Ontario remains a highly desirable destination for newcomers. Throughout the past decade, an average of over 100,000 immigrants came to Ontario each year. Many immigrants are highly educated and their earnings improve over time, regardless of whether they arrived as economic immigrants or refugees. Helping newcomers integrate quickly into the labour market is a key priority for the Province and helps build strong and inclusive communities.
Ontario continues to support various settlement and integration programs, including Ontario Bridge Training programs that serve skilled newcomers seeking licensing or certification and connect them to the labour market. Ontario is investing $21 million over three years to support the Ontario Bridge Training program. Each year, over 6,000 highly skilled immigrants access Ontario Bridge Training projects in up to 100 occupations across a wide variety of sectors, including pharmacy, engineering, nursing, physiotherapy, financial services, information and communications technology, and the skilled trades.
Empowering Newcomers’ Financial Literacy
To help newcomers integrate and succeed, the government is also providing support for a financial literacy program so that newcomers have the knowledge they need to establish their financial security. The government is providing funding to Credit Canada for Newcomers & Money 101, a new initiative that will provide newcomers with the financial literacy training and tools they need to navigate the Canadian banking system, understand budgeting and money management, handle credit and protect themselves from fraud.
See Chapter IV, Section D: Building Inclusive Communities and Improving the Justice System for details on refugee resettlement initiatives in Ontario.
Championing Women’s Empowerment
Ontario is proud to lead in the pursuit of gender equality. Ontario has taken a government-wide approach to supporting women, including the creation of a stand-alone Ministry of the Status of Women dedicated to the security, equality and empowerment of women and girls.
The Province understands the value of women in the workforce, and what their contribution means for economic prosperity in Ontario, and indeed the country. That’s why the government has played a leadership role in women’s economic empowerment and corporate leadership through the action plan to close the gender wage gap and an initiative to support women in corporate leadership.
Ontario is also committed to strengthening the use of gender-based analysis within government to make sure considerations of gender are an essential component of the policy development process.
In June 2016, informed by a Catalyst Canada report commissioned by the Province, Ontario announced gender diversity targets for both government appointees and private sector boards of directors. The government also convened a steering committee of corporate governance leaders to provide strategic insights for developing a plan to accelerate greater representation of women on boards of directors. The plan will be released in the coming months.
This plan will be part of a new women’s economic empowerment strategy. This summer, the Province will be engaging with key stakeholder groups to help shape this strategy, so that more women are able to reach their full economic potential.
The government has long recognized that empowerment has to start with security. Ontario is leading here too by taking a stand on sexual, domestic and gender-based violence. The government’s globally recognized #WhoWillYouHelp and #ItsNeverOkay bilingual campaigns, Sexual Violence and Harassment Action Plan, and Domestic Violence Action Plan continue to raise awareness and provide support for survivors of gender-based violence. The Province will continue its work, including through an updated domestic violence action plan, to ensure women have security and safety in all parts of their lives.
Changing Workplaces Review
In Ontario, decency, dignity and fairness in the workplace are the expectation, not the exception. Ontario continues to approach workplace rights and responsibilities from a shared sense of decency, no matter what workplaces look like or how they change.
The Labour Relations Act and Employment Standards Act are being reviewed in order to address the changing nature of work and the challenges that come with it. Businesses need to stay competitive in a fast-paced global economy, and just as importantly, workers need and deserve protections that take into account the changing workplace.
The Changing Workplaces Review was designed to consider the broader issues affecting workplaces, and assess how the labour and employment law framework should address these trends and issues. This review is about developing reforms that reflect the realities of this modern economy, and the government will be carefully considering the recommendations made by the Special Advisors.
These recommendations will address fundamental issues including:
- Whether more employees should be covered by labour relations protections and minimum standards;
- How “employee” and “employer” are defined under employment and labour laws;
- How to deal with the differential treatment of part-time and full-time employees;
- What minimum standards should be in place for personal emergency leave; and
- Whether changes need to be made to better calibrate the protections for bargaining rights enshrined in the Labour Relations Act.
The Special Advisors will also be making recommendations with respect to the enforcement of the Province’s labour laws. As they identified in their Interim Report on the Changing Workplaces Review, enforcement and the need for widespread compliance are critical requirements of a system of employment standards. Strong, effective enforcement is essential to ensure that employers who do not respect protections for workers are held accountable.
By creating a framework of fairness and respect, the government is building an economic environment that will continue to attract the very best workers to Ontario. A final report of the Changing Workplaces Review is expected in spring 2017.
Investing in Jobs for Today and Tomorrow
While helping people prepare for the jobs of tomorrow, the government is also spurring business growth and job creation. The Province has lowered the cost of doing business through its competitive corporate income tax rates and its focus on modernizing regulations. It has made critical investments in infrastructure to facilitate economic activity, resulting in more jobs for Ontarians. Strategic partnerships between government, the private sector and communities are creating opportunities for people and companies across the province.
Remaining at the forefront of the globally competitive world of transformative technologies, Ontario positions itself to anticipate and respond to the impacts of new employment opportunities and economic growth. The government continues to make significant investments to support Ontario’s transition to an innovation-based, low-carbon economy.
Due to these efforts, Ontario continues to attract international business investment. Ontario is recognized as an economic leader in Canada, with ongoing employment growth in high-quality jobs. With private-sector forecasters signalling Ontario will remain among Canada’s growth leaders over the next two years, the government is focused on ensuring the benefits are more evenly shared across the province.
What We’ve Been Doing since 2013
- Supporting an economy that has generated nearly 700,000 net new jobs since the depths of the 2008–09 global recession
- Creating and retaining more than 37,600 jobs across the province through the Jobs and Prosperity Fund
- Making investments in public infrastructure to support jobs
- Maintaining a competitive business tax environment
- Collaborating with communities to take a strategic approach to supporting employers’ needs through Local Employment Planning Councils
- Helping Ontario businesses, including small and medium-sized enterprises (SMEs), expand and hire by supporting the adoption of innovation, increasing access to capital, and helping firms grow their exports
- The unemployment rate declined from 9.6 per cent during the global recession to 6.4 per cent in March 2017, below the national average for the 24th consecutive month
Long-Term Infrastructure Plan
Investment in public infrastructure is essential to providing services, growing the economy and ensuring prosperity and a high quality of life for Ontarians, whether they live in large, small, urban, northern or rural communities. The Province is investing more than $190 billion in public infrastructure over 13 years starting in 2014–15, for priority projects such as roads, bridges, public transit, hospitals and schools. The increase of $30 billion from the 12-year plan announced in the 2016 Budget is the result of investments, such as new hospital projects, school renewal initiatives and child care expansion.
- In the short term, these investments will support jobs in businesses that build, maintain and service assets and provide related services.
- In the medium term, the economy will benefit from new schools and hospitals as well as improved roads and public transit, moving goods to market faster, and reducing commute times so that people can get home sooner and spend more time with their families.
- In the long term, these investments will support a more productive economy, stimulating competitiveness and attracting the business investment and talent needed for economic prosperity.
- Beyond boosting competitiveness, these investments will also enhance Ontarians’ quality of life by providing accessible spaces, better places to learn, and more comfortable experiences for those receiving health and community services.
To help ensure that public infrastructure is aligned with the needs of Ontarians, the government is creating a Long-Term Infrastructure Plan that describes the Province’s existing infrastructure portfolio, outlines anticipated needs of the portfolio and proposes strategies to meet these needs. The Province plans to release the Long-Term Infrastructure Plan by the end of 2017.
Infrastructure investments not only spur the economy but create jobs for Ontarians. For example, in December 2016, Ontario finalized a landmark agreement with government agencies, business, labour and the local community to help people from disadvantaged communities along the Eglinton Crosstown Light Rail Transit (LRT) corridor get construction jobs on one of the largest transit projects in Canada. The Eglinton Crosstown LRT is the first of several major transit projects that will include an agreement providing a range of social and economic benefits for communities. In the coming months, Ontario will consult on the creation of a Community Benefits framework, guided by the principle that public procurement can create community benefits that go beyond simply building infrastructure.
Business Growth Initiative
As announced in the 2016 Budget, the Business Growth Initiative (BGI) is the government’s plan to support Ontario’s transition to the new economy. Ontario already has a strong foundation for innovation and entrepreneurship, with internationally recognized research institutions, and more than 574,000 Ontarians employed in science and engineering occupations in 2016. The BGI will create opportunities to make Ontario’s economy more innovative, help scale up small businesses into medium-sized and large enterprises, and reduce the regulatory burden on businesses. Through the BGI, more well-paying jobs will be created across Ontario.
Since the 2016 Budget announcement, the government has started to implement a number of key commitments to deliver on the BGI.
TABLE 3.1 Progress Update on the Business Growth Initiative
|Cleantech Equity Fund||A new $55-million fund to make equity investments in cleantech firms, supporting Ontario SMEs. In January 2017, an Expression of Interest was issued for a fund manager.|
|Perimeter Institute||Investing $50 million at the Perimeter Institute, a world-class research centre for theoretical physics, to provide funding through 2021–22. This investment will support research that helps foster the next generation of technological advancements in areas such as quantum computing.|
|Scale-Up Voucher Program||Investing $32.4 million over four years to provide high-impact firms with vouchers to access business development tools and services. This will help firms in Ontario with high growth potential reach the next stage in their development. The program will be launched in spring 2017.|
|Small Business Innovation Challenge||A $28.8-million pilot to help Ontario SMEs demonstrate innovative technological solutions to problems identified by the government. The program was officially launched in March 2017.|
|ScaleUP Ventures Fund||Ontario committed $25 million to a new venture capital fund targeting a final size of over $75 million. The fund will also provide mentorship to entrepreneurs. To date, the fund has invested in seven companies.|
|Colleges Applied Research and Development Fund||A three-year, $20-million fund to support industry-academic collaboration between Ontario businesses and colleges. The fund was launched in January 2017.|
|Automotive Supplier Competitiveness Improvement Program (ASCIP)||Investing $5 million over two years to establish an Automotive Supplier Competitiveness Improvement Program (ASCIP). Targeted to small and medium-sized automotive suppliers, ASCIP launched in October 2016 to support the automotive parts sector in adopting industry-leading software and hardware and to provide related training to increase the competitiveness of the industry in Ontario. Up to March 31, 2017, ASCIP has provided funding to 22 industry projects.|
|Ontario Investment Office||The recently established Ontario Investment Office will provide a one-window concierge service for businesses looking to invest and expand in the province. In March 2017, the first Chief Investment Officer was named.|
The government will continue supporting the transition to the new economy by expanding the BGI to more than $650 million over five years. These investments will ensure Ontario is at the leading edge of research and development (R&D) of transformative technologies that will create the jobs of tomorrow.
TABLE 3.2 New Investments through the Business Growth Initiative
Artificial intelligence (AI) allows computers to improve productivity in companies by performing complex physical and intellectual tasks. The potential application of AI, with a specific focus on deep learning and machine learning more broadly, will affect all sectors of the economy. Examples of applications include improved medical diagnostic imaging and self-driving cars.
The government is investing $50 million to establish the Vector Institute for artificial intelligence. The institute will also be supported by the federal government, other institutions, and more than 30 private-sector companies that have committed to invest over $80 million. The institute will work to produce, attract and retain top talent in the field, support AI technology startups, and generate investment from companies looking to hire experts and expand their AI divisions.
5G (fifth-generation wireless technology) aims to increase telecommunications network capacity and speed by up to 1,000 times for mobile and connected devices. It will serve as the backbone infrastructure for technologies such as autonomous vehicles.
The Province will invest $130 million over five years in two projects — $67 million in ENCQOR (Evolution of Networked Services through a Corridor in Québec and Ontario for Research and Innovation) and $63 million in CENGN (Centre of Excellence in Next Generation Networks). These industry-led consortiums will advance the development and commercialization of 5G and next-generation technologies and networks across Ontario. Northern and rural Ontario will be connected to the testing facilities through the Ontario Research and Innovation Optical Network.
Quantum science seeks to understand and apply the behaviour of matter and energy at the atomic level. The application of quantum science could help improve the efficiency of computers, as well as communications and sensor technologies.
To help facilitate application-based research and commercialization, the Province will partner with Waterloo’s Quantum Valley to create the Quantum Valley Ideas Lab. A Provincial investment of $20 million over five years will help develop the cutting-edge research, train highly qualified personnel, and support academics in the field of quantum science.
Ontario’s researchers and businesses need access to state-of-the-art computers and the capability to process large amounts of information in areas such as genomics and neuroscience.
The Province will invest $75 million over the next five years in an Advanced Research Computing and Big Data Strategy. This investment will support operating costs for advanced computing across the province, new hardware investments at the University of Toronto and the University of Waterloo, new research projects, and improved coordination.
The Province is investing $80 million over five years to create the Autonomous Vehicle (AV) Innovation Network, in partnership with Ontario Centres of Excellence. The network will capitalize on the economic potential of AVs (vehicles capable of sensing and communicating with their environment and navigating without human input) and help the province’s transportation systems and infrastructure adapt to AV technology. Ontario’s investment will support industry-led AV R&D projects; create sites across the province to develop, test and validate new technology, including a Demonstration Zone in Stratford; and attract and grow talent in the AV sector.
Embracing the FinTech Sector
Ontario has a strong innovation-driven tech sector with leading-edge tech companies and a competitive R&D ecosystem. Embracing opportunities presented by the province’s growing tech sector and advances in FinTech, Ontario’s financial services industry has become increasingly competitive. Nevertheless, the government recognizes that continuing efforts will be necessary to maintain a leadership position in this evolving sector. While these efforts will undoubtedly continue to take place within the financial sector itself, the government recognizes the importance of providing support where it can effectively do so.
Ontario’s FinTech strategy has three primary goals:
- Enhance Ontario’s position as a global leader for financial services, recognizing the increasing importance that FinTech will continue to play in the sector;
- Maintain consistency with the government’s other ongoing efforts in the technology sphere by promoting growth in FinTech in a way that produces jobs and investment; and
- Ensure that, as FinTech develops, Ontarians continue to enjoy the high levels of consumer and privacy protection that are already key strengths of Ontario’s financial sector.
In support of the strategy, the government will soon announce details about its collaboration with the financial services and FinTech sectors.
Maintaining strong cybersecurity in the province’s private financial institutions is crucial to ensuring consumer and business information remains safe and protected.
For this reason, the government is announcing a $4-million pilot that will help reduce cybersecurity risks. As part of the pilot, the province’s financial institutions will be linked with Ontario SMEs to develop and facilitate the adoption of technological solutions. The project will build on Ontario’s internationally recognized strength in the emerging cybersecurity sector, strengthen the province’s private financial institutions, and create high-tech jobs. Ontario Centres of Excellence will administer the pilot program.
Increasing Access to Capital for Entrepreneurs
The supply of capital to SMEs is a key factor affecting businesses’ ability to grow and create well-paying jobs for Ontarians. For this reason, the Province has actively engaged in partnerships to improve access to capital for Ontario companies. In January 2014, Ontario launched the Northleaf Venture Catalyst Fund with the support of the federal government and private sector partners. To date, the fund has made 22 investments in companies and other venture capital (VC) funds.
The Province also continues to support the Investment Accelerator Fund (IAF), which has invested in 110 companies, including:
- Ranovus, an Ottawa-based developer and manufacturer of technologies for data centres and communications networks, has raised more than $25 million US in funding;
- Axonify, a Waterloo-based company providing a software-as-a-service (SaaS) platform for employee learning, has raised $27 million US in growth funding;
- CrowdCare, a Richmond Hill-based provider of artificial intelligence solutions for customer service uses, has also recently received an investment led by the ScaleUP Ventures Fund;
- Temporal Power, a Mississauga-based developer of high-performance energy storage flywheel technology, was recently awarded a contract for a 5MW flywheel energy storage system on the island of Aruba;
- gShift, a Barrie-based developer of web presence analytics software, was named as one of Canada’s fastest-growing companies in 2016; and
- NVT Phybridge, an Oakville-based provider of internet protocol (IP)-enabling networking hardware, was recognized as one of the most promising Unified Communications Solutions Providers in 2016.
Ontario’s efforts to improve access to capital are achieving great success. In 2016, venture capital investments of $1.8 billion were made in Ontario-based companies — a 48 per cent increase over the previous year, and the most since 2001. Ontario ranked fourth among all American states and Canadian provinces in the amount of VC investments — up from 14th place in 2009. The province received 50 per cent of all VC investment in Canada in 2016.
Ontario continues to deliver on its commitment to build an effective and efficient regulatory environment for businesses by eliminating duplication and reducing unnecessary red tape. Legislative amendments under the government’s Burden Reduction Act, 2017, will help businesses avoid costs of up to $200 million.
Promoting and Diversifying Trade
Promoting international trade is an important part of the government’s plan to create opportunities for Ontario businesses to expand abroad and grow the province’s economy at home. Trade accelerates innovation, increases foreign investments and creates jobs. In 2016, the value of Ontario’s international exports was more than one-third of the provincial GDP. According to the Conference Board of Canada, every $100 million increase in exports creates approximately 1,000 new jobs.
Expanding International Trade Opportunities
Over the past decade, Ontario has been diversifying its exports to more international markets. The government is raising Ontario’s international profile, attracting foreign investments and supporting Ontario-led trade missions.
To aid these activities, the government is investing almost $50 million over three years to expand Ontario’s footprint in key international markets and grow the province’s capacity to help businesses expand globally. With more Ontario representation in strategic locations across the world, Ontario companies can better access just-in-time market intelligence and fully leverage existing partnerships. New investments will also expand the continuum of programs offered to SMEs here at home to help more companies become exporters and assist existing ones to reach new global markets and diversify their revenue source.
On October 30, 2016, the Canada–European Union (EU) Comprehensive Economic and Trade Agreement (CETA) was formally signed. The reduction and elimination of trade barriers will make Ontario’s goods more competitive in the European Union, the largest single market in the world. The trade agreement is expected to create 30,000 new Ontario jobs and boost the province’s GDP by $4.5 billion.
The Province is also working with the federal government to diversify international trade through the negotiation of free trade agreements, including seeking opportunities with other trading partners in Asia.
Reducing Barriers to Interprovincial Trade
Regulatory inconsistencies across provinces can cause unnecessary barriers to doing business. Ontario has been working with the federal, provincial and territorial governments to renew and modernize the 20-year-old Agreement on Internal Trade (AIT). The new Canadian Free Trade Agreement that was announced in April 2017 replaces the AIT and will improve the flow of goods and services and reduce the cost of doing business across provinces.
Ontario is continuing to support workers and businesses by advocating for continued free trade with the United States. Nowhere else is open trade more important than in Ontario’s strong business relationships with the United States. In 2016, Ontario exported $166 billion worth of goods to the United States, which is equivalent to one-fifth of the province’s GDP. Ontario is taking a number of proactive steps to support businesses so they can continue to strengthen this longstanding and mutually beneficial economic tie with the United States. For example:
- Establishing a Premier’s Committee on Ontario-U.S. Economic and Trade Relations. This committee provides a forum to discuss progress and provide advice on Ontario’s U.S. engagement strategy, including the promotion of Ontario’s interests in the context of any discussions on the North American Free Trade Agreement.
- The Premier has travelled to neighbouring U.S. states to highlight the role two-way trade plays in supporting jobs and economic growth. In July 2017, the Premier will travel to the National Governors Association meeting in Rhode Island to foster closer connections with state-level partners.
- In the fall, Premier Wynne and Governor Snyder of Michigan will co-host the Conference of Great Lakes and St. Lawrence Governors and Premiers Leadership Summit, bringing together Great Lakes–St. Lawrence governors and the premiers of Ontario and Quebec. The Summit attendees will discuss how to advance sustainable development in the Great Lakes region, and this event will reaffirm the importance of healthy Great Lakes to Ontario’s environment, economy and society.
- Roundtables are being held with the province’s business community to hear its views on issues and opportunities presented through U.S. trade.
- Ontario is actively supporting the federal government’s efforts to create a positive dialogue with partners in the United States.
- The Province has hired an international trade expert to act as a Provincial trade advisor, and Ontario’s representative in Washington is actively advocating for Ontario’s interests and priorities with key U.S. stakeholders and influencers.
The government is investing new resources to ensure Ontario’s interests are well represented throughout the United States. Ontario recently demonstrated success by working closely with partners in the federal and Quebec governments to engage New York State’s legislators and advocate for free trade and open, fair and competitive access to government contracts. The Province will continue its efforts to enhance trade relationships with partners in the United States and around the world, and will consider all reasonable options to protect Ontario jobs in the face of Buy American policies or legislation.
Supporting Businesses through the Jobs and Prosperity Fund
The Jobs and Prosperity Fund is a 10-year, $2.7-billion fund that helps the government partner with businesses to enhance productivity, innovation and exports. Project commitments to date will support the creation and retention of more than 37,600 jobs, leveraging business investments of more than $7.4 billion.
TABLE 3.3 Recent Strategic Investments through the Jobs and Prosperity Fund
|An investment of up to $4.5 million to help the company expand its digital media operations in Toronto. Stereo D plans to invest about $143 million in Ontario over the life of the project. The project will create and retain 358 jobs.|
|Ippolito Fruit & Produce Limited
|An investment of $1.7 million to support the expansion of Ippolito’s fresh produce operations in Burlington. The company is Canada’s largest fresh spinach packer, and the investment will help the company grow its business and expand its processing facilities. The project will create and retain 332 jobs.|
|Lavern Heideman & Sons Limited
|An investment of $4 million to support the expansion of a sawmill in Eganville. The project will allow the fast-growing mill to continue to grow its business and increase efficiency by modernizing its facilities and purchasing new equipment. The project will create and retain 108 jobs in the community.|
Investing in the Future of Ontario’s Auto Sector
The government continues to make strategic investments to create and retain jobs in the auto sector. Since 2004, Ontario has committed $1.35 billion, leveraging $15.62 billion in private-sector investments, which has helped support 70,524 direct jobs, as well as thousands more in the auto supply chain. Recently, the government announced the following new investments:
- In January 2017, the government secured an investment by Honda of up to $492 million by committing up to $41.8 million for upgrades at its Alliston assembly plant. This includes a new state-of-the-art paint shop and leading-edge vehicle assembly technologies, as well as R&D, and will support future vehicle models while securing 4,000 direct jobs.
- In March 2017, the government secured an investment by Ford of over $1 billion by committing up to $102.4 million for projects including upgrades to its Windsor Engine Plant to preserve 500 jobs. The investment also establishes a global Connectivity Innovation Centre with almost 300 new engineering positions in Ottawa, Waterloo and Oakville, along with significant additional R&D expenditures.
Supporting Ontario’s Manufacturing Sector
Ontario’s dynamic and diverse manufacturing sector is sustaining jobs across the province and generating most of Ontario’s goods exports. Manufacturing directly accounts for over 660,000 jobs and generates over 12 per cent of Ontario’s GDP. Supported by greater demand and a more competitive Canadian dollar, Ontario manufacturing sales increased over 37 per cent between 2009 and 2016, to almost $301 billion.
The Province has taken significant measures to help support the growth of the manufacturing sector. Ontario’s competitive business taxes have helped maintain the province’s position as an attractive jurisdiction for manufacturing investment. Additionally, significant investments through the Jobs and Prosperity Fund have helped to secure anchor investments across a variety of key manufacturing sectors, including auto, aerospace, chemicals and food processing.
Ontario is taking action to help manufacturers manage electricity costs. On January 1, 2017, the Industrial Conservation Initiative, which helps large electricity users reduce their bills by providing an incentive to shift electricity consumption to off-peak hours, was expanded to include more than 1,000 newly eligible customers by reducing the threshold for eligibility and opening the program to all sectors. The Northern Industrial Electricity Rate Program allows qualifying large northern industrial energy consumers reduce electricity costs to help maintain competitiveness.
The Corporate Income Tax (CIT) rate on income from resources, manufacturing and processing (M&P) was reduced from 12 per cent to 10 per cent in 2010. Ontario manufacturers and processors also benefit from an accelerated depreciation rate for manufacturing and processing machinery and equipment from 2016 to the end of 2025.
Supporting Growth in Ontario’s Agricultural Sector
Ontario’s agri-food sector — including primary agriculture, food and beverage processing and services — is a cornerstone of the economy and helps underpin growth in rural Ontario. The sector contributes over $36 billion to GDP and supports over 800,000 jobs across the province.
Since the announcement in 2013 of the Premier’s Agri-Food Challenge for the sector to double its growth rate and create 120,000 jobs by 2020, the agri-food sector has created over 40,000 net new jobs.
The government recognizes the importance of risk management for farmers across the province and continues to support farmers through farm income stabilization and business risk management programs.
The government will also continue to partner with other provinces, territories and the federal government to create Canada’s next agri-food policy framework.
In March 2017, the government announced $19 million for the Greenhouse Competitiveness and Innovation Initiative to help the greenhouse farming sector invest in innovative technologies, reduce production costs and increase productivity. The initiative will also help greenhouses expand their businesses, attract new investment and create good jobs. In 2016, Ontario’s greenhouse sector and related value chain supported over 81,000 jobs and $3.2 billion towards Ontario’s GDP. The government will continue to provide the greenhouse sector with supports to foster jobs and economic prosperity in the province.
Promoting Regional Economic Development
Ontario’s prosperity arises from the collective economies of its regions. Over time, these regional economies have evolved in different ways, based on their respective strengths and specialities.
Despite the strong growth Ontario is experiencing, there is still work to be done to create opportunities for further economic growth across the province. The government is committed to developing regional economic development plans that will include strategies to build on the unique strengths of each region and aim to bolster their economic growth. Ontario will continue consultations this summer and work in partnership with key stakeholders, including communities, business, labour partners, and colleges and universities to develop these plans.
Investing in Regional and Community Partnerships
Investing in regional development is a vital part of the government’s plan to strengthen Ontario’s economy and create a dynamic environment where businesses thrive.
TABLE 3.4 Recent Regional Development Investments
|DRS Technologies Canada Ltd.||$718,482||
274 jobs created and retained
|Ontario supported an investment in Kanata in new equipment and facility expansion through the Eastern Ontario Development Fund (EODF). The plant manufactures electronics for aerospace, defence and space applications.|
|Dajcor Aluminum Ltd.||$1 million||175 jobs created and retained||Ontario supported an investment through the Southwestern Ontario Development Fund (SWODF) in new state-of-the-art fabrication equipment that will increase capacity and efficiency, enabling Dajcor to expand into new markets. The Chatham-based company manufactures extruded and fabricated aluminum components used in various applications that include automotive, marine and construction.|
|Mariposa Dairy||$500,000||146 jobs created and retained||Through the Rural Economic Development (RED) program, Ontario supported Mariposa Dairy in becoming an industry leader through the introduction of cutting-edge equipment. The company, located in Kawartha Lakes, produces high-quality goat and sheep cheese.|
|Stack Brewing Corp.||$918,183||34 jobs created and retained||Ontario supported an investment in equipment and leasehold improvements to increase brewing capacity at Stack Brewing through the Northern Ontario Heritage Fund Corporation (NOHFC). The Sudbury-based company produces craft beer that is available across Ontario.|
Strengthening Indigenous Communities
Ontario has made it a priority to improve social, economic and health outcomes for Indigenous peoples by investing in an Aboriginal Economic Development Fund (AEDF) designed to improve access to financing, skills training and community economic planning supports.
In 2016, the Province committed to investing $70 million over the next seven years to extend the fund, originally launched in 2014, for a total combined investment of $95 million over 10 years. To date, Ontario has funded 57 projects with Indigenous partners through the AEDF.
Aboriginal Community Capital Grants Program
The Aboriginal Community Capital Grants Program (ACCGP) promotes strong Indigenous communities, by funding community capital projects that provide a delivery point for community services and business activity. The ACCGP provides funding for First Nation communities and Indigenous organizations to build or renovate needed community infrastructure, such as community centres, daycare facilities or small business centres.
From 2003 to 2016, Ontario has provided more than $38 million in capital grants to Indigenous communities through the ACCGP. Ontario will invest $3 million through the ACCGP in 2017–18.
Helping Businesses Find Skilled Newcomers
Ontario is continuing to help businesses by accepting more skilled newcomers through the Ontario Immigrant Nominee Program (OINP). Through the OINP, Ontario nominates people for permanent resident status, including skilled workers, international students, temporary workers and experienced entrepreneurs with established foreign companies who are looking to expand their business operations in Ontario. Recognizing the success of the OINP and its importance to Ontario’s economy, the federal government has increased the province’s 2017 allocation by 500 nominees to a total of 6,000. The OINP is also modernizing its application process this year with a new, paperless online system that will speed up the application process, improve customer service, and help employers find the skilled workers they need more quickly.
Ontario’s growing and diverse social enterprise sector currently supports approximately 10,000 enterprises. These social enterprises contribute to job creation while also creating positive social outcomes, including providing employment opportunities and training to persons facing barriers. To further accelerate the growth of the social enterprise sector, the Province launched Ontario’s Social Enterprise Strategy 2016–2021 in summer 2016.
Since the launch of the strategy, the Province has partnered with the Ontario Network of Entrepreneurs (ONE) to build capacity and provide specialized supports to social entrepreneurs. The Province also launched the second round of the Social Enterprise Demonstration Fund and opened applications for 200 vouchers through the Ontario Social Impact Voucher Program. These programs support Ontario’s social enterprises by providing access to capital and value-added supports and services.
Supporting the Sharing Economy
Ontario recognizes the sharing economy as an integral part of an innovation-driven economy with potential to stimulate entrepreneurship, productivity and economic growth. Sharing economy platforms continue to leverage technology to diversify traditional business models and are becoming increasingly popular among consumers. Participating in the sharing economy can provide Ontarians with economic benefits including increased choice, affordability and better resource utilization.
Since the 2016 Budget, the Province has continued to use a whole-of-government approach to support the growth of the sharing economy while also protecting workers, consumers and communities. This includes closing the gap in auto insurance coverage for private vehicles for hire, and undertaking a Changing Workplaces Review that takes into consideration new employment structures.
Collaborating with Cities
Building on the government’s commitment to explore a framework for home-sharing in Ontario that balances municipal and provincial responsibilities and objectives, the Province is collaborating with the City of Toronto to increase Ontario’s understanding of municipal concerns and inform the Province’s framework. The Province is also engaged with the Large Urban Mayor’s Caucus of Ontario (LUMCO) and the City of Guelph to investigate how municipalities may address local issues and opportunities associated with the sharing economy at the community level. The Province and LUMCO will develop assessment tools to help councils and communities analyze the impact of various online services on their residents and on new and existing businesses.
Mapping the Provincial Sharing Economy Strategy
In 2017, the government will release its integrated Sharing Economy Strategy. Using broad, evidence-based research, the strategy will reflect the Province’s principled approach to supporting the new innovation economy, while ensuring strong standards for consumer protection and worker well-being.
The strategy will build on Ontario’s commitment to respect existing business interests by modernizing regulations and reducing red tape.
The Province is also partnering with Ryerson University to co-host three policy research and design events. Participants will explore how social enterprise initiatives can innovate and collaborate with government and communities to grow the sharing economy while creating positive social and environmental impact.
Ontario is well positioned to lead the way as it prepares a highly skilled workforce to play a key role in growing an innovation-driven, knowledge-based digital sharing economy. This economy will create jobs, support businesses, satisfy consumers’ demand for choice, and operate in a fair and competitive marketplace with minimal government intervention.
Transitioning to a Low-Carbon Economy
Fighting climate change is key to creating the kind of future Ontarians want. Rising average temperatures have already led to widespread extreme weather events, including severe storms, flooding and heat waves, which have damaged communities, homes, businesses and crops and have also increased insurance rates. A study conducted by the Canadian Medical Association also indicated that the economic costs of air pollution were over $8 billion in 2008.6
Forests, wildlife, agriculture and tourism are facing new challenges in a changing climate. In the Far North, rising temperatures in recent years have shortened the duration of winter roads, which are an important economic lifeline to remote communities. These impacts and the associated costs will only worsen if timely action is not taken. To avoid the potentially devastating impacts of climate change in the future, reducing greenhouse gas (GHG) emissions today is crucial. Acting now also positions the economy to take advantage of the accelerating global transition towards the production and use of low-carbon goods and services.
That is why Ontario has committed to a plan that will result in economic growth and job creation by protecting the environment against further climate change. Through steps being taken today, Ontario is tackling climate change in a way that produces a cleaner environment, builds a low-carbon economy and creates jobs. Over the past year, the release of the Climate Change Action Plan and the recent implementation of a program to cap emissions have already begun to deliver results through key investments that will improve the everyday lives of Ontarians while helping to reduce GHG emissions.
Last spring, Ontario passed the Climate Change Mitigation and Low-carbon Economy Act, 2016, which established the Province’s targets for reducing GHG emissions. A market-based carbon pricing program achieves the most cost-effective emissions reductions (see Table 3.5). Ontario’s program came into effect on July 1, 2016. The first compliance period began on January 1, 2017, and program participants took part in the first auction of emissions allowances in March 2017. The auction generated $472 million, which by law will be invested in programs that will reduce GHG pollution and help families and businesses reduce their own emissions through the Climate Change Action Plan. In October 2016, the federal government proposed a pan-Canadian benchmark for carbon pricing, which would require all provinces and territories to have carbon pricing by 2018.
The government is developing carbon offsets as an additional way to enable market participants to reduce emissions. It is also working on a separate system of Ontario-based voluntary carbon offsets to support the government’s carbon-neutral commitment. Ontario will continue its collaborative approach and work with Indigenous organizations, stakeholders and other partners in shaping the design of carbon offsets.
TABLE 3.5 Carbon Pricing Scenarios — Impacts by 2020
|Item||Ontario’s Approach||Carbon Tax|
|Household Energy Impact
($/month; 2016 dollars)
|Net GHG Reduction
Table 3.5 Footnotes:
Note: The report Overview of Macroeconomic and Household Impacts of Ontario’s Cap and Trade Program by EnviroEconomics, Navius Research, and Dillon Consulting found that Ontario’s approach to emissions capping is the most cost-effective method of reducing emissions
Investing to Grow a Low-Carbon Economy
At the centre of Ontario’s climate change strategy is its five-year Climate Change Action Plan, which guides the investment of proceeds from carbon allowances and outlines ways to make a positive difference in people’s everyday lives and create jobs in a low-carbon economy. Proceeds are already being invested in initiatives, which will make it easier for Ontarians to make better choices that benefit them and support a low-carbon economy.
- Ontario is investing $377 million in 2017–18 through the Green Ontario Fund to make it easier for households and businesses to adopt proven low-carbon technologies. It will provide a range of programs, incentives and information to assist households, including
low-income households and Indigenous communities. The fund will also work with SMEs as well as with large industries to adopt new technologies to reduce their GHG emissions.
- Ontario is providing $200 million in funding in 2017–18 for schools to improve energy efficiency and install renewable energy technologies. See Chapter IV, Section B: Investing in Education for more information.
- Buildings in Ontario are responsible for nearly 20 per cent of the province’s GHG emissions.7 Ontario is investing $85 million in 2017–18 to support additional retrofit activities in social housing apartment buildings across the province. These retrofits will reduce GHG emissions and improve living conditions for low-income and vulnerable tenants, including those in small, rural, northern and Indigenous communities.
- The Province is investing $50 million in 2017–18 in commuter cycling infrastructure to give Ontarians a safe and low-cost commuting alternative between residential communities, workplaces, major transit stations and other destinations. It will implement cycling facilities and related infrastructure, such as cycling lanes separated by a curb and cycling signals, and will remove barriers to local cycling networks. This will enable people to take bikes and transit for their daily commute instead of personal vehicles, effectively reducing GHG emissions.
- The Province will invest more than $22 million in 2017–18 in electric vehicle (EV) charging infrastructure across the province, including at government facilities, making electric vehicles a viable option for more people.
These programs are in addition to the initiatives supported by the Green Investment Fund (GIF) which are already underway and kick-starting climate change actions by:
- Helping homeowners use less energy and reduce energy bills through home retrofits;
- Supporting more electric vehicle charging stations across Ontario;
- Retrofitting social housing developments to boost energy efficiency;
- Helping businesses reduce emissions;
- Funding local environmental organizations doing important conservation work; and
- Providing Indigenous communities with training, tools and infrastructure to address climate change.
As per the Climate Change Mitigation and Low-carbon Economy Act, 2016, all proceeds from carbon allowances must be used for initiatives that are reasonably likely to reduce or support the reduction of GHG emissions, as outlined in Chart 3.7.
Improving Retirement Security
Evidence suggests that about one-quarter of Canadian families do not have sufficient retirement savings. Of middle-income Canadian families without workplace pension plans, about half are not saving enough for retirement. The decline in workplace pension plan participation and the increase in life expectancy have made it more difficult to save enough for retirement. This is why the Province is focusing on strengthening the retirement income system so that Ontarians can be confident that they will have a secure retirement.
The recently achieved national agreement to enhance the Canada Pension Plan (CPP) is an essential part of the Province’s strategy to improve retirement security. Voluntary savings vehicles, such as pooled registered pension plans (PRPPs), also play an important role in Ontario’s retirement income strategy.
At the same time, workplace pension plans remain integral to retirement income security, helping provide many Ontario workers with the resources they need for a healthy and meaningful retirement. The government is engaged in many initiatives to strengthen and modernize these plans to build on the strong foundation provided by the CPP so that Ontarians can reach their retirement savings goals.
Enhancing the Canada Pension Plan
The Province is proud of its central role in achieving an enhancement to the CPP. The legislation to implement the enhancement came into force in March 2017. This historic accomplishment is the culmination of years of effort by Ontario, working with the federal government and other provinces and territories, to make the CPP better meet the retirement savings needs of today’s workers.
The Ontario government’s leadership and dedication to strengthening retirement security were fundamental to achieving the CPP enhancement. In late 2013, when faced with an impasse at the national level, Ontario turned its efforts to the development of the Ontario Retirement Pension Plan (ORPP). The Province’s advocacy for improving retirement saving, combined with its plans for introducing the ORPP, played a key role in ensuring that retirement security remained on the national agenda. Ontario’s work was also essential in driving the negotiations among the federal government, provinces and territories that resulted in the agreement to enhance the CPP.
The CPP enhancement will significantly improve the retirement security and future quality of life of many of today’s workers, particularly those without workplace pension plans, by providing them with a meaningful, lifelong increase in their retirement incomes (see Chart 3.8).
To allow businesses time to adapt, increases to CPP contributions will be phased in gradually over seven years, starting January 1, 2019. Low-income workers will also be protected from the cost of increased CPP contributions through an enhancement to the federal Working Income Tax Benefit.
Implementing Pooled Registered Pension Plans
The government has long been committed to introducing pooled registered pension plans (PRPPs) as a means of further strengthening Ontario’s retirement income system. On November 8, 2016, Ontario’s Pooled Registered Pension Plans Act, 2015 was proclaimed into force, and in early 2017, Ontario signed onto a federal–provincial multilateral agreement to harmonize the administration and supervision of PRPPs across various jurisdictions.
The agreement took effect in Ontario on March 31, 2017, making it now possible for this new low-cost, professionally managed, voluntary tax-assisted savings vehicle to be available in Ontario.
Reviewing the Solvency Funding Framework
An essential aspect of the government’s commitment to improving retirement security is Ontario’s work to improve the framework for the regulation of defined benefit pension plans and establish a framework for target benefit pension plans. At the heart of these improvement efforts is the objective of bringing the frameworks into alignment with current economic realities in a way that best supports plan sustainability, affordability and benefit security.
Ontario’s current defined benefit funding framework, including solvency funding requirements, was introduced nearly 30 years ago. While some reforms have been made since then, a changing economic landscape, volatility in investment returns and low interest rates have created funding challenges for defined benefit pension plan sponsors. Temporary solvency relief was provided in 2009 and 2012 to assist plan sponsors in managing these challenges. The 2015 Ontario Economic Outlook and Fiscal Review announced a review of the current solvency funding framework, along with another round of temporary solvency relief that was enacted in July 2016.
The review has involved extensive stakeholder engagement, including in-person consultations facilitated through a Stakeholder Reference Group; roundtable discussions with representatives from labour, employers, retirees and plan administrators, including those of jointly sponsored pension plans in the broader public sector; and individual stakeholder meetings. The government also reviewed more than 90 submissions that were received in response to its consultation paper released in July 2016.
The government intends to announce the guiding principles of the new framework later this spring, with draft regulations released for public consultation in fall 2017. Measures to support transition to the new framework will also be implemented this spring.
The government is continuing to work with other Canadian jurisdictions to modernize the agreement that governs multijurisdictional defined benefit pension plans, with the goal of maintaining protections for Ontario plan beneficiaries while facilitating the operation of multijurisdictional plans.
Introducing a Framework for Target Benefit Pension Plans
The government remains committed to developing a new regulatory framework for target benefit multi-employer pension plans (MEPPs). This framework would replace the time-limited funding regulations in place for certain MEPPs, known as specified Ontario multi-employer pension plans (SOMEPPs), whose members are unionized.
In developing the framework, the government is taking into consideration feedback received from stakeholders in response to the consultation paper released in summer 2015. The government intends to announce its proposed target benefit MEPP framework later this spring and release draft regulations for public consultation in fall 2017. The new framework will provide a transition period for plans to make necessary adjustments.
The government will also continue to explore options for a target benefit MEPP framework for plans that do not currently meet the SOMEPP criteria.
Expanding the Framework for Defined Contribution Pension Plans
Defined contribution (DC) pension plans are another important component of retirement security for Ontarians, since they represent a growing share of workplace pension plans. The government is taking steps to expand and modernize the legislative and regulatory framework related to DC plans, and consider innovative options for payouts in retirement.
As a first step, the government is introducing amendments to facilitate the implementation of variable benefits, and intends to develop regulations later this spring. Enabling the payment of variable benefits so that payments can be made directly from DC plans would allow retirees with variable benefit accounts to take advantage of investment expertise and cost efficiencies of the plan.
Effective disclosure to pension plan members, investors and consumers is one of Ontario’s priorities in all areas of pension and financial services regulation. It is critical that DC plan members be given the information necessary to make informed decisions around their retirement planning. For example, members’ annual statements could provide more guidance with respect to the retirement income than a DC plan may be able to generate. The government will engage DC plan sponsors, the financial services industry and pension experts on potential changes to the annual statements that could help DC plan members prepare more effectively for retirement. The government will also explore other options to enhance transparency that would modernize member communications and create regulatory efficiencies.
More broadly, Ontario will examine new approaches to managing the payout phase in retirement, often referred to as the “decumulation phase,” when retirees are drawing down their savings in order to produce retirement income.
As more workers with DC plans and other capital accumulation plans, such as PRPPs, retire, ensuring that these individuals have enough funds to maintain their standard of living throughout their retirement years will become increasingly important. The Province will engage the federal government, the financial services industry and pension experts to explore new avenues for Ontarians to manage investment and longevity risk. These would include new tools for Ontarians to draw down their savings in an efficient and cost-effective manner during the decumulation phase of their retirement.
The government will also explore other options to strengthen DC participation and performance.
Expanding the Powers of the Superintendent
The 2016 Economic Outlook and Fiscal Review announced that Ontario is taking steps to strengthen the regulatory oversight of workplace pension plans. In the fall of 2016, amendments to the Pension Benefits Act (PBA) were enacted to provide the Superintendent of Financial Services (Superintendent) with the authority to impose administrative monetary penalties (AMPs) in the pensions sector. Regulations required to implement AMPs will be posted this spring for public consultation.
Additional amendments are being introduced to further enhance the powers of the Superintendent. These amendments would give the Superintendent new powers, including the authority to direct a plan administrator to provide plan beneficiaries with information specified by the Superintendent, and to hold a meeting to discuss matters specified by the Superintendent.
The government will continue to develop other amendments to better protect pension plan beneficiaries and ensure more effective and efficient regulation of the sector, taking into account the experience of other jurisdictions.
Missing Beneficiary Requirements
The government is aware of the gap in the legislative and regulatory framework concerning pension plan beneficiaries who are difficult to locate. Currently, there are no guidelines in Ontario for locating missing plan beneficiaries and no ability to deal with monies owed to plan beneficiaries if they do not come forward to claim their benefits. For those plan administrators attempting to wind up pension plans, the inability to pay benefits to missing individuals can add delay and costs. For plan beneficiaries, it can be difficult to locate a benefit many years after leaving an employer.
To address this situation and modernize the current framework, the government will instruct the Superintendent to develop a policy to provide direction to administrators on steps they should take to locate beneficiaries. As some individuals may be difficult to locate, which can mean both increased cost and the risk of privacy violations, the government will also introduce an amendment to the PBA providing authority to the Superintendent to waive the requirement of providing periodic pension statements in situations where a plan administrator can demonstrate that the beneficiary should be considered missing.
The government will consider further changes to assist employers in dealing with missing beneficiaries and help individuals in locating pension benefits. These changes may include, for example, a registry where employers or administrators could post information regarding missing beneficiaries and individuals could search for missing benefits. The government will also explore options to allow the wind-up of pension plans in cases where missing beneficiaries remain, while continuing to protect the benefits of those who are missing.
The first bullet in the box entitled “Social Enterprises Making an Impact across Ontario” in Chapter III of the Budget Papers (page 90 of the print and PDF editions) has been deleted on the basis that it contained incorrect information regarding Magnusmode. A corrected version of this bullet has been added in a box entitled “Innovation Spotlight” on page 78 of Chapter III. We apologize for any inconvenience this may have caused.
2 Julie Peters, Peggy Sattler and Jenna Kelland, “Work-Integrated Learning in Ontario’s Postsecondary Sector: The Pathways of Recent College and University Graduates,” Higher Education Quality Council of Ontario (2014). ↵
7 National Inventory Report 1990–2014: Greenhouse Gas Sources and Sinks in Canada, Environment and Climate Change Canada (2016). ↵
Chart 3.1: Support from Early Years to Adulthood
This infographic describes Ontario government’s significant investments and initiatives to support learners from early years to adulthood, such as:
Under age 6: a renewed framework for early years and child care and helping 100,000 more children access affordable, quality licenced child care;
From age 6 to 13: expanded before- and after-school programs for children 6 to 12 years of age and 60 minutes per day focusing on effective instruction in math;
From age 13 to 18: focused learning on a specific economic sector with the Specialist High Skills Major program and improving math skills development and financial literacy;
From age 15 to 29: Ontario’s new Career Kick-Start Strategy, Employment Ontario services and Apprenticeship supports;
Above age 18: New OSAP, including free tuition for more than 210,000 students, eCampusOntario for online learning, and expanded career readiness opportunities to provide hands-on learning.
Chart 3.2: Significant Infrastructure Investments
This chart illustrates recent and planned infrastructure investments by the Province. Ontario invested $11 billion in 2014–15, $11 billion in 2015–16, and $12 billion in 2016–17 (interim).
Ontario is planning to invest about $156 billion over the next 10 years, or more than $190 billion over 13 years, starting in 2014–15.
Figures exclude third-party investments in hospitals, colleges and schools.
The Province’s updated commitment to make significant infrastructure investments of about $156 billion over the next 10 years includes:
- $56 billion in public transit;
- $26 billion in highways;
- More than $20 billion in capital grants to hospitals; and
- Almost $16 billion in capital grants to school boards.
Chart 3.3: Economic Impact of the Ontario Government’s Infrastructure Plan
This chart illustrates the long-term economic return resulting from the Province’s 10-year infrastructure plan investments from 2016–17 to 2025–26 and ongoing annual post-plan spending by the government to maintain service levels of assets built during the 10-year plan out to 2050. The impacts are measured in 2015 constant dollars and on a discounted net present value to ensure comparability over the entire 2016 to 2050 period. Ontario real GDP is estimated to increase by up to $925 billion over the long term as a result of total infrastructure spending of $155 billion — which reflects both Ontario’s Infrastructure Plan spending from 2016–17 to 2025–26, as well as ongoing post-plan spending to maintain service levels of the infrastructure assets built during the 10-year plan. This impact estimate assumes businesses are able to obtain the full productivity benefits resulting from the infrastructure plan.
Chart 3.4: Ontario among the Leaders in Venture Capital Investments
This chart shows the total venture capital (VC) invested in Ontario ($1.8 billion) in 2016. It also shows total VC investment for the provinces of Quebec ($1.1 billion) and British Columbia ($478 million), and a roll-up figure for the rest of Canada ($270 million). The chart also includes VC investment for several states from the United States, including Texas ($1.7 billion), Florida
($1.6 billion), Washington ($1.2 billion) and Illinois ($1.2 billion).
Chart 3.5: Reducing Red Tape for Ontario Businesses Is a Key Element of the Government’s Plan to Create Jobs and Grow the Economy
This graphic illustrates the government’s burden reduction initiatives including:
- The government‘s introduction of the Burden Reduction Act, 2017, which makes 150 changes to statutes to save businesses up to $31 million and help them avoid costs of up to $200 million, and
- Ontario’s Red Tape Challenge online consultation tool, which over the next two years will make it easier for businesses to operate in six business sectors: auto parts manufacturing, food processing, financial services, mining, chemical manufacturing and forestry.
In addition, the Canadian Federation of Independent Business (CFIB) has nominated Ontario for the Golden Scissors Award three years in a row, recognizing the efforts the Province has taken to make it an easier place to do business.
Chart 3.6: Ontario’s Exports Expanding to New Markets
The double bar chart shows the share of Ontario’s merchandise exports to the United States, European Union, Hong Kong, Japan, China and Mexico received in 2006 and 2016. In 2006, the share of total exports to each country was: 86.5 per cent to the United States, 6.2 per cent to the European Union, 1.1 per cent to Mexico, 0.7 per cent to China, 0.6 to Japan and 0.3 per cent to Hong Kong. In 2016, the share of total exports to each country was: 80.9 per cent to the United States, 9.7 per cent to the European Union, 1.7 per cent to Mexico, 1.4 per cent to China, 0.9 to Japan, and 0.5 per cent to Hong Kong.
Chart 3.7: Planned Use of Carbon Allowance Proceeds
This graphic illustrates how carbon allowance proceeds will be invested.
Proceeds are projected to be $1.8 billion in 2017–18 and $1.4 billion annually, starting in 2018–19.
Consistent with legislation, all proceeds from the quarterly auctions of emissions allowances will be allocated to initiatives that are reasonably likely to reduce or support the reduction of GHG emissions.
The priority investment areas that will support the reduction of GHG emissions include:
- Supporting homes and businesses with a planned investment of approximately $800 million in 2017–18;
- Promoting electric vehicles with a planned investment of approximately $90 million in 2017–18;
- Engaging governments and strengthening partnerships with a planned investment of approximately $55 million in 2017–18;
- Modernizing transit, active transportation with a planned investment of approximately $420 million in 2017–18;
- Enhancing research and development with a planned investment of approximately $20 million in 2017–18;
- Preserving agriculture, lands and forests with a planned investment of approximately $5 million in 2017–18; and
- Implementing Green Investment Fund initiatives as well as other investments of approximately $410 million in 2017–18.
Planned investments are subject to the availability of carbon allowance proceeds.
Chart 3.8: Retirement Income from the Canada Pension Plan Enhancement
This chart illustrates the amount of future retirement income that a worker will receive from the Canada Pension Plan (CPP) enhancement for a given level of daily CPP contributions.
A worker earning $40,000 annually will contribute $1 per day to receive an extra $3,222 annually in retirement income from the CPP enhancement. This will be in addition to the $9,671 annually that the worker receives from the current CPP.
The benefit calculation assumes that the worker will pay contributions on steady career earnings of $40,000 annually (before tax) for at least 40 years, and that the worker will begin collecting benefits at age 65. All figures are rounded and expressed in 2017 dollars.