Many told us that any US slowdown would now be counterbalanced by the power of emerging economies, such as India and China, yet I have spoken to people in India and China and their economies are also being affected by the US slowdown. In some ways, we are in uncharted waters.
It has been said: “Steer by the light of the stars, not by the light of each passing ship.” What are those stars telling us today? I think you have got to focus heavily on investing in development of human capital and drive hard on innovation as well, which is simply a matter of turning ideas into jobs.
Q What have been the major developments in Ontario since you received your award two years ago?
A Notwithstanding some of the challenges associated with the auto sector, we have emerged as the strongest player in North America on the auto scene, whether in terms of jobs or new investment that we have won. We have just secured the secretariat for the International Cancer Genome Consortium.
We competed against the Wellcome Trust in the UK and the National Health Institute in the US, and we won on the basis of a powerful critical mass of medical expertise that we have developed by recruiting and heavily funding.
In Ontario, we put together C$47m ($46.9m) for cancer research recently, whereas the federal government put in C$250m for the nation as a whole. We have planted our flag in cancer research, planted our flag in the auto sector, and planted our flag in financial services, digital media and the biopharmaceutical area as well – all of which are growth areas, and are where we feel we can have an impact.
Q What kind of impact do you think the slowdown in the US will have on your FDI inflows and how might you offset any negative impact?
A It was said originally that if the US got a cold, Canada got a fever. Now, some people are saying if the US gets a fever, Canada gets a cold. So it is a healthy development, on our part, that we have managed, not withstanding the slowdown from our single biggest export market, to continue to experience strong economic growth and we have balanced our budgets. Almost 60% of FDI coming into Canada comes to Ontario so we feel very bullish in that regard. Obviously we have got to be careful now in terms of taking on new expenditures, given slow economic growth.
Q Are you directing more attention towards attracting investment from the developing economies?
A Yes. It has been too easy for us in a couple of ways. Number one, we have had a low dollar, which has enabled us to shield ourselves from the productivity gains that we have needed to make – we are now making those gains. Somebody once compared us to a hot dog stand outside Yankee stadium: we have got a built-in market.
We understand that, especially given these kinds of cyclical economic challenges that the US is going to go through, we had better heed prudent advice that comes from any financial counsellor: diversify. One of the reasons that I’ll be encouraging Canada to pursue an enhanced economic relationship with the EU is to that end.
The reason that I am here, trying to hustle up some business from the UK, is with a view to establishing stronger ties as well. And it is the same reason why I am pursuing opportunities in Pakistan, Japan, China and India.
Q How much effort do you put into spreading investment around the province, because obviously Toronto would be the big magnet?
A Toronto is the beacon that I use to attract investment from abroad. Once we get people into Ontario then we can better explain to them some of the options that are available in Kitchener and Waterloo, for example, or in Ottawa, or in other parts of the province that have smaller economies. But one of the things I have learned is that when I go to places such as China and India, they do not know Ontario but they do know Toronto. We know Shanghai, we know Beijing, but do we know their province or state? Never.
Q What would you like to see from the federal government that you think would improve the investment climate in Canada?
A We would like them to play a more active role in terms of supporting business and new investment – that would be very important for us. For example, I would love the federal government to have a stronger presence in India and in China. We have a great brand in our flag. I can fly that flag but it is not really mine to fly in the sense that I am the premier of Ontario not the prime minister of the country. I would like to see our federal government pursue a more activist agenda when it comes to soliciting new investment.
Q Would you like to be prime minister at some point?
A [laughs] I am fully absorbed by and satisfied by my job as premier.
Q What would you cite as your most pressing priorities in this term of office, relating to business, investment and trade?
A The economy is our single greatest priority right now – it is the foundation for quality public services. We have got a five-point plan, which speaks to how we are addressing our economic challenges. Number one, to continue to invest heavily in the skills and education of our people; we just rolled out our first plan to help unemployed Ontarians who have recently lost their jobs to get all the jobs going, to supply them with long-term training opportunities. If you look anywhere around the world, normally [such programmes] offer a brief training period to get unemployed people out of the door and into the next available job as opposed to the best available job.
The second thing we are doing is continuing to drive hard on innovation. We have got a $3bn plan now. And we are investing heavily in infrastructure, with a $30bn plan that creates great jobs in the interim and enhances our productivity in the long term.
We are also continuing to reduce our business taxes. The Brookings Institute in Washington, DC, recently put out a document, which was effectively aimed at the US federal government and the Canadian federal government saying that there is a jewel before us and we are not recognising it, and that jewel is the Great Lakes economy. It consists of 12 states and two provinces. If it were a separate country, it would be the world’s second largest economy after the US. We are the fourth strongest player in that market. That is why we are so intent on making sure our corporate income taxes are less than the US as opposed to the rest of the country.
And the last part of our plan involves co-investment strategies designed to attract investments in, for example, clean cars, green technologies, digital media and financial services. We have picked a few spots in our innovation strategy and we are marrying that to our business partnerships.
Q With the other Great Lakes economies, how do you square co-operation with the competition that you would inevitably be in with them? Ontario must be a big competitor to Michigan for auto investment, for example.
A We have got cars parcelling back and forth [between Michigan and Ontario] all the time. Let’s put it this way: if I couldn’t land a new assembly plant, I wouldn’t want it to go to Alabama, I would want it to go to Michigan. Because if it is in Michigan my parts suppliers can help to meet needs there. So we do feed each other.
2003Government of Ontario
1996Ontario Liberal Party