Mischa Kaplan is the CEO of Cardinal Research Group, a boutique advisory and training firm specializing in innovation management and organizational design. He is also a part-time professor in the School of Business at Algonquin College, and a frequent writer and commentator.
With his promise to get Ontario “working again,” Doug Ford’s victory in the provincial election on Jun. 7 sent a wave of cautious relief throughout Ontario’s business community. Although a recent lawsuit from his sister-in-law Renata Ford casts new questions over how successful Ford really was in his previous life as a business manager—a claim he has used to justify his ability to effectively manage a provincial economy worth more than $750 billion—it appears that Ontario’s next premier sincerely sees business success as perhaps the most vital ingredient in future economic growth. Given Kathleen Wynne’s often acrimonious relationship with the business community, a premier who understands the power of the private sector is a welcome change for those who have been voicing alarm over the state of Ontario’s economy.
However, if Ford is honest in his desire to make Ontario “open for business again,” then he must reject simplistic solutions and embrace a strategy centred on innovation, stakeholder cooperation, creativity, and long-term vision. Partisan attempts to paint the next premier as a Trump-style ignoramus notwithstanding, it is obvious that Ford has some level of political acumen, and perhaps more importantly he is backed by a PC caucus composed of highly capable and impressive individuals. Considering this, it is entirely within Ford’s ability to bring drastic and positive change to Ontario’s economy. With that in mind, here are seven ways the new PC government can actually revolutionize Ontario’s private sector and give voters the economic renaissance Ford has promised, beyond the slogans and platitudes.
Accept that the ideology of free market economics does not always apply. As a strong proponent of free-market economics myself, it’s not easy to admit that solutions such as lowering corporate tax rates are not always the best solution. For most corporations in Ontario, provincial corporate tax rates are already relatively low, and the revenue the government earns from corporate taxes helps to fund other initiatives that arguably have a greater impact on economic growth, such as building and replacing physical infrastructure or ensuring that our public education system is sufficiently funded to address the needs of current and future learners who will one day become Ontario’s workforce. Simply cutting corporate taxes because of an ideological objection to taxation is myopic and will likely have a negative long-term impact.
READ MORE: Just how pro-business is Ford, really?
Admit that the process of fostering economic growth is complex, multi-layered, and requires a holistic solution. Most academic experts now believe that innovation networks emerge from a complex interplay between existing knowledge resources, entrepreneurial and community attitudes, public institutions, and private corporations. A government that hopes to jumpstart economic growth must accept that building a dynamic and innovation-centric regional economy requires leveraging and exploiting a wide variety of actors and local networks. It also requires developing a long-term and transparent strategy which is supported by municipal governments, local business communities, and important civil society actors such as community associations and employment-focused non-profits.
Invest in network-building. Perhaps more than anything, the process of economic growth is a result of the strength of networks, be they physical, cultural, economic, or some combination of the three. A government that wants to foster economic development needs to embrace the power of the public sector to help establish foundational components of these networks. This might include committing to a long-term plan to build and replace critical infrastructure, like addressing the significant transit issues that exist in Toronto and Ottawa, or it might include helping to fill gaps in existing networks, as an expansion of airport infrastructure in tech hotbeds like Ottawa and the Kitchener-Waterloo area would achieve. It might also include more intangible initiatives, such as helping to connect local employment hubs with better access to the global workforce, or providing more funding to college and university initiatives that aim to establish or empower knowledge networks in critical areas such as AI, sustainable energy, and healthcare.
Be brave and think big when tackling Ontario’s healthcare beast. Considering that Ford was elected on a promise to cut back government spending by four per cent, making healthcare more efficient and innovative should be a no-brainer. Achieving this, however, is considerably more complex than simply “finding efficiencies.” I will echo Wynne here in reminding Ford that government should be able to efficiently do the things that only a government can do, and in the Ontario case this includes, among other things, managing a massive and inefficient healthcare system that now accounts for roughly half of government spending. There is nothing wrong with finding efficiencies in government, but the solution is not to pursue a broad and ham-fisted scaling-back of government (not that Ford has promised this), but rather to embrace a new way of managing government resources. In the case of healthcare, an issue which has an impact on nearly every facet of public life (including the private sector), the PCs should immediately strike a commission to consider changing how this province pays for and administers healthcare resources. And despite the outcry that will result, all options should be on the table, including developing a hybrid system that gives a bigger role to private sector insurance plans, or expanding the field of nursing to allow registered nurses to perform a wider variety of tasks currently performed only by physicians.
Develop a plan to attract talent. Business groups across Ontario and from a wide variety of sectors are nearly unanimous in their frustrations over being able to attract and retain talent. In fact, in the Ontario Chamber of Commerce’s 2018 Ontario Economic Report (OER) survey, 77 per cent of businesses cited this issue as being the most critical for their survival. Invest Ottawa, a government-funded economic development agency, suggested last year that the Ottawa’s tech sector alone was struggling to fill up to 10,000 positions. The factors explaining this issue are well-known, from an inefficient national immigration system that struggles to recognize foreign qualifications to socio-cultural impediments that make it a challenge for recent immigrants to enter the workforce. A PC government that wishes to effectively address the talent gap in this province should work more closely with business organizations and municipal governments to identify how the provincial government can best address the issue. Admittedly, it is a highly complex issue, but one that should be met with a comprehensive, cooperative, and consistent strategy.
Engage Ontario’s world-class universities. In the 2019 edition of the QS World University Rankings—arguably the most prestigious university ranking table in the world—Canada was again reminded of how significantly our top universities lag behind comparable institutions around the world. Our country’s top two institutions, the University of Toronto and McGill University, fail to even break the top 20 (where they sat prior to 2013). Sadly, two institutions that most Ontarians likely consider examples of global excellence—Western University and Queen’s University—don’t even make the top 200.
The situation reflects a number of trends, only one of which is chronic underfunding. A PC government that wants to unleash the power of the private sector should seriously consider working more closely with Ontario’s top research institutions—U of T, Queen’s, Waterloo, and Western—to identify weaknesses and find solutions. A lofty goal might be to see at least one of these institutions make the global top 10 by 2028 and at least two others in the top 100, an achievement that would attract more highly capable foreign undergraduates, more research dollars, and more world-class graduate students and faculty members. One obvious option might be to encourage some institutions to privatize certain faculties, thus allowing those organizations to charge a greater amount for tuition fees and to pay higher faculty salaries. After all, it’s hard to argue with the idea that America’s private universities, which make up half of the 20 top-ranked institutions in the world, have a model that appears to be working well in terms of building a global reputation. Many of these top institutions, from Stanford in Silicon Valley to MIT in Boston—also play a vital role in local and regional economic development and corporate innovation.
Modernize and champion the power of apprenticeship. In addition to addressing the relative underperformance of Ontario’s top universities, Ford should use his mandate to drastically amend the province’s apprenticeship system, perhaps following in the example of highly effective and well-established apprenticeship programs in places like Germany or Switzerland. A new apprenticeship system would address Ontario’s profound lack of tradespeople while also providing a financially viable solution for young people who are not interested in university or for older individuals looking to change careers. Also, by amending Ontario’s apprenticeship system to include more skills not traditionally considered “trades,” like network administration or cyber security management, a new system has the potential to solve critical job shortages in other areas that have proven to be crucial for innovation and economic development.
Economic platitudes are great for winning elections, but developing government policies to meaningfully transform the economic prospects of an economy as large as Ontario is a very different story. Ford will need a coherent, holistic, and long-term plan to undo years of Liberal mismanagement and jumpstart the economic renaissance he has promised voters. Granted, the solutions offered here represent a drastic shift away from the status quo, and implementing a plan around these solutions will not be easy. But if Ford is truly serious about fostering meaningful economic growth, then he will need to embrace a radical plan to get there.