Signs of the times in Ontario
Never mind Doug Ford’s economic roadmap. Seen his new road signs? “Welcome to Ontario — Open for Business.”
The promised new slogan is coming soon to our border crossings, pointing the way to provincial prosperity.
It began with bumper sticker politics, when Ford boldly declared himself leader of Ontario’s first-ever “Government for the People.” Now, it culminates with road signs that shall be our shortcut to economic success.
“Open for Business” will surely make American visitors feel at home, for it has a familiar ring: Economic titans such as Arizona, Florida, Maine, Maryland, Virginia, West Virginia and Wisconsin adopted that entrepreneurial (if unoriginal credo) years ago.
For better or for worse. A year after deploying “Open for Business” signage to jumpstart West Virginia’s economy, thengovernor Joe Manchin conceded the slogan had sputtered.
“Criticism has been rampant ever since,” noted the West Virginian Times in a cutting article about the “highly unpopular slogan.” Voters dumped the phrase in a subsequent government-organized poll. Maryland didn’t much love it either. A columnist in the Baltimore Sun derided the slogan as simply “cheesy,” asking readers what message the state was sending to visitors: “Further reduce industrial regulation? Hand out massive tax breaks? Is that what we’re all about? And if we’re open for business now, does that mean we were closed before?”
Good questions for Ontarians, too. In our premier’s defence, he never made a secret of the slogan. And in fairness to Ford, the signage isn’t empty symbolism.
The broad outlines of his roadmap were visible to voters when he won the last election, promising to freeze the minimum wage, erect those road signs, and tear down labour laws. While many economists and the occasional columnist might have criticized it as a race to the bottom — where bottom-feeding states such as Maine, West Virginia and Wisconsin long ago proclaimed themselves “Open for Business” — Ford won fair and square. And many are cheering his progress, not least the business sector. Ford’s friends in the Ontario Chamber of Commerce gave him a standing ovation last week for a speech sprinkled with partisan attacks against his political enemies, and laden with offerings for small business:
Cutting red tape, cutting taxes, cutting unions down to size, cutting out workplace reforms enacted by the defeated Liberal government a year ago. And clawing back a scheduled increase in the minimum wage to $15 next year.
As the Tories like to say, “Promise made, promise kept.”
But here’s one promise Ford never made, because he didn’t have to — because the Liberals did it for him: Last year, with an election looming, thenpremier Kathleen Wynne tried to calm small business critics by offering a quid pro quo for her labour reforms.
To take the edge of the minimum wage hike, the Liberal government handed a handsome tax cut to small business, along with hiring subsidies for young workers. In their November economic statement a year ago, they reduced the small business tax rate from 4.5 per cent to 3.5 per cent (that’s a 22-per-cent decrease) on the first $500,000 in corporate income — compared to 8 per cent in Quebec. They also announced a $1,000 rebate for smaller employers hiring young people, with another $1,000 payoff after six months.
The rationale for those giveaways was always more electoral than economical. Liberals, like their NDP and PC counterparts, can’t resist wooing small businesses and “family businesses” as the human face of good-guy capitalism, the poster child of entrepreneurialism.
Nothing against the little guy — small can be beautiful — but economists will tell you what politicians won’t: Small business subsidies don’t make sense if they merely incentivize firms to remain small rather than scale up to capture market share and boost overall economic growth.
Now, the dubious rationale behind those tax breaks is dated. With the Ford government dismantling many of those labour reforms — two days of paid sick leave, scheduling protections, equal pay for temporary workers — why are they sticking with those compensating tax cuts and subsidies? If we are back to the status quo ante, the quid pro quo no longer adds up.
Next year’s $15 minimum wage increase has been declawed, but don’t expect the Progressive Conservatives to claw back those old Liberal tax cuts, or scale back those compensating subsidies. In Ford’s Ontario, the road signs only point in one direction:
Open for Business. Just like all those U.S. states racing to the bottom.