This presentation covers both economic issues facing Ontario and government taxation and spending

1. 2018 ONTARIO ELECTION
PAUL YOUNG CPA, CGA
FEBRUARY 6, 2018

2. SUMMARY
• Allot will be said about GDP as part of the election build in June 2018. The
problem is major areas will not be discussed by Wynne as it would paint a
picture that shows Wynne was poor steward of the Ontario Economy.
• Economies are driven by many factors including capital investment and
consumer spending. Government only role is to set policies. Wynne and
McGuinty policies have led to implementation of carbon pricing, labor
reforms, hikes to hydro rates, longer regulatory approval process for natural
resources, killing of the east-west pipelines, etc.
• Both McGuinty and Wynne continue to spend beyond their means in terms of
their fiscal management cycle. The reality is businesses get scared when
faced with more taxes and/or more regulations.

3. AGENDA
• Overall Manufacturing
• Jobs and Wages
• Automotive Sector
• Class 8 Truck
• Steel Industry
• Food Processing
• Ontario Mining Sector
• Ontario Deficit and Debt

4. OVERALL MANUFACTURING SECTOR -
ONTARIO
Source – Stats Canada
• Hydro rates have cost 75,000
manufacturing jobs over the past few
years -
http://business.financialpost.com/opini
on/75000-manufacturing-jobs-lost-
thats-the-price-of-ontarios-electricity-
disaster
• Carbon taxes do not support GDP
growth as matter fact reduce GDP -
http://business.financialpost.com/com
modities/energy/ottawas-carbon-tax-
plan-to-shrink-economy-by-3-billion-
hurt-loonie-in-2018-study
• Ontario has seen reduced productivity
due to poorly constructed tax policies,
labor reforms, regulatory filing issues,
etc -
https://www.competeprosper.ca/blog/f
ive-things-to-know-about-ontarios-
manufacturing-exports
• Ontario was economic engine of Canada

5. EMPLOYMENT – F/T VS P/T
Source - http://www.statcan.gc.ca/daily-quotidien/180105/t002a-eng.htm or http://www.statcan.gc.ca/daily-
quotidien/170106/dq170106a-eng.htm or http://www.statcan.gc.ca/daily-quotidien/160108/dq160108a-
eng.htm
• Full-Time jobs as % of employment are down since the LPC took office in November 2015
• Ontario has more people working P/T as % of employment since LPC took office in November
2015
• Bill Morneau told people get used to job churning - http://www.cbc.ca/radio/thecurrent/the-
current-for-october-25-2016-1.3818896/are-short-term-jobs-the-new-normal-1.3818898
• Wages have barely grown over the past decade for Ontario -
http://business.financialpost.com/news/economy/canadian-median-income-growth-sluggish-
over-past-10-years-statscan-figures-show

6. AUTOMOTIVE SECTOR
Source -
http://www.gbm.scotiabank.com/scpt/gbm/scotiaeconomics63/GAR_2018-
01-30.pdf
Issues:
• Labour Laws – Magna is at the
tipping point in terms of
expanding their operations in
Ontario -
https://www.bnn.ca/magna-
takes-aim-at-wynne-government-
s-new-labour-laws-1.810174
• CAMI came within days of closing.
CAMI has sited carbon tax, hydro
rates, other taxes are too high in
Ontario -
http://business.financialpost.com/
transportation/autos/gm-strike
• Wynne has given handouts to
automotive through her jobs and
prosperity funds, but those
handouts in many cases just led to
current jobs being kept.
• Trump’s content rules on NAFTA
could also impact the automotive
sector in Ontario

7. ONTARIO / CLASS 8 TRUCKS
Source – The Trucker
• There are small trailer plants, but
those plants are very small in terms
of size
• Ontario used to produced Class 8
Trucks, but plant closures have
happen like the following:
• Sterling Trucks -
http://www.stthomastimesjourn
al.com/2008/10/14/sterling-
truck-plant-to-close
• Navistar Trucks -
https://kitchener.ctvnews.ca/na
vistar-closing-truck-plant-in-
chatham-ont-1.678209

8. STEEL PRODUCTION / ONTARIO
Source – World Steel Association
• Wynne implemented carbon tax
ignoring any economic impact study
- http://pricecarbonnow.org/effect-
carbon-pricing-competitiveness-
industries (Steel is carbon based
business
• Steel has modernized over the years
due to changes in manufacturing
processes
• McGuinty made promises on Stelco
Pensions -
https://www.thespec.com/news-
story/2190466-u-s-steel-pensions-
loans-safe-mcguinty-says/
• Liberals never grasp cost pressures
facing large business as such many
large business either scale back
operations or close up all together in
Ontario

9. ONTARIO FOOD PROCESSING SECTOR
Source -
https://www.mentorworks.ca/blog/market-
trends/ontario-food-and-beverage-industry-
Today, approximately 3,800 Ontario
food and beverage processing
companies provide crucial resources
to both local and international
consumers. The province continues to
be an ideal location for business
owners in the food and beverage
industry based on access to natural
resources, innovation, and skilled
labour. In 2016, Ontario’s agriculture
sector increased its total output
by 3% and contributed over $40
billion towards the provincial
economy. However, there is still room
to improve the sectors rate of growth
and development throughout 2017.
Food and Beverage Ontario (FBO)
recently released its annual report
underlining some of the major trends
or areas of concern within the sector.
The top four challenges food and
beverage processing businesses face,
include:
• Workforce development and access
to skilled labour;
• Provincial electricity costs;
• Regulatory issues; and
• Implementation of growth
strategies.

10. ONTARIO MINING SECTOR
Source -
• 9 mine sites operating in Ontario
• Nickel, gold, copper, zinc and platinum group metals
• Diamonds, salt, gypsum, talc, calcium carbonate, nepheline
syenite and other industrial minerals
• Ontario is the largest producer in Canada of gold, platinum group
metals and nickel, and the second largest producer of copper.
The province is also a major producer of salt and structural
materials.
• Mining benefits all areas of the province, providing a broad scope
of employment and entrepreneurial opportunities.
• Ontario is one of the safest mining jurisdictions in the world and
mining is one of the safest industries in Ontario, achieving a 96%
improvement in lost time injury frequency over the past 30
years.
• Value of mineral production in Ontario was $10.8 billion in 2015.
See Ontario mineral production highlights for 2015 and read
about the economic contribution of mining to the province.
• 90% of the mining GDP stays inside Ontario.
• 78,000 mineral production employees include direct employment
of 16,100.
• The opposite can be said
of two of Canada’s other
large jurisdictions —
British Columbia and
Ontario — which dropped
in this year’s rankings.
Internationally, Ontario
places 18th (down three
spots from last year) and
B.C. ranks 27th, more than
ten places lower than its
2015 position (18th).
http://www.mining.com/c
anadas-saskatchewan-
manitoba-worlds-new-
top-mining-destinations/

11. ONTARIO DEBT / DEFICIT
• Ontario’s budget watchdog says that the province’s deficit will be $2.6 billion in 2017-18,
despite a Liberal government pledge to balance the books by then. The Financial
Accountability Office released its economic and fiscal outlook today, saying that beyond
that fiscal year the deficit will deteriorate further to $3.7 billion in 2020-21.
• Ontario’s Liberal government is dipping into its reserve fund to help balance the budget
for the next two years, ahead of the next provincial election.
• An accounting dispute with the auditor general over how pension assets should appear
on the books is adding $2.2 billion to the deficit this fiscal year, but the government
insists it will reach balance by its self-imposed deadline of 2017-18.
• Ontario universities face several financial pressures, among them pension solvency
deficits, according to a new commentary by debt rating service DBRS Ltd. (who is on the
hook for the pension shortfall?

12. ONTARIO – KATHLEEN
WYNNE AND DALTON
MCGUINTY ERA – JANUARY
2018
PAUL YOUNG CPA, CGA
JANUARY 27, 2018

13. GOVERNMENT REVENUE/ONTARIO
Source – Government of Ontario, Stats Canada and Federal Government of Cana
Commentary and Analysis
• McGuinty introduced harmonized sales tax
• McGuinty introduced Ontario Health Premium tax
• Ontario is recipient of equalization payments
• Wynne is selling of assets, i.e. Ontario Power
Generation
• Wynne is introducing carbon taxes / 2017
• McGuinty cut corporate tax rates
• Ontario loss over 300,000 manufacturing jobs
• Ontario growing public sector jobs greater than private
sector

14. GOVERNMENT SPENDING/ONTARIO
Source – Government of Ontario, Stats Canada and Federal Government of Cana
% of Expenses /Spending
Analysis Commentary
• Harris spent close to 40% on healthcare as compare to McGuinty
and Wynne that spend approximately 38% on healthcare
• LHINs and CCAC were created but have done little in terms of
improving wait times and/or controlling of costs
• Education received more money, but we have more grads having
hard time finding jobs. Meanwhile. Ontario has significant skills
gas that could influence FDI
• Wynne pledge to bring the debt down to 26% of GDP. If Wynne
were to bring the debt down then should need to reduced the
debt by $10B per year.
• Drummond report was virtually ignored and it was succinct in
terms of Ontario has spending problem. Ontario is spending from
18.5 to 17.5% of GDP of government and only taking in 16.8% in
revenue. More taxation is not the answer

15. ONTARIO COMPETITIVENESS
• Source – Stats Canada

16. CAP AND TRADE
• http://www.torontosun.com/2017/04/11/wynnes-cap-and-trade-
First, cap and trade doesn’t just impact the cost of home heating fuel and gasoline, but
almost all consumer products. Food, for example, is grown and transported to market
using fossil fuel energy, so when the price of gas goes up due to cap and trade, so does
the price of food. So does the price of fertilizer.
The second problem is that Wynne’s government was 34% low in predicting monthly
natural gas bills for average homeowners would rise by $5.
The average price increase since Jan. 1 has been $6.70 per month, according to natural
gas suppliers, while many homeowners report their bills are rising faster than that, as
the actual increase depends on the amount of natural gas a household consumes.
Meanwhile, the Wynne government refuses to break out the new cost of cap and trade
on home heating bills, although it tells hydro ratepayers in every bill, down to the
penny, how much its 8% rebate on the provincial portion of the HST is saving them.
Toronto Sun – Lorrie Goldstein – April 11, 2017

17. KEY AREAS OF WASTE
• P3 Costs $8B (source: http://www.thestar.com/news/queenspark/2014/12/09/publicprivate_financing_cost_ontario_taxpayers_8_billion_auditor_says.html)
• Equalization $10B (http://www.fin.gc.ca/fedprov/mtp-eng.asp#Ontario)
• Gas Plant Cancellation $1.1B (http://www.thestar.com/news/canada/2013/10/08/liberals_power_plant_cancellations_cost_11b_auditor_general.html)
• eHealth $1B (http://www.cbc.ca/news/canada/toronto/ehealth-scandal-a-1b-waste-auditor-1.808640)
• Selling excess power $1B/year http://kitchener.ctvnews.ca/ontario-paid-1-billion-to-export-surplus-power-in-2013-ndp-say-1.1647299 - 2013 amount
only)
• Wind Subsidies $1B/year (http://www.netnewsledger.com/2014/03/05/ontario-wind-energy-plans-costing-1-billion-annually/)
• Ontario capital Expenditures $11.8B (http://www.fin.gov.on.ca/en/budget/paccts/2014/)
• Ontario shares of gas tax $750M (http://www.infrastructure.gc.ca/alt-format/pdf/GTF-FTE-20140905-eng.pdf)
• Municipalities Capital spending $6B (http://www.amo.on.ca/Advocacy.aspx?searchtext=capital&searchmode=exactphrase&date=0;&issue=0;&category=0;)
• Wynne’s AIT Issues - http://www.cbc.ca/news/canada/saskatchewan/saskatchewan-premier-brad-wall-concerned-about-ontario-quebec-position-on-
energy-east-1.2848930.
• Oliver and Wynne barb over infrastructure - http://www.canadianmanufacturing.com/procurement/ontario-ottawa-trade-barbs-infrastructure-funding-plan-
142206/
• Broken Arbitration system - http://www.lfpress.com/2014/02/22/small-municipalities-across-ontario-crushed-by-soaring-opp-policing-costs - Wynne was
McGuinty’s right hand person - https://www.theglobeandmail.com/news/politics/mcguinty-defends-85-per-cent-pay-hike-for-opp-in-
2014/article1360155/

18. DRUMMOND REPORT
• Source - http://www.cbc.ca/news/canada/toronto/drummond-report-on-ontario-calls-for-cutbacks-1.1138568
The Ontario government must curtail its spending with the kind of cuts not seen since
the Mike Harris years, according to a report by former TD Bank chief economist Don
Drummond.
Released Wednesday, Drummond’s report calls for extensive spending reductions and
warns that without his recommended belt-tightening, the province will face a crippling
$30-billion deficit by 2017-18.
Drummond warns that failing to follow such severe austerity measures could
cause Ontario’s debt, which currently stands at $215 billion, to balloon to more than
$411 billion in five years.
February 15, 2012

19. MOODYS / SPENDING ONTARIO
• https://www.thestar.com/business/economy/2015/02/23/moodys-says-ontario-has-a-

20. EDUCATION
• https://www.thestar.com/yourtoronto/education/2017/05/04/121-ontario-schools-slated-to-close-report.html

21. EDUCATION FUNDING
Source – Government of
2015-2016A 2016-2017A 2017-2018
25.1 25.7 26.5
% change 2.4% 1.6%
• Ontario Government includes
the pension adjustment that AG
disputes -
https://www.thestar.com/news
/queenspark/2017/02/13/pens
ions-are-an-asset-expert-
panel-concludes.html
• Rural school closing continue to happen due to declining enrolment
• Students are failing in areas like math and sciences -
https://www.thestar.com/news/canada/2017/08/30/math-scores-flat-falling-among-ontario-
elementary-students.html
• Government has allow school boards to handle pay increases and/or other costs -
https://tvo.org/article/current-affairs/the-next-ontario/ontarios-school-boards-are-a-mess-
we-made

22. EDUCATION / CUTS
• https://www.thestar.com/yourtoronto/education/2017/05/04/121-ontario-schools-slated-to-close-report.html
http://www.thepeterboroughexaminer.com/2012/06/14/catholic-school-board-laying-off-10-library-support-specialists
http://www.lfpress.com/2013/04/23/london-district-catholic-school-board-says-declining-enrolment-behind-reductions
http://www.newswire.ca/en/story/141683/sixty-percent-of-school-boards-to-cut-jobs-more-expected-liberal-failure-to-fix-faulty-
funding-formula-creating-another-year-of-crisis
http://metronews.ca/news/toronto/260938/toronto-and-peel-school-boards-prepare-for-biggest-cuts-since-harris-years/
http://campaignforpubliceducation.ca/?p=1416
http://www.therecord.com/news-story/2594137-catholic-school-board-cuts-20-full-time-jobs/
http://weareontario.ca/index.php/windsor-essex-catholic-school-board-cuts-11-2-million/

23. ONTARIO HEALTHCARE
Source – Government of Canada and Ontario
2015-
2016
2016-
2017
2017-
2018
$13,095 $13,899 $14,36
2
Change 6.1% 3.3%
Federal Transfer for Healthcare
2015-
2016
2016-
2017
2017-
2018
$51,011 $52,206 $53,75
3
Change 2.3% 3.0
Ontario Transfers to Healthcare
• Hospital funding issues - http://healthydebate.ca/2015/02/topic/politics-of-health-
care/philanthropy
• Hospital costs - http://www.lfpress.com/2017/03/21/hydro-london-health-sciences-centre-
electricity-use-falls-but-costs-up-30-per-cent
• Funding - https://www.thestar.com/life/health_wellness/2015/04/22/budget-will-see-tough-
decisions-in-health-care.html
• LHINs and CCAC - https://www.thestar.com/life/health_wellness/2015/11/06/community-care-
access-centres-likely-to-be-dismantled.html

24. HEALTHCARE
• PBO - http://cupe.ca/canadas-health-care-system-about-lose-36-
billion. Yet nothing is said on the waste with healthcare, why?
http://www.nugget.ca/2015/03/31/workers-rally-for-new-health-
accord. It seems like unions are complaining at funding from the
Feds, but say nothing on the LHINs or CCAC -
http://blogs.windsorstar.com/opinion/the-stars-view-time-to-
audit-ccacs-and-the-lhins or revenue like Ontario Health Premium
that does not go to healthcare -
http://www.fin.gov.on.ca/en/budget/paccts/2014/14_cfs.html#ope
rations
•

25. ARBITRATION
• Ontario has never fixed its arbitration process -
http://business.financialpost.com/opinion/the-ontario-laws-that-
force-cities-to-keep-spending-more-on-unionized-workers
• Firefighting Costs
• http://www.theobserver.ca/2015/10/29/confusion-swirls-over-
impact-of-fire-service-cutbacks or
http://www.owensoundsuntimes.com/2017/01/17/owen-sound-
aims-to-stem-fire-costs

26. JOBS AND PROSPERITY FUND
Source -
http://www.auditor.on.ca/en/content/news/15_newsreleases
/2015news_3.04.pdf

27. HYDRO RATES

28. FAIR HYDRO PLAN
Liberal supporter,
• So, Fraser Institute is wrong, right? So, is the AG report wrong as well?
http://www.auditor.on.ca/en/content/news/11_newsreleases/2011news_3.03.pdf
•
• Ontario AG http://www.auditor.on.ca/en/content/specialreports/specialreports/FairHydroPlan_en.pdf or
http://www.cbc.ca/news/canada/toronto/ontario-hydro-auditor-general-report-fair-hydro-plan-wynne-
1.4358168
• I have done my own work through reviewing different information and high hydro rates have driven out business -
https://www.slideshare.net/paulyoungcga/failed-clean-energy-policies-ontario-wynne-and-mcguinty
• Ontario businesses are at the breaking point with the Liberals as they have seen carbon taxation, elimination of EHT
threshold, high hydro rates, planned hikes to minimum wage, etc. Business can adjust to government policies, but
not when they continue to be slammed by Wynne with bad after bad policy!
• Jobs replaced by manufacturing have been lower in pay, like retail/transportation/etc.
https://beta.theglobeandmail.com/report-on-business/economy/census-2016-statscan-
income/article36242392/?ref=http://www.theglobeandmail.com&

29. HYDRO RATES –
• http://www.torontosun.com/2017/02/24/liberals-botched-energy-
plan-costs-us-all

30. MISTAKE THAT BROKE HYDRO
• https://www.pressreader.com/canada/national-post-latest-
edition/20161124/281681139477783
“Your new government will restrain program spending to
reduce Ontario’s debt-to-GDP ratio, while recommitting
itself to eliminating the deficit by 2017-18.
And after that, it will restrict overall spending increases to
1% below GDP growth until the province’s debt-to-GDP ratio
returns to the pre-recession level of 27%.
Sources:
http://tvo.org/transcript/2098464/video/programs/the-
agenda-with-steve-paikin/kathleen-wynne-ontarios-25th-
premier or http://www.ontla.on.ca/web/house-
proceedings/house_detail.do?Date=2013-02-19

31. MINING INVESTMENT – 2016 RANKING
Source - http://www.mining.com/canadas-saskatchewan-manitoba-worlds-new-top-
mining-destinations/
Ontario rank 18th a
fall of three spots
from 2015

32. AUTOMOTIVE SECTOR / ONTARIO
Source - https://apma.ca/auto-sector-can-drive-ontarios-economy-
forward-again/
Article did not mentioned the
following areas
• Carbon Taxation
• Elimination of the EHT
threshold for large
payrolls
• Hikes planned for CPP
• Hikes to property tax

33. ONTARIO 2015

34. SENSITIVITY ANALYSIS - ONTARIO
• Ontario would need to both increases in revenue as well as cuts to spending. This would mean
running surpluses between $5B to 8.5B for five years to bring the debt to gdp to 27%.

35. • Dear LPC or NDP supporter,
• I also work in fortune 500 for many years and that is also not the case in terms of adding 100K salaried
employees. In fact there has been cuts to high salary as part slashing middle to senior management positions
with firms.
• The bulk of the business are small to medium size as such they do not pay 100K salaries very often as they
cannot afford the costs.
• The government goes by its own drum as such does not necessarily align their pay scales with the private
sector.
• Public Sector workers on average are paid 13% more than the private sector. The compensation earned by
government workers is the issue with me! http://www.cfib-fcei.ca/english/article/6301-a-closer-look-at-
private-public-sector-wage-gaps.html
• There many reason why system is broke:
• arbitration is not align with ability to pay
• Government pay grid is out align with private sector
• pension funding is not sustainable
• Government does not operate in competitive environment as such there is no pressure on wages other than internal

36. HOMECARE
• Wynne created the mess through focusing money on new departments.
Wynne has no clue what it takes to deliver dollars to patients!
• https://www.slideshare.net/paulyoungcga/healthcare-crisis-in-canada-
january-2018
• AG – LHINs and CCAC -
https://www.theglobeandmail.com/news/national/auditor-general-
finds-wide-variation-in-home-care-supports-across-

37. WYNNE AND THE ECONOMY
• How about the fact your government has lost 75,000 mfg jobs?
• http://business.financialpost.com/opinion/75000-manufacturing-jobs-lost-thats-
the-price-of-ontarios-electricity-disaster
• How come incomes have grown only 3.8% for 10 years?
• http://www.cbc.ca/news/politics/statistics-canada-census-2016-income-
hightlights-1.4287179

38. WYNNE FAILED POLICIES
• http://www.cbc.ca/news/canada/toronto/kathleen-wynne-ontario-election-2018-1.4455076?cmp=rss
• “More to come, right?”
• Minimum Wage will see job losses – https://globalnews.ca/news/3736740/ontario-minimum-wage-hike-job-losses/
• Hydro Rates are going up after 2019 - http://business.financialpost.com/opinion/a-whole-new-way-screw-up-hydro-is-underway-in-ontario-and-b-c
• Hospital continue to cut - https://www.baytoday.ca/local-news/hospital-to-cut-another-30-40-jobs-560905
• School closings - https://www.thestar.com/yourtoronto/education/2017/05/04/121-ontario-schools-slated-to-close-report.html
• http://www.cbc.ca/news/canada/thunder-bay/thunder-bay-ring-of-fire-1.4442435 - Ring of fire is moving very slowly, especially since the Liberals kept saying
they would develop the Ring of Fire
• Rate payers - http://www.cbc.ca/news/canada/toronto/ineligible-power-generator-costs-ontario-auditor-general-1.4435954
• http://www.ourmidland.ca/news/police-service/yet-another-police-service-finds-no-savings-switching-opp-2017-05-18 - I bet the OPP gets raises in 2018 as
way to support the Liberals
• More money handout to companies - https://betakit.com/ontario-investing-up-to-5-million-in-think-research-to-create-228-jobs-in-toronto/
• More shifting to government jobs from the private sector - http://www.cbc.ca/news/canada/ottawa/ontario-home-care-ccac-lhin-1.4082732
• Government control of pot - http://www.cbc.ca/news/canada/toronto/province-cannabis-plan-1.4280484
• I bet there will be more carrots dangles to voters for Wynne to buy more votes from the People of Ontario. Source -
https://www.slideshare.net/paulyoungcga/issues-facing-ontario-2018-election

39. SUMMARY
• Ontario is less competitive in 2017 than it was when Liberals took power in 2003
• Ontario has some highest hydro rates in North America
• Carbon taxation does not reduce emissions, but does increase overall costs to consumers
• Ontario continues to drag its feet when it comes to developing natural resources, like
Chromite or Lithium or other areas
• Ontario productivity has worsen due to fact many companies are starting to make
investment in other jurisdiction
• Ontario debt is highest of any sovereign place in the world
• Systemic issues with real estate have not been addressed all levels of government as well
as the private sector

40. WHAT’S NEXT
• Ontario – area of focus
• Low dollar has insulated Ontario from global pressures
• High hydro rates are impacting business investment -
http://www.occ.ca/portfolio/empowering-ontario/
• Red Tape is delay projects (http://business.financialpost.com/news/mining/what-
ontario-needs-to-unlock-ring-of-fires-mineral-wealth-is-a-marshall-plan
• Broken arbitration system (http://www.cfib-fcei.ca/english/article/6069-
government-wages.html
• Carbon taxation (https://www.thestar.com/business/2016/10/04/how-trudeaus-
carbon-price-plan-will-affect-five-canadian-industries.html or
• Innovation spending (http://www.theglobeandmail.com/report-on-
business/economy/canada-falling-behind-in-research-and-
development/article21605656/)
• Slow global economy
(http://www.gbm.scotiabank.com/English/bns_econ/forecast.pdf
• Ontario business investment - http://www.statcan.gc.ca/daily-
quotidien/160510/dq160510a-eng.pdf
• Ontario heads to another election in 2018
• Issues at hand
• Hydro Rates
• Economy
• Delivery of program spending
• Government debt
• Taxation/carbon tax