Recession: a self-fulfilling prophecy?

March 30, 2009

With its recent budget the McGuinty government seems to have finally given up on its attempt to recreate the just society of John Robarts and Bill Davis.  This budget bows to the masters of Bay Street and tilts the tax system dramatically in favour of the business community.  Gone are the steps to end child poverty and provide public day-care.  Last week McGuinty even contradicted Finance Minister Dwight Duncan and offered to cancel a scheduled increase to the minimum wage if business needed it.

The Harmonized Sales Tax seems to shift the burden to the consumer. Corporate taxes drop significantly as well.  It must be hard to accept that Jim Flaherty, McGuinty’s cordial adversary in Ottawa, might have been right in saying that Ontario was a terrible place to invest, but McGuinty has swallowed his principles and tried again to do the right thing.  That was his rationale for the Health Care Tax. He recovered from it primarily because of a weak and fractured opposition. And now he grimly forges ahead in an attempt to slow the hemorrhage in the industrial sector.  Apart from Bob Runciman’s tepid criticisms, it seems as though Ontario approves of this necessary action.

So the new Ontario is a land of lowered expectations.  A Toronto Star article last week mentioned that the budget even contains a provision to allow retirees to return to work part-time and still accumulate pension credit.

22,000 federally funded child care spaces in the province will dry up because the Harper government has not come through with the funds for the next phase of the program.  I guess Flaherty’s rhetoric about shovel-ready programs doesn’t take the needs of kids and young parents into account, even if the 63 million dollars to extend the program would keep 4000 child care workers off the unemployment rolls and provide an essential service to thousands of young families.

The Ontario reaction is interesting:  when the Harper government tried to cut cultural funding in Quebec last summer, the move created a province-wide outcry and most likely cost the Conservative Party a majority in the fall election.  This led to the free-spending budget of January and a significant dilution of the Conservative brand.  On the other hand, when child care spaces evaporate in Ontario, we get one passing reference in a Star Sunday editorial for a similar cutback.  What gives?

In Ontario these days it’s all about saving jobs in the auto industry.  Nothing else seems worthy of our attention.

Lee Iacocca moved to the bankrupt Chrysler in the early 1980’s and turned the corporation around with the very designs for which he was fired at Ford.  The efficient Chrysler mini-van appeared in 1983;  it filled a need and restored Chrysler’s fortunes.

So what new model has president Rick Wagoner brought out to rescue GM? Their hopes rest on the 2009 Camaro, a lightning-fast, V8 gas guzzler which can burn its back tires off in an eyeblink.  No wonder Obama is yelling for Wagoner’s resignation.  Well, Chrysler and Ford have also brought back their pony cars. Considerable engineering effort has gone into each to make the cars faster than the originals were in the early seventies.

I don’t think we need any more two-door, V8 cars on the road, but I watched with interest all last summer how young and middle-aged males stopped to drool over the row of Dodge Challengers arrayed in front of Falls Chrysler.

Does anyone remember gas prices above $1.40/ litre last summer?  Is there a perverse satisfaction in running the last cup of gasoline through the carburetor of a pulsating V8 engine?

Obama has made no secret of his interest in GM’s Volt, a mass-market electric vehicle set for introduction in 2010.  At least that’s a sensible goal for the auto industry.

In Canada the Department of Transport has no similar interest in a home-grown product, the ZENN electric car built in St. Jerome, Quebec, but sold only in the United States, Europe and Mexico because owners can’t certify the vehicles for street use anywhere but in a couple of communities in British Columbia where municipal governments have found a loophole to allow for their registration.

How many urban planners in the 1960’s could forsee networks of bicycle paths in their cities?  Yet the paths happened in response to demand.  Neighbourhood vehicles deserve their niche, and we as voters can make the infrastructure changes happen in just the manner we made the bicycle paths appear.

I dread seeing my tax dollars funneled into a company which builds Camaros.  A company like Everbrite Solar, on the other hand, might have some potential.  Their planned $500 million solar panel factory in Kingston should generate 1200 green-collar jobs in the area and significant research in renewable energy at nearby Queen’s University.  If our politicians can get their blinders off and use stimulus funds wisely, Ontario may come out of the recession with a renewed lease on life as Canada’s heartland.


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