Fraser Institute study suggests Ontario could learn from MichiganClick image to enlarge

A new study from The Fraser Institute says Ontario’s manufacturing sector could take a growth lesson from its close U.S. neighbour Michigan.

The Fraser Institute singles out southwestern Ontario, the province’s – and the country’s – manufacturing heartland, which it says has been badly battered in recent years. The Institute points out that while Ontario’s manufacturing sector has been suffering, some other manufacturing-intensive jurisdictions have been thriving, including Michigan.

“While Ontario’s manufacturing sector has largely languished (despite some recent positive developments), Michigan’s has rebounded sharply from the nasty 2008/09 recession,” says The Fraser Institute. “The comparison invites a closer look.”

While prior to 2011 Ontario outperformed Michigan on key economic indicators, in 2011 the pattern started reversing, and since then Michigan’s economy and manufacturing sector have outperformed Ontario’s.

The full study is worth a look, but in a few words, there are three things Michigan has done that Ontario should consider:

  • corporate income tax reform;
  • reduced government spending; and
  • “right-to-work” legislation.

At the same time, the study says, Ontario raised personal income taxes, suspended a planned corporate tax reduction and significantly increased labour regulations, including a higher minimum wage.

“Michigan’s economic turnaround has coincided with its comprehensive pro-growth policy reform initiatives,” says The Fraser Institute. “The [Ontario] Ford government should consider similar reforms—and quickly.”

You can read more here.

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