Ontario is in the midst of a provincial election and the campaign began with a flourish right after Labour Day when Dalton McGuinty, the Liberal premier, announced that, if re-elected, his party would create a new statutory holiday called Family Day.
It would fall on the third Monday in February, as it does in Alberta, Saskatchewan and British Columbia, the other provinces that celebrate Family Day, and would create a mid-winter break between New Year's and Easter.
There is no question that McGuinty is on to something here. By late February and early March each year, many of us are suffering from the blahs and the medical profession has even come up with a name for the problem. It's called seasonal affective disorder or, appropriately enough, SADS.
McGuinty's announcement earned the party some big headlines, but there is no evidence that it has lit up the electorate and I suspect that's because in communities across the province people are more worried about work than holidays.
In cities and towns from Cornwall to Windsor, manufacturing plants have been closing and workers have been losing jobs.
In many cases, those industries represented the economic bedrock of their communities. They provided good jobs and created prosperity for decades, even generations. And they are now disappearing at an alarming rate.
According to Ian Howcroft, Ontario vice-president of the Canadian Manufacturers and Exporters, the province has lost 180,000 high-paid and coveted manufacturing positions over the past three years, or 12 per cent of total employment in the sector.
A number of things have contributed to the erosion. Higher energy prices are driving up the cost of manufacturing.
Strength in the commodity sector has pushed the Canadian dollar to over 90 cents US. That makes our exports more expensive and therefore less competitive south of the border.
As a result, manufacturers have been moving production to southeast Asia, Mexico and elsewhere to earn a better return on investment.
In these days of global markets, there isn't much any government can do to counter some of these trends. Political leaders cannot tinker with exchange rates or energy prices.
However, they do have some tools to work with.
One is the tax system. They can fine-tune the taxes on business and investment in order to make them more competitive with those of competing jurisdictions.
Here, unfortunately, the Ontario Liberals have done a poor job, according to Finn Poschmann, director of research with the Toronto-based C. D. Howe Institute.
"Governments can make it easier for business to adjust to adverse conditions and they can encourage investment, job creation and income growth," says Poschmann.
"The feds have made some smart moves and so have some of the provinces. Ontario's tax policy could be a lot smarter."
The province is home to 50 per cent of the country's manufacturing capacity, but has the highest effective tax rate on business investment in Canada, Poschmann says.
Ontario also levies a retail sales tax rather than something similar to the federal goods and services tax.
As a result, manufacturers pay the tax on materials and components they use in their production processes and these charges wind up as part of the final price of the goods.
Poschmann says that B.C., Saskatchewan, Manitoba and Prince Edward Island have also maintained retail sales taxes.
Newfoundland, Nova Scotia and New Brunswick have harmonized their taxes with the GST while Quebec has adopted a measure that is very similar.
Manufacturers in these provinces receive credits for the GST they pay on inputs, which effectively lowers their costs of doing business.
But don't expect McGuinty's Liberals or John Tory's Progressive Conservatives to undertake any bold tax reforms to assist manufacturing after the election.
Howcroft contends that both platforms are disturbingly vague in their prescriptions for the economy.
"We'd like to see the political parties saying what they're going to do to ensure that Ontario maintains a vibrant manufacturing sector," he says. "You can't do that with generalities. You need specifics."
Ontario is an overtaxed jurisdiction, he adds. Its manufacturing sector is under enormous pressure from China, India and other low-cost countries and the problem is not going away.
"We are going to have to deal with these challenges," he says. "Unfortunately, our politicians are looking for 20-second sound bites on radio and TV."
Or, like Dalton McGuinty, they're offering voters frivolities like Family Day. Meanwhile, global financial forces eat away at bedrock industries that generate the income and peace of mind that many Ontario families need in order to enjoy their time off.
(D'Arcy Jenish can be reached at jenish@businessedge.ca)
