The Destruction Of Ontario Part 1: The Job Market

by Terry Wilson
Canadian Awareness Network
Jan 31, 2014

Ontario, the once “economic powerhouse” of the nation is facing some of the biggest economic woes that one could imagine!

Since the signing of NAFTA (North American Trade Agreement) in 1993, Ontario’s manufacturing base has been devastated! As seen in the below chart.

Now the current provincial government headed by Dalton McGuinty and Now Kathleen Wynne has been working extremely hard to change Ontario’s energy production under the long-term energy plan. Which includes a move towards “green energy”. That has sent hydro prices through the roof! Costing the province a loss of an estimated 300,000 manufacturing jobs since 2010.

Sadly this trend is just beginning. As highlighted in this article from Barrie Ont. for December 2013.

“Kevin McCaughen’s business pays an average of $325,000 per month for electricity and he’s preparing to see that number increase.

McCaughen, plant manager at Sigma Stretch Film, said news that Ontario’s hydro costs are going to continue to grow by an anticipated 42 per cent over the next five years could be seen as the death blow for manufacturers in the province.

The Ontario Liberals released their Long Term Energy Plan Tuesday with a projected outlook of hydro costs continuing to balloon in the coming years.

That balloon may pop and leave Ontario’s manufacturers deflated.

“I’ve looked at hydro rates and the actual cost of hydro hasn’t really gone up that much, it’s the new Liberal green initiatives,” said McCaughen. “We use about $60,000 worth of hydro and our bill can be as high as $325,000 a month. You get all those fees on there and the adjustments and it’s just going to kill industry.””
intelligencer.ca

The massive losses in the industrial sector will mean (and have already shown) a large demand increase for service sector employment. Lets take a look at what is happening in the service sector.

Since the vast majority of the service sector is made up of low paying minimum wage positions. Many people who previously held higher paying industrial jobs, are struggling to get by on minimum wage. The provincial government is not responding to this logically by creating a plan to save industrial jobs or heaven forbid create new industrial opportunities. Their solution is to raise the minimum wage levels to $11 an hour, and an minimum wage increase every year on Oct. 1st based on inflation rates.

The main problem with this plan is summed up pretty well by Karl Littler, a vice-president at the Retail Council of Canada.

“The Ontario decision could lead to some job losses and reduced hours of work as retailers struggle in a hyper-competitive climate, warned Karl Littler, a vice-president at the Retail Council of Canada. Already some retailers are feeling the squeeze: Best Buy Canada, with increasingly savvy online and discount rivals, announced on Thursday it is cutting 950 jobs at its namesake and Future Shop stores. The previous day, Sears Canada Inc. sliced 624 jobs on top of thousands last year.”
Source

The plan to increase minimum wage will result in job losses and reduction in hours for the employed. Not creation of new jobs to cover the losses in the industrial industry. Or for students getting out of school, unable to find employment in their fields and turning to the service sector just to get by.

A second new initiative from the Liberal government is the Ontario pension plan. It is being billed as a way to help correct the short comings of the Canadian pension plan.

“Premier Kathleen Wynne on Tuesday appointed a panel of academics, finance experts and pension advocates to recommend the specifics of the fund, which will be unveiled in the budget this spring and could become a top issue in a snap election.

And for the first time, she revealed some details on what the plan will look like. For instance, it will oblige both employees and companies to pay in.

“We need to set up a structure so that people can save their own money and they can make an investment, along with their employers, in their future,” she said. “There needs to be a mandatory aspect to this to have the number of people involved that makes this a viable plan.””
Source

On top of the wage increase, companies will be “obliged” to pay into their employees pension plans.

This is a recipe for disaster! But it is not by chance or by accident. It is planned. Stayed tuned for part 2 to see how.