Commission on the Reform of Ontario's Public Services

� Investment in post-secondary education; and
Chapter 11: Business Support
� Attention to the non-post-secondary education stream, including literacy, apprenticeships
and training.
To the credit of the federal and Ontario governments, action has been taken in about
70 per cent of these areas. However, productivity has continued to lag. If government policy
action does not cure what ails us regarding productivity, what is missing?
Ontario must turn its attention to the role of the private sector. How can the business sector
become more competitive, more entrepreneurial, more productive? Shifting private business
behaviour to capitalize on the value of investing profits in machinery and equipment is central
to improving productivity. Higher productivity, or output per worker, creates opportunities for all
segments of the Ontario economy to win. It can raise real wages of workers; allow businesses
to expand, thereby creating more jobs; and generate more revenue for the Ontario
government.
Government’s role in this cultural shift begins with understanding the underlying causes of
puzzling aspects of current business behaviour such as:
� Why does only four per cent of Canadian small to medium enterprise (SME) revenue come
from exports to the emerging economies?
� Why do we have a much higher concentration of small firms than the United States?
� Why did firm size not grow in response to NAFTA, as had been predicted?
� Why did so many firms try so desperately to remain below the small business income
threshold?
� Why do Canadian and U.S. firms deal with information and communications technology
(ICT) and computers so differently? Why do Canadian firms dramatically underinvest in
ICT on a relative basis and use the equipment in less sophisticated ways?
Transferring the focus of productivity research from macro to micro and exploiting new data at
the firm level through collaborations with Statistics Canada and Industry Canada are essential
underpinnings of Ontario’s economic vision.
This is not just putting together yet another “expert panel”; it is about getting regular, reliably
collected data from Ontario businesses (and preferably businesses across Canada) that
can help guide initial policy transformations, educate businesses about the opportunities that
lie in investing in productivity improvements and track Ontario’s progress towards
economic recovery.
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