Commission on the Reform of Ontario's Public Services

Towards a New Business Support Framework
Given the spending reduction targets we propose in Chapter 1, The Need for Strong Fiscal
Action, spending on business support at current levels is unsustainable. To address the
challenges noted above, we can either restructure the existing programs, including ending
poor performers, or make a clean break and start over by asking ministries to develop fewer
programs that are better focused on helping Ontario businesses become more productive
and competitive.
We believe the second option is the better way. We suggest that the government develop a
new business support framework built on five policy pillars:
� Refocus mandate to sharpen objectives and incorporate evidence-based analysis;
� Consolidate funding across ministries;
� Include tax expenditures;
� Integrate delivery; and
� Strengthen accountability and transparency.
Refocus Mandate
A refocused mandate for business support programs would shift from an emphasis on job
creation towards encouraging firms to enhance productivity through innovation; technology
adoption and training; improved business practices; and energy conservation and efficiency.
It also means encouraging entrepreneurship. Innovative new firms can increase productivity
directly, as well as drive incumbent firms to become more productive in order to compete.
Research performed in universities, colleges and hospitals is an especially fertile field for
harvesting commercial opportunities by entrepreneurs and risk capitalists.
The impetus for improving productivity is clear. As noted in Chapter 1, it will be difficult to
achieve Ontario’s deficit target by 2017–18 with a continuation of the weak productivity growth
seen in the private sector in recent years. Business support programs that promote improved
productivity growth will therefore play an important part in ensuring Ontario’s fiscal viability.
Improving private-sector productivity allows businesses to successfully compete in domestic
and global markets and create jobs. Governments do not create jobs in the private sector —
only successful businesses can do that. Rather than the traditional focus on job creation as an
end in itself, government should focus its business support on those areas with the greatest
potential to improve productivity. New programs must clearly demonstrate that they are
aligned with this objective.
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