Is Ontario on the brink of a recession?

This June, the rest of Canada created six thousand full-time jobs while Ontario lost more than 45,000. Ontario’s economy actually shrank in the first quarter of this year -- this is the only province where this happened. Every week, hundreds of Ontarians lose their jobs -- leaving families and communities devastated.

Developments so far this year continue to confirm the separate paths the resource-rich western provinces and manufacturing-heavy central Canada are taking, according to RBC Economics Research. Record-high commodity prices and strong global demand for natural resources – other than forest products -- are sustaining unprecedented prosperity in western Canada, while the strong Canadian dollar, weak U.S. economy, high energy prices and delays in, or cessation of, major capital projects are causing hardship in provinces east of Manitoba.

Ontario is labouring through its softest patch since the 1990s recession.

Early this year, Ontario’s exports were pounded by the high Canadian dollar and the downturn in the U.S. economy, as well as by a strike at a major U.S. motor vehicle parts manufacturer that disrupted Ontario’s auto production.

According to BMO Economic Research, the auto sector continues to face a barrage of layoffs – 5,000 in the past two years – and new investment is diminishing with the Canadian dollar at parity and UAW concessions in the U.S. reducing Ontario’s cost advantage. In a sign of the times, GM will no longer employ anyone directly in Windsor when its transmission plant closes in 2010.

While manufacturing employment is down five per cent year-over-year through May, service-sector jobs are up 3.3 per cent on strong public sector hiring.

The Province expects to post another balanced budget in 2008-09 after a $750 million reserve allowance – though that assumes 1.1 per cent economic growth – with more of the same projected through 2010-11. Revenue is expected to inch up 0.4 per cent to $96.8 billion this year.

Ontario has got to find a way to stop the bleeding. As Opposition, we have urged the Liberals to hold an economic summit. This summit should include leaders from the business, labour and academic communities, as well as the federal and municipal governments.

This is the time to put our heads together and develop a plan to revive Ontario. We need to preserve jobs during these tough times. We need a more competitive economy that will sustain the province into the future. We need leadership.

The McGuinty government’s finances are off track, and they are not telling the whole story to Ontarians. Many of the major assumptions in the government’s spring budget have proven to be incorrect or outdated. They are wrong on everything from inflation to gas prices, revenues and job losses.

It’s time to open up the books -- present a new economic statement with an accurate, up-to-date picture of the province’s finances. The McGuinty financial statements released months ago in the budget are based on outdated numbers. You cannot make the right decisions based on the wrong numbers.

Either the province’s finances are so far off track that McGuinty is afraid to admit it, or his government is failing to keep proper track of public funds and is unable to provide the information. Either way, it’s no wonder the Premier refuses to issue a full economic update to explain what is happening to the Ontario public’s money.