Left-Leaning Ontario Minister Courts Big Business

By , Staff writer of The Christian Science Monitor

ED PHILIP isn't asking that Canadian businessmen love him, just that they respect what he's trying to do.

As the newly appointed Minister of Industry, Trade, and Technology for Ontario, he is faced with one of Canada's toughest jobs: engineering an industrial revival in the nation's biggest manufacturing province, which is also undergoing the country's biggest industrial retrenchment.

Mr. Philip's job is made doubly tough because his left-leaning provincial New Democratic Party (NDP), installed in 1990 by voters wanting change, is viewed skeptically by those who populate the ranks of company executives.

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In an interview, Philip makes no bones about his ideas being different. He distinguishes his "partnership" approach from the laissez-faire policies of the federal Progressive Conservative party of Prime Minister Brian Mulroney.

"People say that we're a government that favors big government intrusion," he says. ve had people say 'You're a different version of privatization,' and I guess we are, except we believe in a cooperative privatization. Our role is to work with business, labor, and communities - they've each got to give something."

Ingredients of Philip's approach include:

* Attracting foreign investment to the province.

* Promoting incentives to attract "high-value added industry."

* Finding new sources of venture capital.

* Boosting corporate research and development spending.

* Opposition to a North American Free Trade Agreement based on the premise that the United States-Canada Free Trade Agreement (FTA) has not proven itself a success yet.

Slowing the slide of Ontario's manufacturing sector is a priority for Philip. Since 1985, Canada and its manufacturing core in Ontario have lagged the US and other nations in productivity growth and R&D spending.

Philip says the NDP government is responding to the challenge by boosting research spending directly in corporations - kicking in 50 cents for every dollar spent.

Skepticism is evident among business leaders in Ontario. But they seem willing to give Philip the benefit of the doubt - at least for now.

"I believe he sincerely wants to work with business," says Thomas d'Aquino, president of the Business Council on National issues, a nonpartisan group of chief executives of 160 of Canada's leading companies. "But it's difficult for the business community at times because [Philip] cannot impose his views on the government - and many of his colleagues ... do not have his philosophy ... or are suspicious of business."

S it possible to bridge the mistrust? "That's difficult to do," Mr. D'Aquino says. "[Philip's] record in closing the gap has so far been mixed."

Philip responds, "I don't think that the role of government is to do things for people, so much as to set up the conditions, and occasionally, where necessary fund the start-up."

Outlining more of his nuts-and-bolts approach to attracting investment and bolstering resident companies, he cites a new effort to find out if a percentage of public-employee pensions can be used as seed capital for small businesses.

Philip likes the idea of innovating to meet business needs - but acknowledges a key business fear - that the NDP government may make it more expensive to do business. Some corporate tax rates may be raised, he admits, but others will be lowered to aid "companies doing things of most benefit to the province."

D'Aquino says these are among the "very real concerns about [NDP officials'] fiscal policy, their attitude toward deficit spending and debt" and worries about pending legislation to give more protection to union organizing activities.

Philip is unequivocal about the impending North American Free Trade Agreement that would link Mexico, the US, and Canada, saying his views are in line with many Canadian businessmen: "We haven't yet digested the [current] US-Canadian Free Trade Agreement and the federal government promised some adjustment programs that have not materialized."

With Canadian unemployment at more than 10 percent and many factories closing since the FTA, "it would make some sense to be prudent and digest [the FTA] before moving into the next round." But in the long run, he says, there is little use in digging heels in against global trade.

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