Ontario’s economic minister uses faulty analysis to attack facts and data

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Appeared in the Ottawa Sun, March 21, 2018

Last week, the Fraser Institute published a study (which I co-authored) documenting Ontario’s poor economic performance over the last decade. Between 2007 and 2016—across several economic indicators—we show that Ontario lagged well behind the national average.

Steven Del Duca (pictured above), Ontario’s minister of Economic Development and Growth, took exception and wrote a letter to the Toronto Sun accusing me of playing “fast and loose with the facts,” “cherry-picking” statistics and delivering a “tremendous insult” to Ontarians.

But in reality, it is Minister Del Duca who has presented a faulty analysis and lowered the level of discourse with insults and baseless accusations.

Here are the facts. Our study analyzed a decade of economic data—from 2007 to 2016. Starting our analysis in 2007 allowed us to include the recession, the recovery and the years since. In short, we measured Ontario’s performance from one peak in the business cycle (2007—just before the recession) to the latest year of comparable data (2016), which is likely near another peak.

The results? For economic growth per-person, Ontario ranked 7th out of 10 provinces, and 8th for private-sector job-creation. Finally, Ontario ranked dead last for median household income growth. On these bases, we characterize 2007-2016 as a “lost decade” for Ontario’s economy.

Minister Del Duca’s letter responds to all of this with job-growth statistics, strategically beginning from the lowest point of the recession. In other words, while we measured performance from one business cycle peak to another, Minister Del Duca responds with a basically meaningless trough-to-peak analysis. It’s akin to observing falling temperatures from July to December and claiming to have disproved global warming.

But he doesn’t stop there. The minister goes on to say our study actually insults Ontarians who “drive to work, put in a full day or more, and volunteer in their communities in their spare time.”

The idea that publishing sobering economic information about a jurisdiction constitutes an insult to its residents suggests a serious misunderstanding of the purpose of economic research.

For example, the term “lost decade” was first popularly used to describe the 1990s in Japan, where and when economic growth was weak. Does Minister Del Duca think recognizing Japan’s weak growth in the ’90s insults the Japanese people? Could any reasonable person believe that noting this stagnation is to accuse the Japanese of failing to work hard for the benefit of their families and communities?

The answer is, of course, no. Recognizing Japan’s lost decade and analyzing the contributing factors doesn’t insult the Japanese—it deals with reality. Just like recognizing and analyzing Ontario’s recent underwhelming economic performance deals with reality and facts.

Ontarians do work hard, help their communities, and participate in our democracy. And they deserve leaders who engage in informed civil discourse relying on sound arguments and reasonable analysis of empirical facts.

Minister Del Duca has let them down by hurling insults rather than reflecting on the causes of Ontario’s lost decade and considering steps his government could take to enhance growth going forward. These steps could include reforming our uncompetitive personal income tax system, developing a credible plan to strengthen public finances, and finding genuine solutions to high electricity prices. By pivoting to a pro-growth policy framework, our leaders can help ensure Ontario’s next economic decade is not lost as well.

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