Business Leaders Congratulate McGuinty, Highlight Fiscal Challenges Facing Ontario

October 3, 2003

The Canadian Council of Chief Executives (CCCE), which represents the CEOs of 150 leading Canadian corporations, today congratulated Ontario Liberal Leader Dalton McGuinty on his victory in yesterday’s provincial election.

“You and your team have earned your impressive victory, and we wish you well as you assume the awesome responsibility of governing Canada’s most populous province and the core of our country’s economic engine,” Thomas d’Aquino, President and Chief Executive of the CCCE, said in a letter to the Premier-elect.

The CCCE’s members include the chief executives of the vast majority of Ontario’s largest private-sector employers in industries such as banking, insurance, automotive and other manufacturing, transportation, communications, information technology, resource production and distribution, hospitality, and retailing.

In his letter to Mr. McGuinty, Mr. d’Aquino noted that the incoming government faces difficult choices about how best to address the pressing needs of today without undermining future economic growth and job creation.

“Ontarians have learned painfully the futility of trying to fuel social progress with borrowed money,” he wrote. “The legacy of past provincial deficits – the continuing interest on Ontario’s public debt – still eats up three times as much of the taxes Ontarians pay as total operating grants to the province’s colleges and universities. You have promised not to send Ontario back into the fiscal pit of repeated deficits, and we applaud you for this commitment.”

At the same time, Mr. d’Aquino cautioned that the Ontario Liberal Party’s plan to use corporate taxation as the primary means of raising extra revenue will have serious consequences.

“The economic evidence demonstrates clearly that raising this form of taxation has a disproportionate cost to future economic growth, and returning the province’s corporate tax rate to 14 per cent from 12.5 per cent would position Ontario as a higher-tax jurisdiction than Quebec, British Columbia and New Brunswick as well as Alberta. It also would undermine the province’s ability to compete with United States jurisdictions in attracting new business investment and in retaining existing plants and jobs within industries that are consolidating globally.”

The CCCE is Canada’s senior business organization. Its members head companies that administer in excess of $2.1 trillion in assets, have annual revenues of more than $500 billion and account for a significant majority of Canada’s private-sector investment, exports, training and research and development.

The members of the Executive Committee are: Chairman Richard L. George, President and Chief Executive Officer of Suncor Energy Inc.; Council President and Chief Executive Thomas d’Aquino; Honorary Chairman A. Charles Baillie; and Vice Chairmen Derek H. Burney, Dominic D’Alessandro, David L. Emerson, Gwyn Morgan, Gordon Nixon and Paul M. Tellier, the chief executives respectively of CAE, Manulife Financial, Canfor Corporation, EnCana Corporation, Royal Bank of Canada and Bombardier Inc.

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October 3, 2003

Letter to Mr. Dalton McGuinty
Premier-elect of Ontario

Dear Premier-elect McGuinty,

On behalf of the Canadian Council of Chief Executives (CCCE), I offer my congratulations on the results of yesterday’s Ontario election. You and your team have earned your impressive victory, and we wish you well as you assume the awesome responsibility of governing Canada’s most populous province and the core of our country’s economic engine.

The CCCE’s members include the chief executives of the vast majority of Ontario’s largest private-sector employers in industries such as banking, insurance, automotive and other manufacturing, transportation, communications, information technology, resource production and distribution, hospitality, and retailing. As a non-partisan organization, we are committed to the economic success of Ontario and of all parts of Canada, but we also recognize that economic achievement is a means to an end, not an end in itself.

As expressed during our Canada Global Leadership Initiative in 1999, our overall goal is nothing less than to make Canada the best place in the world in which to live, to work, to invest and to grow. Public goods — including high quality and accessible public health care, superb schools, colleges and universities, clean air and water, safe streets and solid infrastructure — all contribute to this goal by making Ontario communities places where talented people from around the world are happy to live and work.

At the same time, we must never forget that it takes a strong and growing economy to sustain and improve public services over time. To create jobs, to raise incomes and to provide the tax base necessary to fund first-class public services, the business environment must persuade Canadians and foreign investors alike that this is a great place to build and expand enterprises serving customers across North America and around the world. Without a thriving economy as the foundation, all of our dreams of social progress will prove unattainable.

Ontarians have learned painfully the futility of trying to fuel social progress with borrowed money. The legacy of past provincial deficits — the continuing interest on Ontario’s public debt — still eats up three times as much of the taxes Ontarians pay today as total operating grants to the province’s colleges and universities. You have promised not to send Ontario back into the fiscal pit of repeated deficits, and we applaud you for this commitment.

While we respect your need to make difficult decisions in making ends meet in the short term, we would suggest that your plan to use corporate taxation as the primary means of raising extra revenue will have serious consequences. The economic evidence demonstrates clearly that raising this form of taxation has a disproportionate cost to future economic growth, and returning the province’s corporate tax rate to 14 per cent from 12.5 per cent would position Ontario as a higher-tax jurisdiction than Quebec, British Columbia and New Brunswick as well as Alberta. It also would undermine the province’s ability to compete with United States jurisdictions in attracting new business investment and in retaining existing plants and jobs within industries that are consolidating globally.

That said, we recognize that this is just one of the difficult choices your government will face in these challenging times. As you make these decisions about how best to address the pressing needs of today without undermining the economic growth that will determine the quality of life of Ontarians in the years ahead, we want you to know that we stand ready to work with you and your government in any way that you consider helpful.

Again, please accept my congratulations on your overwhelming electoral victory, and let me close by expressing the hope that you will be able to meet with the members of the Council at a suitable time in the weeks ahead.

Yours sincerely,

Thomas d’Aquino
President and Chief Executive

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ONTARIO BASED MEMBERS
CANADIAN COUNCIL OF CHIEF EXECUTIVES

G. F. Kym Anthony President and Chief Executive Officer National Bank Financial		John S. Hunkin Chief Executive Officer CIBC
John R. Barnett President and Chief Executive Officer Rothmans Inc.		David W. Kerr Chairman Noranda Inc.
Thomas J. Bata *** Honorary Chairman Bata Limited		Ed Kilroy President IBM Canada Ltd.
Alain Batty President and Chief Executive Officer Ford Motor Company of Canada, Limited		Deryk I. King Chairman and Chief Executive Officer Centrica North America
W. Geoffrey Beattie President The Woodbridge Company Limited		R. Jack Lawrence Chairman Lawrence & Company Inc.
Kevin T. Boyce President and Chief Executive Officer Unilever Canada		David A. Leslie Chairman and Chief Executive Officer Ernst & Young LLP
Derek H. Burney * President and Chief Executive Officer CAE		Doug Lord President and Chief Executive Officer Xerox Canada Ltd.
Derek J. Burney President and Chief Executive Officer Corel Corporation		William A. MacKinnon Chairman and Chief Executive KPMG
John M. Cassaday President and Chief Executive Officer Corus Entertainment Inc.		Michael I. M. MacMillan Chairman and Chief Executive Officer Alliance Atlantis Communications Inc.
John Chippindale President and Chief Executive Officer Marsh Canada Limited		Albert Maringer President and Chief Executive Officer Siemens Canada Limited
W. Edmund Clark President and Chief Executive Officer TD Bank Financial Group		Michael H. McCain President and Chief Executive Officer Maple Leaf Foods Inc.
Frank Clegg President Microsoft Canada Co.		Robert R. McEwen Chairman and Chief Executive Officer Goldcorp Inc.
Mark A. Cohen Chairman and Chief Executive Officer Sears Canada Inc.		Douglas W. Muzyka President and Chief Executive Officer DuPont Canada Inc.
Tony Comper Chairman and Chief Executive Officer BMO Financial Group		Norman W. Naumoff President Kodak Canada Inc.
Dean A. Connor Chairman and Chief Executive Officer Mercer Human Resource Consulting Limited		Gordon M. Nixon * President and Chief Executive Officer Royal Bank of Canada
Dominic D’Alessandro * President and Chief Executive Officer Manulife Financial		Don A. Pether President and Chief Executive Officer Dofasco Inc.
Kevin J. Dancey Chief Executive Officer PricewaterhouseCoopers LLP		Philip Reichmann Chief Executive Officer O&Y Properties Corporation
Thomas d’Aquino* President and Chief Executive Canadian Council of Chief Executives		Gordon Reid *** Chairman and Chief Executive Officer Giant Tiger Stores Limited
John R. Dowd President EDS Canada Inc.		Edward S. Rogers *** President and Chief Executive Officer Rogers Communications Inc.
William A. Downe Chief Executive Officer BMO Nesbitt Burns Inc.		John A. Rogers President and Chief Executive Officer MDS Inc.
Frank A. Dunn President and Chief Executive Officer Nortel Networks Corporation		Seymour Schulich *** Chairman and Chief Executive Officer Nevada Capital Corporation Limited
William R. Fatt Chief Executive Officer Fairmont Hotels & Resorts Inc.		Donald A. Stewart Chairman and Chief Executive Officer Sun Life Financial Services of Canada Inc.
Kenneth E. Field Chairman and Chief Executive Officer Commercial Alcohols Inc.		Barbara G. Stymiest Chief Executive Officer TSX Group Inc.
J. Bruce Flatt President and Chief Executive Officer Brascan Corporation		Douglas R. Swartout Chairman, President and Chief Executive Officer Aon Reed Stenhouse Inc.
Robert T. E. Gillespie Chairman and Chief Executive Officer General Electric Canada Inc.		Shigeru Takagi President and Chief Executive Officer Honda Canada Inc.
Peter C. Godsoe Chairman and Chief Executive Officer The Bank of Nova Scotia		Colin Taylor Managing Partner and Chief Executive Deloitte & Touche LLP
Blake C. Goldring President and Chief Executive Officer AGF Management Limited		Kenji Tomikawa President and Chief Executive Officer Toyota Canada Inc.
Michael A. Grimaldi ** President General Motors of Canada Limited		Paul Tsaparis President and Chief Executive Officer Hewlett-Packard (Canada) Co.
Scott M. Hand ** Chairman and Chief Executive Officer Inco Limited		Annette Verschuren ** President Home Depot of Canada Inc.
Ian F. Hardgrove President and General Manager 3M Canada Company		Kiyotaka Watanabe President and Chief Executive Officer Mitsui & Co. (Canada) Ltd.
Milton E. Harris Chairman and Chief Executive Officer Harris Steel Group Inc.		V. Prem Watsa Chairman and Chief Executive Officer Fairfax Financial Holdings Limited
Tim J. Hearn Chairman, President and Chief Executive Officer Imperial Oil Limited		W. David Wilson Chairman and Chief Executive Officer Scotia Capital
Mark Henderson President and Chief Executive Officer Ericsson Canada Inc.		Charles M. Winograd President and Chief Executive Officer RBC Capital Markets