[LINK] "The Good News About the Bad Times"

[rfmcdonald]

While the Conservative government is reacting to the hollowing-out of Ontario's industrial sector by creating a regional development agency, the Southern Ontario Development Agency, Toronto Life's Philip Preville suggests (The Good News About the Bad Times") that southern Ontario may recover by becoming an international financial centre, auded by the self-destruction of Wall Street.

This wouldn't be the first time Toronto cashed in on another city’s financial devastation. Though it is synonym­ous with money, power and high rolling in this city, Bay Street was created by a mass stampede away from uncertainty, namely the election of the separatist Parti Québécois in November 1976. Separatism has since become such a staple of Canadian life (with its own political party in Ottawa, its MPs drawing salaries and pensions from Canadian taxpayers) that it’s hard to recall the panic that gripped the country, and especially Montreal’s business community, in the wake of separatism’s first election victory. Sun Life Assurance made a show of its exodus. Royal Bank, Bank of Montreal and others moved out quietly, department by department, over a period of years. Once in Toronto, the industry thrived, and the city now ranks consistently among the world’s top 20 financial centres. The September instalment of the Global Financial Centres Index, which is the industry’s gold-standard ranking of where money and power are located, showed that Toronto had jumped from 15th place to 12th, leapfrogging over Paris (which was in free fall, dropping from 14th to 20th), San Francisco and Dublin. Such financial centres as Boston, Sydney, Frankfurt and even Chicago were now within striking distance.

I met Ontario Finance Minister Dwight Duncan in his boardroom early one November evening. “I think it should be a goal for Toronto to rank among the top 10 in the world,” he said. More than any finance minister in recent memory, Duncan, with his heavy, neckless frame, looks the part of a stereotypical banker—albeit a banker in bad times, with dark circles under his eyes. He’d spent the previous week in the riding he represents, Windsor-Tecumseh, an area heavily dependent upon the auto industry. It’s starting to look like most of the 150,000 manufacturing jobs the province has lost in the past two years are gone for good. Ontario is now experiencing what the U.K. went through under Margaret Thatcher: a final, massive shift from manufacturing jobs to service jobs. In the new economy, Ontario doesn’t make stuff anymore. We let other places do that; our new job is to lend, invest, and manage people’s money.

It'd be nice if my readers in the United Kingdom could tell us whether Thatcher's sectoral reorganization of the British economy was a good thing in the long run.