Optimism is an admirable human quality. However, Dalton McGuinty's 'don't worry, be happy' style of government can no longer cover up the huge cracks forming on the economic foundation of this province.

Facts are facts and it's time for the government to abandon hope that things will get better soon.

Let's begin with the economy. Despite mounting evidence that Ontario is perilously close to driving off the cliff of financial stability and into the dark and murky waters of recession, the Liberal government continues to pretend that it's not happening.

Ontario was once the economic engine of Canada. Today, our manufacturing sector is in freefall, our unemployment rate is rising, fuel prices are soaring and eating away at stagnant incomes, housing prices are in decline, and overall consumer confidence is dwindling.

Statistics Canada reports that 45,500 full-time Ontario workers either lost their jobs or were put on part-time work in June. This is the biggest monthly job loss since 1990. Overall, Ontario's unemployment rate rose to 6.7 per cent in June from 6.4 per cent in May.

Six months ago, Ontario Premier Dalton McGuinty insisted the Ontario would not fall into a recession.

"All the economists we've heard from both inside and outside of government say that we will experience growth," he said.

Really?

From January to March this year, Ontario recorded a decline in gross domestic product of 0.3 per cent. It's the first quarterly drop since the last recession in the early 1990s.

If Ontario records a second decline through the next quarter, the province will officially be in recession.

While some banks, and even the Ministry of Finance, are calling for nominal growth in 2008, the pace is on par with the 1990-92 recession.

The auto sector in Ontario has been hit especially hard by high oil prices and decreasing demand. Thousands of jobs have disappeared, with more bad news expected on the horizon.

Hamilton will certainly feel the effects of changes in the auto sector. This area is not only home to steel production, but also employs thousands of people in auto supply and parts manufacturing.

Disturbing news also came out this week indicating the housing bubble has finally burst.

Canada's once resilient real estate market recorded a year-over-year decline in June, marking the first such drop in nearly a decade, according to the Canadian Real Estate Association.

The report shows the average price of a home fell by 0.4 per cent prompting economists to suggest the market's bull run has finally ended.

The high Canadian dollar continues to adversely affect Canadian manufacturers who rely on export markets, mainly the United States.

Gas and energy costs continue to fly on a speculative high, meaning the cost for almost everything is being subjected to the pains of inflation.

But what exactly is the government to do? Gas prices, the Canadian dollar and the crumbling US economy are beyond McGuinty's control.

Should he follow a Keynesian strategy of economics and spend our way to prosperity through massive, job-creating infrastructure investments?

At this point, it seems the government is more closely aligned to the Milton Friedman school of economic theory which is to let the markets and economy take care of itself.

Let's give the Liberals some credit. Despite the latest June unemployment figures, Ontario has seen a net increase of 454,000 jobs since the Liberals took power in 2003, and most of them are full-time positions.

However, it was the booming economy over the last five years, and not any specific government policy, that led this growth surge.

Governing in good times is easy. The true litmus test for any government is how it manages through crisis.

Ontario needs to hear from its premier. Much of the announced plans regarding job training are long-term initiatives and don't address the economic situation as it stands today.

If ever Ontarians needed a dose of reality, it's now. Admitting a problem is the first step towards recovery.