There is little doubt that Ontario’s contribution to Canada’s overall economic health is considerably smaller now than it was ten years ago.
This observation is based on the fact that over the past eight years (since the “great” recession), total employment in the province has grown by just 5%. This is less than half the 12.6% gain it recorded between 2001 and 2008. Excluding Ontario, employment growth in Canada also slowed in the wake of the 2008 recession. However, since that time, it has risen by 7.2%, well ahead of the gain recorded by the country’s largest province.
While, as noted above, the Ontario economy has exhibited a modest recovery since 2008, a recent paper by the Fraser Institute reveals that the pattern of this recovery across the province has been extremely uneven with almost all the job growth occurring in just two major urban areas.
Since 2008, 98.6% of the new jobs in the province have been located in Toronto and Ottawa, the province’s two largest census metro areas. This implies, of course, that there has been almost no net job creation in the rest of the province.
Outside Toronto and Ottawa, the study reveals that the pattern of job gains has been directly related to the size of Census Metro Areas (CMA – population 100,000+ with core population of at least 50,000) and Census Agglomerations (CA – core population 10,000 to 50,000). Further, virtually all of the CMAs and CAs outside Toronto and Ottawa that posted job gains above the provincial and national averages were located in close proximity to the Greater Toronto Area, Ottawa and the region on the border of the golden horseshoe and Southwestern Ontario.
Centres outside Toronto and Ottawa that logged strong job gains, above the provincial average, include Oshawa, Leamington, Guelph, Kitchener-Waterloo, Barrie and Windsor. The gains in these centres were almost completely offset by job losses in Cornwall, Sarnia, Sault St Marie, Norfolk, Chatham, North Bay, Timmins, Peterborough, London and Sudbury.
Given that employment growth in Ontario has lagged behind the nation as a whole over the past nine years, it is not surprising that the province’s unemployment rate (7.6%) has averaged above the national average (7.3%).
And, as with the pattern of hiring, unemployment rates vary considerably in the province’s urban centres. Driven in large part by relatively stronger job gains in the above noted CMAs and CAs, the unemployment rates in Guelph (6.0%), Ottawa (6.2%), Kingston (6.3%), Hamilton (6.6%) and Kitchener-Waterloo (6.9%) have consistently been under the provincial average.
At the same time, centres with higher unemployment rates, including Windsor (9.8%), Chatham (8.9%), Sarnia (8.7%) and Cornwall (8.1%), have clearly not benefitted from the warmer economic climate that has fuelled growth in other parts of the province. The one CMA which has experienced persistently high unemployment (8.1%) despite strong job growth (+12.3%) is Toronto. This apparent inconsistency is due to the fact the city has attracted a steady inflow of international and interprovincial migrants seeking employment.
Just as the pattern of employment across urban centres in Ontario has been very uneven over the past nine years, so also has been the pattern of the job gains within the province’s major industries. As it has consistently done since 2009, the service sector generated the vast majority of new jobs, +435,500, while employment in goods-producing industries has contracted by -101,700.
By far the major contributor to the increase in services employment was the health service industry which accounted for over 40% of the total jobs added in the province. In addition, within services, there was a significant increase in hiring of professional, scientific and technical workers, of financial services workers and workers in the accommodation sector.
The drop in hiring in goods production stemmed primarily from a 43% decline in manufacturing employment which was only partly offset by a 20% increase in construction employment.
Ontario post-recession recovery has been sub-par and very uneven
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