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                            ONTARIO'S ECONOMIC OUTLOOK:

               RBC PREDICTION ONTARIO WILL TOP PROVINCES

                             IN GROWTH CAUSE FOR HOPE

 

By Randall White

It would still be rash to get too excited about Ontario’s current diverse economic prospects. But followers of the numbers have been suggesting better-than-average news for a while now, as falling oil prices rearrange Canadian regional economic fortunes.  

So it’s not surprising that the latest RBC Economics report on Canadian provinces, released this past Thursday, expects Ontario to have the best economic performance of all the provinces this year.

“Ontario (with real GDP forecasted to grow by 3.3%) (Is expected to) take top spot in provincial growth rankings in 2015—something that has not occurred since 2000.” 

Yet even if it is no surprise, for this is still a promotion for Ontario.

As recently as February 23, the Conference Board of Canada’s latest provincial report was just telling us “Ontario joins Manitoba and British Columbia as economic growth leaders this year.” 

Statistics Canada, in its latest monthly labour force survey, confirm the good news for Canada’s most populous province.

The Canada-wide unemployment rate rose to 6.8% last month, up from 6.6% in January, as falling oil prices began to have an impact on jobs.  

The biggest loser was oil-rich Alberta, which lost 14,000 net jobs and its unemployment rate rose to 5.3%.

Manitoba, Saskatchewan, Alberta and British Columbia all sustained net job losses between January and February of this year.

However, during that same period Ontario added 13,800 net jobs, and Quebec had a net gain of 16,800.  

Unemployment rates are still notably higher in central Canada than in the west.

But they stabilized at 6.9% in Ontario for both January and February 2015, and 7.4% for the same two months in Quebec. 

Meanwhile, unemployment rates rose over the same period in all provinces west of Manitoba — albeit to an average of a still-low 5.5% for February.

The latest seasonally adjusted, three-month moving average unemployment rates for major urban centres also offer intriguing data for 15 Ontario places.

The areas with the highest unemployment rates currently are Windsor (9.6%), Peterborough (7.7%), and Toronto (7.6%).

Seven other centres have medium unemployment rates, just above and below the 6.9% provincial average: London (7.0%), Oshawa (7.0%), Ottawa (7.0%), St. Catharines-Niagara (6.9%), Kingston (6.8%), Barrie (6.4%), and Sudbury (6.3%). 

Five more centres have the lowest current unemployment rates in Ontario (and compare with such places as Edmonton and Saskatoon) — Hamilton (5.6%), Brantford (5.5%), Kitchener-Cambridge-Waterloo (5.5%), Guelph (5.0%), and Thunder Bay (4.8%).

Whatever is happening to the diverse Ontario economy at the moment is still relatively modest.

Even the RBC Economics report, which expects Ontario’s real GDP to grow by 3.3% in 2015, is forecasting that same measure will “ease” to a mere 2.7% in 2016. 

As Marie-Christine Bernard at the Conference Board has put it, “Ontario, with its minor exposure to the oil and gas extraction sector, is expected to receive a significant economic boost in the short term.” 

But has the province really started to turn the corner in the longer-term struggle to retool an economic base that has been much challenged by the international trends of the past several decades?

That probably remains a policy dream rather than the current reality. 

But still, there are positive signs.

The University of Waterloo and the University of Toronto are widely recognized as leading schools for computer science in Canada. 

Since the late 1990s Brantford has revitalized its downtown by attracting a satellite campus of Wilfrid Laurier University, which has developed a popular MBA program. 

The University of Guelph has revitalized and broadened the old Ontario Agricultural College. The medical school at McMaster University in Hamilton punches above the weight of its parent institution.  

All this helps explain the region that includes Guelph, Kitchener-Cambridge-Waterloo, Brantford, and Hamilton currently boasts the lowest unemployment rates in Ontario — except for Thunder Bay, where Quebec's Bombardier is still (hopefully?) building new streetcars for Toronto. 

Of course the Grand River hi-tech cluster from Guelph to Hamilton in Southern Ontario is nothing like Silicon Valley in Northern California. And there is nothing to suggest it ever will be.

Still, the Knight Frank global real estate consultancy has recently ranked Toronto number 12, among the top 40 “most important cities for the world’s mega-rich” in 2015. (On this same list San Francisco is a mere number 19!)

Ontario may never again quite be what it was for a few decades after the Second World War. And many elsewhere in Canada will say amen to that.

But Ontario today is still Canada’s most populous province, by a country mile. And Canada is still a very young country, just starting to come into its own — regardless of what the price of oil may be when autumn leaves start to fall. 

 

 

 

About Randall White

Randall White is a former senior policy advisor with the Ontario Ministry of Finance, and a former economist with the Ontario Ministry of Municipal Affairs and Housing. He is the author of Ontario 1610-1985: A Political and Economic History and Ontario Since 1985. He writes frequently about Ontario politics.
Posted date : March 17, 2015

View all of Randall White's columns
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