Advertisement NEWSROOM


                             The Ontario Economy In The First Quarter


By Randall White

The first quarter of 2016 began on a dark note of doom and gloom about the economy — almost everywhere. 

Then on January 8, Statistics Canada’s Labour Force survey reported that Ontario at least had created almost 35,000 new jobs in December 2015.

This supported recent remarks from Chamber of Commerce president Allan O’Dette that “Ontario is looking at some improved economic conditions over the coming years.”

The January 2016 Labour Force survey, which became available in February, carried on with this upbeat view. As the federal statisticians explained: “For a second month in a row, Ontario was the lone province with employment growth, up 20,000 in January.”

Then the hardest month of winter threw some abrupt cold water on Canada’s most populous province. In February, Ontario had a net loss of more than 11,000 jobs.

This past Friday the Labour Force survey results for March appeared, to round out the full first quarter of 2016.

The good news for Ontario is that the bad news of February has not continued. The province had a net gain of almost 14,000 new jobs in March.

At the end of March, total provincial employment (getting close to 7 million) was slightly above its most recent end-of-January high — and well above the end of December 2015.

All told, Ontario created some 23,000 new jobs over the first quarter of 2016. 

Less fortunately, the provincial labour force seeking work has grown at a slightly faster pace. And Ontario’s province-wide unemployment rate over the first quarter rose from 6.7% to 6.8% 

This still amounts to an unemployment rate somewhat below the Canadian average of 7.1% in March — and significantly lower than six of 10 provinces.  

At the same time, BC, Saskatchewan, and Manitoba have all enjoyed unemployment rates somewhat lower than Ontario’s throughout the first quarter of 2016. 

Moreover, the biggest cross-Canada news in the March Labour Force survey was that Alberta gained almost 19,000 new jobs last month. And its provincial unemployment rate plunged from 7.9% to 7.1%.

Some analysts are interpreting this largely unanticipated burst of economic good news in Alberta as a sign that the bust in the oil economy has now reached some kind of beginning of an end.

But this may prove a premature judgment. According to the Bank of Canada’s spring business outlook survey, business sentiment across the country has recently “improved but remains subdued overall.” What good news there is “continues to be largely offset by the persistent drag and spill overs from the oil price shock.

There does seem to be a new Canadian trend, but it's still somewhat unclear where Ontario fits in.

Too simplistic scenarios about how economic leadership is switching from new resource-rich Alberta back to old industrial Ontario, driven by lower commodity prices and a lower Canadian dollar, are probably not capturing the more complicated real world.

The latest intelligence on regional growth inside Ontario suggests that the real world of the 21st century continues to challenge other old stereotypes as well.

The March 2016 Labour Force survey, for instance, reports that almost 32,000 manufacturing jobs vanished Canada-wide last month. And some recent Ontario regional data bears these numbers out. (Note rising unemployment rates in Barrie, Brantford, and the Niagara Peninsula.) 

On the other hand, both Employment Insurance and Labour Force numbers have reported declining unemployment rates over the first quarter of 2016 in the Oshawa and Windsor regions — iconic Ontario auto manufacturing centres. 

Two other regional employment trends over the first quarter of 2016 stand out.

The first is consistently rising unemployment rates in Northern Ontario. The second is the continuing middling job performance of the province’s largest Census Metropolitan Area (CMA) in Toronto. 

Meanwhile, the five Ontario CMAs with the lowest three-month moving average unemployment rates as of the end of March 2016 were Guelph (4.5%), Hamilton (5.8%), Peterborough (5.9%), Kingston (6.0%), and Kitchener-Cambridge-Waterloo (6.0%)

So what do you get when you add up all the lessons of the first quarter of 2016?  

The Ontario economy is no doubt continuing to do better than its fiercest critics suggest. But like so much else these days, it also remains somewhat subdued. 

Similarly, the Chamber of Commerce may still be right that “Ontario is looking at some improved economic conditions.” But the province is almost certainly not going back to the quarter century after the Second World War, when the old “Empire Ontario” industrial economy did play a more noisy (and controversial) role in Canada, coast to coast to coast.   

Some interesting, forward-looking things are apparently starting to happen in the diverse Ontario economic base today. But they hold out no magic tickets to instant new prosperity. And we still don’t seem to have a very good handle on just exactly where they are taking Ontario.










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 : April 11, 2016

View all of Randall White's columns NEWSROOM
The Liberals won three of four by-elections this week, including a seat in an area they haven't taken since 1949. What do the results mean? Mahoney, Stewart and Parkin debate.
December 12, 2017
Is the centre-left getting crowded? The PC's, Liberals and NDP all seem to be targeting voters there. Which will win them?
December 11, 2017
Canada is redoubling diplomatic efforts to avoid the threat of nuclear weapons hitting Canada and the U.S. Mahoney, Stewart and Parkin on what can be done.
December 05, 2017
What happens when water pollution becomes "nobody's problem?" Ontario has it's own sorry history of water poisoning, and its ecological sins now reach international waters.
December 03, 2017
Postmedia and Torstar are cutting nearly 300 jobs and closing more than 30 newspapers - most in Ontario. Can the government step in? Mahoney, Stewart and Parkin debate.
November 29, 2017
Immigrants in Ontario are much less likely to live in small towns than in big cities. That may make for targeted election policies in 2018.
November 26, 2017
There's plenty of it going on in Canadian politics, not just the U.S. We asked Mahoney, Stewart and Parkin how politicians need to conduct themselves - and avoid ending their careers.
November 22, 2017
Funding needs to be higher and long term to mitigate damages from climate change. It shouldn't just be about getting the Liberals re-elected.
November 19, 2017
The renegotiation of NAFTA resumes this week in Mexico City. What does Canada have to do to save NAFTA - or should it bother? Mahoney, Stewart and Parkin weigh in.
November 14, 2017
A recent series of lectures in Toronto might help Prime Minister Trudeau's search for an path towards reconciliation with Canada's First Nations.
November 12, 2017
Justin Trudeau's fundraiser and former Liberal PMs Jean Chretien and Paul Martin are linked to companies with holdings in offshore tax havens. Mahoney, Stewart and Parkin debate.
November 08, 2017
While populists in some countries say immigration and freer trade have caused inequality inside nations, globally it's a different story. More migration helps.
November 06, 2017