Ontario’s lost decade of job creation

Toronto and Ottawa are thriving but as long as large regions of Ontario struggle, the province and the country won’t meet their full economic potential

By Ben Eisen
and Steve Lafleur
The Fraser Institute

Ontarians have suffered more than their share of economic pain over the past 15 years. For much of the 2000s, the province’s manufacturing sector was struggling and then the 2008-09 recession made things much worse. In the years that followed, the province’s recovery was unfortunately tepid.

Ben Eisen
Ben
Eisen

This pain, however, has spread unevenly across the province. Toronto (and its surrounding area) and Ottawa have been spared the worst of the economic damage.

But if you look outside the province’s two largest metropolitan areas, you’ll find that large numbers of Ontarians have suffered even more than statistics suggest.

In a recent study, we analyzed job growth between 2008 and 2018 (the latest year of comparable data) in Ontario’s 15 largest population centres. We found that 91 per cent of all net job creation in Ontario took place in the Greater Toronto Area (GTA) and Ottawa, compared to nine per cent in the rest of the province.

Steve Lafleur
Steve
Lafleur

Between 2008 and 2018, the number of jobs in increased by 17.3 per cent in the GTA and 9.7 per cent in Ottawa, compared to just 1.9 per cent in the rest of the province.

So outside of Toronto and Ottawa, there was almost no net job creation over 10 years.

When we discuss weak economic performance outside of Toronto and Ottawa, we’re not just talking about small towns and rural areas. Other major population centres have stagnated.

Consider that southwestern Ontario, which has experienced weak job growth and has approximately as many residents as the Maritime provinces combined. London is about the same size as Halifax.

Northern Ontario, which also experienced slow rates of job creation during the 10 years, is more populous than any individual Maritime province.

Poor net job-creation rates in Ontario (outside Toronto and Ottawa) is not only an important story for the provincial economy but also for the national economy. As long as large and populous regions of Ontario struggle, the province and the country will be unable to meet their full economic potential.

Of course, job creation in Toronto and Ottawa is good news. But a deeper look outside the two largest cities reveals a lost decade with respect to job growth.

Hopefully as provincial and federal policy-makers become more aware of the magnitude of Ontario’s economic woes, they will recognize the need for pro-growth policies. Such policies can help spur job creation, wage growth and prosperity for Ontarians, no matter where they live in the province.

Ben Eisen and Steve Lafleur are analysts at the Fraser Institute

Ben and Steve are Troy Media Thought Leaders. Why aren’t you?

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Ontario economic woes, job creation

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Ben Eisen

Ben Eisen

Ben Eisen is a Senior Fellow in Fiscal and Provincial Prosperity Studies and former Director of Provincial Prosperity Studies at the Fraser Institute. He holds a BA from the University of Toronto and an MPP from the University of Toronto’s School of Public Policy and Governance. Prior to joining the Fraser Institute Mr. Eisen was the Director of Research and Programmes at the Atlantic Institute for Market Studies in Halifax. He also worked for the Citizens Budget Commission in New York City, and in Winnipeg as the Assistant Research Director for the Frontier Centre for Public Policy. Mr. Eisen has published influential studies on several policy topics, including intergovernmental relations, public finance, and higher education policy.

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