Why many parts of Ontario feel left behind

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Appeared in the Ottawa Sun, April 11, 2018

In 2017 Ontario enjoyed one of its strongest recent years of overall economic growth. The Wynne government sent out rosy press releases celebrating the province’s success.

But there were two big problems with the government’s rhetoric on the economy last year, and reasons they seemed disconnected from the reality of many Ontarians’ lives. First, the upbeat tone seemed oblivious to the historical context—a context in which the province’s economy had been struggling for a long time.

Consider the decade leading into 2017—the years from 2007-2016. Over this period, Ontario’s performance was lackluster. A recent Fraser Institute study shows that across several economic indicators, Ontario lagged well behind the national average. For inflation-adjusted economic growth per person, private-sector job creation, and median household wage growth, Ontario finished near or at the bottom of the pack of Canadian provinces.

Even with better growth in 2017, many Ontarians were and are still feeling the aftereffects of these years. For young adults, that may have meant a tougher time finding that first job, and a slower start up the economic ladder. For other Ontarians, periods of unemployment or slower-than-hoped-for wage growth may have made it much harder to save for retirement.

The appropriate framing for the growth in 2017 would have been to welcome the green shoots while recognizing how much more growth is needed to make-up for lost time. Instead, we heard rhetoric implying that Ontario was once again one of the most prosperous places in North America, when it fact there’s still much work to be done.

Moreover, looking at Ontario’s economic statistics through rose-coloured glasses makes it easy to miss the severity of suffering over the last decade outside of Toronto and Ottawa. A look at the regional data shows that many regions have had a more difficult economic decade than it might appear if looking solely at provincial economic statistics.

As another recent Fraser Institute study documents, net job growth over the past decade has been heavily concentrated in Toronto and Ottawa. Indeed, between 2008 and 2016, these two urban areas accounted for 99 per cent of all net job growth. While some other specific regions gained jobs, if you take the rest of the province as a whole (excluding Toronto and Ottawa), there has been almost no net job growth for a decade.

The weakness of Ontario’s economy outside Toronto and Ottawa looks even worse in a national context. Out of all Canada’s large urban areas, just four experienced more job losses than job gains from 2007-2017—and all of them are in Ontario (Peterborough, Greater Sudbury, Thunder Bay and London). Among the large urban areas that had some growth, St. Catharines-Niagara and Windsor had the lowest and third lowest growth rates respectively. In other words, of the seven large urban areas with the weakest job growth, six were in Ontario.

Of course green shoots should be celebrated, but we should not lose sight of how much pain the past decade has produced and how many families still struggle with the consequences. What Ontarians need is more action from their government to spur economic growth, entrepreneurship and job creation. Not more press releases claiming credit for the brief uptick in growth over the past 18 months.

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