Fraser Forum

Income numbers tell tale of economic decline in Windsor and London

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Income numbers tell tale of economic decline in Windsor and London

Southwestern Ontario has been under severe economic pressure in the 21st century, with a rapid decline in manufacturing in the late-2000s, a brutal recession in 2008/09 and a tepid recovery in the following years. These developments have transformed Southwestern Ontario from one of Canada’s most prosperous regions to well below the national average in recent years.

Southwestern Ontario’s brutal 21st century can make it easy to forget that it was a high-income region (compared to other regions in Canada) in the relatively recent past. In a new study published by the Fraser Institute, we analyzed the evolution of household income from 2005 to 2019 (the latest year of available pre-COVID data) and found that Windsor and London, two large cities far removed from the Toronto commuter shed, were among the worst performers in Canada for median household income growth.

Specifically, from 2005 to 2019, the national median household income grew (adjusting for inflation) by 11.1 per cent compared to 5.4 per cent in Ontario. But things were even worse in London, which barely had any growth (0.5 per cent) and Windsor where median household incomes actually fell by 7.1 per cent.

Unsurprisingly, both cities tumbled down the rankings of Canadian cities on this metric. In 2005, among Canada’s 41 Census Metropolitan Areas (CMAs), Windsor had the 11th-highest median household income. In 2019, it had fallen to 33rd. It was a similar story in London, which fell from at 13th to 28th during the same time period. In other words, over a 14-year period, Southwestern Ontario’s two largest cities went from the top third of Canadian CMAs to the bottom third for median income.

This important provincial and national economic challenge is often overlooked, perhaps in part due to the proximity of these cities to the metropolis of Toronto, which causes them to be mistakenly viewed as small cities. In other contexts, they would be viewed as important provincial or even regional centres. For example, Windsor is bigger than any city in Saskatchewan, New Brunswick, Newfoundland and Labrador or Prince Edward Island. London has a population similar to Halifax. Southwestern Ontario as a whole is around the size of the Maritimes. The statistics cited above are not a story of an assemblage of small towns that have struggled but rather one of large struggling cities with millions of Canadians.

Southwestern Ontario remains an important part of Canada’s economy. But it’s taken a step back over the past two decades. As a large region, bigger than many provinces, the fate of Southwestern Ontario should be on the national radar. The cities further afield from Toronto have had a particularly difficult century so far. Windsor and London should not be an afterthought in our national economic discourse.

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