A new Fraser Institute
report on recent economic and employment growth in Ontario noted
that it has
been disproportionately concentrated in the Golden Horseshoe and Ottawa
regions. Meanwhile, southwestern,
eastern and northern Ontario have lagged when it comes to employment
growth. Indeed, as the accompanying
figure from the report below shows: “Average
annual net employment growth has been negative in Eastern and Northern Ontario
between 2010 and 2015. Average employment growth in Southwestern Ontario during
this time has been positive, but only barely (0.4% annually)”.
What is
surprising is how relatively little attention the report received in northern
Ontario from media outlets and local community economic and business leaders
given the usual preoccupation with the northern Ontario economy. The results of the report are more important
than one might expect because the negative aggregate employment performance of
northern Ontario is being driven largely by northwestern Ontario. The two largest urban economies in northern
Ontario are representative of this differential performance.
Figure 2
presents monthly seasonally adjusted employment for Thunder Bay (with fitted linear
trend) for the period 2001 to 2016 while Figure 3 does the same for Greater
Sudbury (Data source: Statistics Canada). Over the long term, the two
cities have travelled different roads with employment growing in Greater
Sudbury while it has shrunk over time in Thunder Bay. While employment growth
has slowed in Sudbury since 2010 while the decline appears to have flattened out in Thunder Bay, the long-term performance relative to Thunder
Bay still stands out. The long-term effects of the forest sector crisis in Thunder Bay appear to have been a permanent downsizing of the employment base.
Of course, one might want to counter with the
argument that unemployment rates in Thunder Bay and indeed the northwest are
quite low but this is misleading. The
fact is that the labour force has been shrinking along with employment over the
last decade in Thunder Bay hence improving the unemployment rate. A shrinking employment base is not generally
a cause for celebration even if it comes with falling unemployment rates. More on this in posts to come.
