Northern Ontario Employment Growth Lagging...And With Regional Differences

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.