The Ontario
government released the Growth Plan for Northern Ontario on March 4, 2011 in
response to years of slow growth and economic stagnation in northern Ontario. In an effort to improve the economy of northern Ontario, the 25-year plan was to guide provincial
decision-making and investment in northern Ontario with the aim of
strengthening the regional economy. The goal was strengthening the economy of
the North by:
- Diversifying
the region's traditional resource-based industries
- Stimulating
new investment and entrepreneurship
- Nurturing
new and emerging sectors with high growth potential.
The indicators to date are not pretty. To start, between 2011 and 2016, the
population aged 15 years of age and over in northern Ontario has declined from
637,642 to 627,792 for a drop of 1.5 percent. Full-time employment in northern Ontario declined from
284,083 jobs in 2011 to 278,717 jobs by 2016 for a percent drop of 1.9 percent. Part-time employment fell over the same
period from 75,433 jobs to 68,883 jobs or a drop of 8.7 percent. Meanwhile, the labor force fell from
390,133 to 374,450 for a drop of 4 percent. Total employment fell from 359,517 to 347,600 for a drop of
3.31 percent while the labor force shrank by 4 percent. The labor force shrinking faster than
employment helps explain why despite the downward trend in job creation, the
unemployment rate actually falls from 7.8 percent to 7.2 percent between 2011
and 2016.
With respect to investment spending, the total value of
building permits in northern Ontario from 2011 to 2016 declined from 1099
million dollars to 813 million dollars – a decrease of 26 percent. Residential permits parallel this
decline going from 528 million in 2011 to 409 million in 2016 for a decline of
23 percent. The value of industrial permits falls from 117 million dollars in
2011 to 66 million in 2016 for a percent decline of 44 percent. Commercial permits from 2011 to 2016 fall
from 257 to 198 million dollars – a drop of 23 percent. Moreover, institutional and governmental
permit values over the same period also drop of 28 percent.
The picture is somewhat brighter when one looks at consumer
and business insolvencies. Total consumer insolvencies declined from 3,659
insolvencies in 2010 to 3,397 in 2016 –a decline of 7 percent. Over the same period, the annual number
of business insolvencies in northern Ontario dropped from 89 to 31 – a decline
of 65 percent.
As for employment composition, in 2011, average monthly
employment in northern Ontario was 86,746 in goods production and 272,431
in services. By 2016, goods
employment had declined by 11.2 percent to reach 77,062 while services
employment fared better declining by only 0.9 percent to reach 269,923. Of 16 specific
employment sectors, 5 registered an increase between 2011 and 2016 while the
remaining 11 saw a decrease. The increases ranged from a high of 11.9 percent
for Accommodation and Food Services to 0.6 percent for Transportation and
Warehousing. As for the declines,
they ranged from -14.1 percent for Finance, Insurance and Real Estate Services
(FIRE) and -13 percent for Manufacturing to -0.3 percent for Wholesale and
Retail Trade. As a share of
total employment some sectors saw a small increase while others saw a small
decline, but the overall distribution of employment across sectors did not undergo
a major shift.
To date, the presence of a Growth Plan for Northern Ontario
appears to have done little to reverse the long-term decline of the northern
Ontario economy as measured by generating increases in either employment or
investment. Indeed, it is
difficult to even ascertain what the specific initiatives of the plan have
been. The purpose of the plan
appears to largely be a marketing framework within the north which to announce
the usual infrastructure and government funding projects that the province does
around the province.
Based on the first five years of evidence, it would appear
that the economic decline of the north has continued. Population is not growing, employment is shrinking and new
investment spending has also shrunk.
While business and consumer insolvencies appear to have declined, one
could argue that there has been a winnowing of more economically fragile
entities and what is now left is able to better survive in the reduced economic
circumstance.
Of course one could counter this evidence in two ways. One could argue that the Growth Plan
did have a 25-year time horizon and it is still early days for its positive
effects to be felt. Of course,
saying we need to wait another 20 years to definitely reach a conclusion merely
postpones any accountability on the part of the government. Indeed, at current rates of decline in
employment and investment, by the time the plan winds up in 2036, one might see
total employment nearly 10 percent lower than at the start and new investment
at a virtual standstill.
Another counter to this evidence might be that times are
indeed still tough in northern Ontario and despite the poor performance, in the
absence of the presence of the Growth Plan, things might have been even
worse. This requires acceptance of the counterfactual that in the absence of the plan, the
performance of the economic indicators would indeed be worse. However, this
makes the Growth Plan more a form of palliative care than an initiative for
economic growth.
To date, the Growth Plan for Northern Ontario does not
appear to be a success. It is not
even clear what the activities and actions of the plan are supposed to be given
it seems to have become simply a backdrop framework within which to announce the
usual dispensation of infrastructure and spending pronouncements. People in northern Ontario should probably be
asking more questions.
