NORTHERN ECONOMIST 2.0
An Ontario economics and policy blog.
Northern Economist 2.0
Friday, 3 November 2017
Left Behind
The good news continues for the Canadian economy as the latest job numbers from
Statistics Canada
show a net increase in employment of 35,000 jobs in October. Indeed, one has to wonder why the Bank of Canada does not go out and raise interest rates a bit more given that should the economy slowdown it would give them some scope to lower rates to counteract the slowdown. At the moment we have large deficits at the federal level and low interest rates - really, how much more direct stimulus does the Canadian economy need at this point? What do we do if the economy goes into recession?
For Ontario, however, the picture is more mixed as employment there was virtually unchanged.
Indeed, over half of the net employment growth in Canada came from Quebec and most of the remainder from Alberta.
Ontario’s employment story got another interesting assessment from a
Fraser Institute Report
showing that almost all the recent employment growth in Ontario has been concentrated in the Toronto and Ottawa areas.
Many of the CMAs outside of these two regions experienced employment declines. The figure below taken from the Fraser Institute report shows that quite a few Ontario CMAs - including all of those from northern Ontario saw employment drops.
Needless to say, when it comes to employment Ontario very much seems to have become a two-track economy with the North, East and Southwest portions of the economy not doing as well as the Toronto-Ottawa core. A notable exception is Windsor which has managed to create employment since 2008 despite the manufacturing downturn. Some of the cities that have been doing well - Guelph, Oshawa and Kitchener-Waterloo-Cambridge are all part of that area within direct and short range of the GTA.
Yet, the October numbers suggest Ontario as a whole has slowed down in terms of job creation even in the Toronto-Ottawa core. This does not bode well for the effects of the minimum wage increase coming in January. If an employment slump continues, it also introduces a new dynamic into the provincial election coming in June. If the feeling of being left behind gains momentum even in previously economically buoyant areas such as the GTA then the prospects for political change will rise.
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