The Financial Accountability
Office of
Ontario recently issued a report called Incomes in Ontario:
Growth, Distribution and Mobility which summarizes recent trends in personal
income in Ontario in the areas of income growth and distribution. Among the findings were that Ontario’s median
income growth was the slowest among the provinces between 2000 and 2016, that there
has been an increase in income inequality in the province, and that relative
and inter-generational income mobility
has declined – that is over time, it has become more difficult for lower income
Ontarians to move up the income distribution and that children of higher income
parents are more likely to become high income earners themselves.
As the report states:
“It has become more difficult for Ontarians
to “get ahead” – that is, move up the income distribution. In this report,
upward income mobility is defined as the share of working-age Ontarians who
move up at least one income quintile over a five-year period. This share
declined from 41 per cent in the early 1980s to 32 per cent more recently. The
decline was most pronounced for lower-income Ontarians.” Moreover, what is also of interest is that
while Ontario’s productivity has grown, incomes have not kept pace suggesting
that Ontario’s economic growth has not translated directly into increased
personal incomes.
Much of this report
focused on Ontario wide trends but one of the most interesting pieces of
information is Figure B.1 in the appendices - a map titled Median
household income across census divisions in Ontario. In this map, median household income from the
2016 Census is plotted by major census division in Ontario in four categories –
Less than $65,000, $65,000 to $69,999, $70,000 to $74,999 and finally more than
$75,000. The map taken from the report
is shown below and illustrates Ontario’s great regional economic divides.
Ontario’s highest
household income regions stand out as mainly two islands on the map – the area
surrounding downtown Toronto – that is the GTA and central Ontario – and the
Ottawa region. Downtown Toronto itself
has substantially lower household incomes than the surrounding GTA and GTA belt
area. The east and the southwest have swathes of lower income areas and then
there is the North.
Ontario’s North is
generally characterized by lower median household incomes. The pocket of the north with the highest
household incomes is the Sudbury region – the rest falls into the two lowest
categories – that is, median household incomes of below $70,000. Indeed, the 2018 BMA Municipal Study provides
some substantial detail on household incomes in Ontario. In
2018 they ranged from $127,780 in the GTA to $82,613 in Eastern Ontario –
difference of 35 percent. They were
second lowest in northern Ontario municipalities at $84,288 – a 34 percent
difference.
Compare the average
household income in the Toronto bedroom communities of Oakville at $179,132 or
Pickering at $124,559 to the northern Ontario five major cities – North Bay
($82,320), Greater Sudbury ($97,604), Sault Ste. Marie ($82,955), Timmins
($96,423) and Thunder Bay ($87,350).
While these five major northern cities do not have the lowest incomes of
major Ontario municipalities, they are generally ranked as low-mid income
centers. Indeed, of the six Ontario regions
summarized in the BMA study, the north is the only region without any
municipalities ranked as “high” household income cities.
On April 11, Ontario
will release its budget – the Ford government’s first. While this budget would be well advised to
deal with pressing issues in the public finances such as providing a timetable for balancing the budget, as well as
meeting the demand for public services in health and education,
it also needs to address regional development issues and in particular its
north. The northern Ontario economy’s
poor economic performance has resulted in the north becoming a region with some
of the lowest household incomes in the province mainly because it does not have
as many employment opportunities as the rest of the province. Unemployed or underemployed household members
mean a lower household income – its that simple.
What should Ontario do
to help stimulate the northern Ontario economy?
Well, the north’s comparative advantage is its resource base – the land,
water, trees and mineral resources of the region. Yet, the last two decades have seen the
province restrict the ability of the region to responsibly use its resource
base to help create economic opportunity.
Jobs in Northern Ontario’s resource sector create the income and
employment growth that will foster further deepening of the economy by
expanding population, increasing market size and offering new opportunities for
local businesses to serve this market.
So, what should the
provincial government do on April 11th specifically to help the North? Briefly:
1.
Repeal the
Far North Act which has sequestered 225,000 square km of the region’s 806,000
square km area land base from development – nearly 30 percent.
2.
Foster
skills, human capital acquisition and entrepreneurship training for Indigenous youth as
they are the North’s fastest growing demographic.
3.
Free up
crown land to facilitate new cottage/camp development in the north in areas one
to two hour drives away from major communities in order to boost tourism.
4.
Improve
the consultation process with First Nations so resource development can proceed
more smoothly and quickly.
5.
Continued
infrastructure development via spending on regional highways adjacent to major
centres to improve transport connectivity.
6.
Work with
northern Ontario universities and colleges to attract more international
students given that many students are helping address labour shortages in the service sector in the short-term and in the long-term are often likely to remain where educated,
thus boosting long-term migration rates into the north.