Ontario's Economic Decline: A Threat to Canada's Prosperity

Strategic Insights -

Ontario, once Canada's economic powerhouse, is facing a perfect storm of challenges that threaten its long-term prosperity. The province, which accounts for nearly 40% of Canada's population and economy, has seen its once-thriving manufacturing sector shrink dramatically, with over 200,000 jobs lost in the past century. The sector, which once accounted for 18% of Ontario's economy, now contributes a mere 11%. This decline has led to an unemployment rate above the national average, with 7.9% of Ontarians without a job in May, compared to 7.0% nationally.

Key Takeaways:

  • Ontario's farm population is declining at a rate above the national average, dropping by 2.5% between 2016 and 2021, compared to 1.9% nationally (Statistics Canada).
  • The province's financial services industry is in steady decline, with Toronto ranking 23rd in the Global Financial Centres Index, down from 13th place in 2009.
  • Manufacturing, which once drove Ontario's economy, now accounts for just 11% of the province's economy, down from 18% (data from the Fraser Institute).
  • Ontario's GDP growth consistently lags behind the national average, with a 1.2% growth rate in 2024, compared to the national average of 1.6%.
  • The provincial government received $576-million in equalization payments from Ottawa in 2024, a reversal of the trend in the 1950s that saw poorer provinces receive support from wealthier ones.
  • The Ontario government's Financial Accountability Office predicts that Trump tariffs could knock 2 percentage points off Ontario's GDP by 2029, costing 137,900 jobs.

Statistics:

  • 200,000: The number of manufacturing jobs lost in Canada in the past century, with the majority located in Ontario.
  • 7.9%: Ontario's unemployment rate in May, above the national average of 7.0%.
  • 1.2%: Ontario's GDP growth rate in 2024, lagging behind the national average of 1.6%.
  • 2.5%: The decline in Ontario's farm population between 2016 and 2021, above the national average of 1.9%.
  • 576-million: The amount of equalization payments received by the Ontario government from Ottawa in 2024.
  • 137,900: The number of jobs predicted to be lost as a result of Trump tariffs, according to the Financial Accountability Office.
  • 23rd: Toronto's ranking in the Global Financial Centres Index, down from 13th place in 2009.

Sources:

  • Statistics Canada
  • Fraser Institute
  • The Globe and Mail
  • Ontario's Financial Accountability Office
  • The Canadian Press