In late January, days before the Ontario election was called, Abacus Data surveyed more than 1,000 Ontarians who were eligible to vote, asking: what issues would you most like to see debated? While one issue — dealing with the impact of Donald Trump’s tariffs — is recent, the other answers pointed to ongoing provincial problems. A team of Star journalists set out to answer: how is Ontario doing now, as compared to our last election? Today, we look at how to grow the economy and create good jobs, an issue selected by 26 per cent of respondents.
Doug Ford often touts his track record of creating good jobs and powering the provincial economy. Ontarians struggling with high interest rates and unemployment might be skeptical.
Many economists say Canada is on the verge of recession with U.S. President Donald Trump’s punitive tariffs threatening to hobble an already weak economy.
Yet, three years ago when the Ford government was re-elected, the economy was on fire.
National jobless levels in the summer of 2022 were at record lows while inflation ran rampant, peaking at eight per cent (it’s now at 1.8 per cent as of December.)
Back then, Ford vowed to improve employment opportunities and affordability for Ontarians.
And while there’s only so much provincial governments can do in response to national and global macroeconomic trends, the question of whether Ford helped the Ontario economy during a challenging post-pandemic recovery is still valid.
Some economists and public policy experts believe the province could have better spent its resources to support the prosperity of Ontarians.
Don Drummond, an economist and professor at Queen’s University, warned against Ontario’s high levels of debt relative to economic growth.
“We desperately need to improve the competitive position of the Ontario and the Canadian economies,” said Drummond, “all the more so if we’re not going to have a special trade arrangement with the United States.”
The Star reached out to the Ministry of Economic Development, Job Creation and Trade for comment, but did not receive a response.
Like other provincial economies, Ontario’s has been slowing since the Bank of Canada began raising interest rates in March 2022 in a bid to cool inflation.
Ontario’s real gross domestic product (GDP) growth — the broadest metric of economic activity — came in slightly ahead national growth rates between 2018 and 2023, according to data from the Ontario Ministry of Finance. That, however, doesn’t mean Ontarians have been doing better than the rest of Canadians on an individual level.
That’s because real GDP growth does not account for the population boom Ontario saw in recent years — a trend that has been largely attributed to federal policies around immigration.
Simply put, more people working in the economy means it naturally produces more as a whole.
In fact, provincial population growth has surpassed economic expansion, creating a feeling of “stagnation,” according Brian Lewis, a fellow at the University of Toronto’s Munk School of Global Affairs and Public Policy and former chief economist at the Ontario Ministry of Finance.
“The numbers look good,” said Lewis, “but not when you take into account how many people we’ve added. The per capita numbers are all poor.”
Real GDP per capita — the level of economic production per person — has continued to decline relative to pre-pandemic levels, according to the Ontario Chamber of Commerce (OCC).
“In other words, each Ontarian, on average, is producing and earning less after accounting for inflationary effects which contributes to lower living standards and overall economic well-being,” the chamber wrote in its annual Ontario Economic Report, which described the overall state of the economy as fragile.
Going forward, the OCC believes the province should focus on improving business investment in things like software and machinery, as well as reducing interprovincial trade barriers, both of which, in theory, could boost economic output per Ontarian and individual financial well-being.
Ontario saw a remarkable number of jobs — more than 400,000 positions — created since Ford’s re-election.
And wages continued to grow as they catch up with post-pandemic inflation and job vacancies, according to the Financial Accountability Office of Ontario.
But the unemployment rate — the number of unemployed people expressed as a percentage of the labour force — has been creeping up, reaching 7.6 per cent in Ontario last January from 5.1 per cent in June 2022.
“The employment record is not bad,” said Drummond. “Focusing on the unemployment rate is deceiving because it just reflects this extraordinary, unprecedented growth in the population,” he added.
Meanwhile, as the federal government works to curb immigration, Ontario could see labour shortages worsen in the future, according to the OCC.
Ultimately, Drummond thinks policies such as alcohol liberalization or delivering $200 tax rebate cheques didn’t help or hinder economic growth and job creation in the province.
“The great shame from my perspective is, they wasted valuable public resources that could have been used to help it.”
