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For Ontario, everything's coming up trilliums

Briefing highlights

  • Ontario boasts stronger growth, job creation
  • Global stocks on the rise so far
  • Markets await Trump news conference
  • Magna sees 2017-19 sales, production gains

Ontario's moment in the sun

To twist the lyrics of the old song, everything seems to be coming up trilliums in Ontario.

Its economic growth is among the fastest in the country, it’s churning out jobs, and people are flooding into the central Canadian province.

The latest numbers put Ontario’s economic growth at an annual pace of 2.6 per cent in the third quarter of 2016, up from a tepid showing in the previous three-month period.

“All told, the result was a touch stronger than we were expecting, and calls in a tick of upside risk to our estimate of 2.5-per-cent growth for all of 2016,” said BMO Nesbitt Burns senior economist Robert Kavcic.

Analysts believe Ontario trailed British Columbia in growth last year, but that’s going to change as B.C. sufffers a marked slowdown in a housing market that has buoyed its economy.

Which means 2017 will be Ontario’s moment in the sun in the absence of a shock.

In its latest provincial outlook, Royal Bank of Canada predicts Ontario will share top spot with Manitoba this year, with growth of 2.3 per cent.

“We expect that most major sectors of the economy will chip in to sustain a fairly brisk tempo (by the new, slower global standards): We anticipate consumers to remain quite active (motivated by solid job creation and the wealth effect from rising property values); governments to ramp up spending on infrastructure; and businesses to boost investment in non-residential structures, and machinery and equipment,” said RBC senior economist Robert Hogue.

Like other economists, though, RBC expects the housing market to cool from its torrid pace amid new federal tax and mortgage measures. There are also questions surrounding Ontario’s exports as their fate may lie in the hands of a protectionist Donald Trump.

And thus RBC projects the pace of economic growth will decline to 1.9 per cent in 2018, slipping down in the rankings as Alberta and Saskatchewan rebound from the oil shock and Manitoba continues to hold its own.

As for jobs, Ontario created about 81,000 positions last year, according to Statistics Canada, though the bulk of them were part-time.

Still, the province’s jobless rate, at 6.4 per cent, sits below the 6.9-per-cent national average, and many of its cities boast unemployment that is among the lowest in the country.

“We expect to see the further creation of approximately 70,000 additional jobs in the province in 2017, thereby maintaining downward pressure on the unemployment rate and bolstering household confidence,” said Mr. Hogue.

“Such constructive labour market conditions bode well for consumer spending remaining a key contributor to growth in the year ahead.”

Which may be why so many people want to move to Ontario from other provinces.

The latest interprovincial migration numbers show that almost 12,000 Canadians headed to Ontario, on a net basis, in the third quarter, marking the highest flow in almost three decades.

“What has helped?” said BMO’s Mr. Kavcic.

“A very positive turn in relative economic and employment growth since the oil price collapse; and wage differentials narrowing versus those in Alberta, which had long been a big draw of migrants.”

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