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Ontario losing status in Canada in employment

TORONTO - A Statistics Canada analysis showing Ontario's status as the country's economic engine has been in decline since the current Liberal government was elected in 2003 should come as no surprise, the province's opposition parties said Wednesday.

Ontario's biggest losses have come in the battered manufacturing sector, which has shed 255,000 jobs in the past 10 years to 654,200, StatsCan said Wednesday.

"The Liberals have done nothing to try to maintain manufacturing jobs or reposition our manufacturing sector," said NDP Leader Andrea Horwath.

"The government kept talking about service jobs and knowledge economy jobs and acting as if manufacturing wouldn’t have a role to play in Ontario.

"So it’s not surprising, looking back at the decade of Liberal rule, to see that manufacturing has slipped away in such large numbers."

The Progressive Conservatives said there was a direct link to Ontario's dwindling economic status and the policies of the Liberals.

"The perception is that we’ve gone downhill and the reason is because we have," said PC finance critic Peter Shurman.

"I think it’s directly a corelation of the McGuinty government, and it is absolutely true."

Once the top employer in the province, manufacturing was surpassed by the retail sector in 2009, and now faces a challenge for second place from health-care and social assistance employees.

Economic Development Minister Brad Duguid said the manufacturing sector was on the rebound, up 7.8 per cent for the first seven months of 2012. Ontario has created 130 per cent of the jobs it lost during the recession, compared with only 50 per cent in the United States, added Duguid.

"Manufacturing is coming back, and it’s being led in many ways by an auto sector that’s back to pre-recession levels for exports, close to pre-recession levels in production and is currently experiencing its highest vehicle sales in over a decade," he said.

"For anyone to suggest Ontario’s economy is either going in the wrong direction or is not in a place where we have an opportunity to be a global leader, they’re just misinformed."

However, the opposition said a big part of the problem under the Liberals has been the growth of public sector jobs while private sector jobs are lost.

"The Liberals engage in fun with figures all the time; they are never responsible for anything but the good stuff, and never take it on the chin for the negative trends," said Shurman.

"They have created 300,000 net new public sector jobs while presiding over the loss of 300,000 job losses in the private sector."

The numbers from Statistics Canada are not surprising, said economist Jimmy Jean of Desjardins Capital Markets, given the precipitous decline of manufacturing in Ontario.

"The manufacturing sector is the major concern and right now it resonates with the lower demand from the U.S.," he said. "In this context, you would expect that will play into lower income prospects and salaries."

The government numbers suggest that is happening. The agency's September report notes that Ontario has experienced below average growth in earnings the past two years.

Statistics Canada said Ontario still has by far the largest share of payroll workers with 5.8 million non-farm employees, but as a share of the 15.3 million workers in Canada, Ontario's portion has fallen to 38 per cent from 39.2 per cent.

Ontario's employment decline has been mirrored in the quality of jobs. Statistics Canada said average weekly salaries in Ontario rose 2.4 per cent to $908.59, but the increase is below the national average gain of 3.4 per cent.

In terms of average weekly wages, Ontario is just above the national average of $902.29, but bested by Alberta, Saskatchewan, Newfoundland, the Yukon, Northwest Territories and Nunavut.

Jean said despite the criticism levelled at proponents of the Dutch Disease analysis — that commodity-driven appreciation of the dollar undermines manufacturing — the data suggests the loonie's strength is at least partially responsible for what is occurring in Ontario, and to some extent Quebec as well.

"There are many factors, including globalization (for manufacturing's decline) ... but when you look at those trends, it's very hard to be fully convinced that Canada is not indeed suffering from the Dutch malaise," he said.

A separate analysis from the Conference Board also released Wednesday speculated that Canadian dependence on the U.S. market for exports will continue to wane, with the unfavourable currency exchange being partly responsible.

"We expect that Canada’s share of its goods trade to booming China will expand from three to almost seven per cent by 2025," the think-tank said.

"Canada’s share of goods exports to the U.S. will decline from 74 per cent in 2010 to 68 per cent by 2025, and the exchange rate’s trajectory will be a key factor in this case."

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