Ontario’s Long-Term Report on the Economy is a long-range assessment of Ontario’s economic future. Looking beyond Ontario’s current economic and fiscal environment helps the government make sound decisions for the future. It is important to assess the broad trends stemming from today’s policy decisions and demographic indicators that will shape Ontario’s economic and social environment in the years to come.

The government is committed to being one of the most open and transparent governments in Canada. The Fiscal Transparency and Accountability Act, 2004, requires the Province to present this long-range assessment to Ontarians. This is the third long-term outlook and much has changed since the first was released in 2005.

In 2008–09, the global recession affected all major economies around the world. In Ontario, real gross domestic product (GDP) declined by almost five per cent and employment dropped. Ontario’s manufacturing sector was particularly hard hit.

However, through the Province’s measures to stimulate the economy, Ontario is emerging stronger. Real GDP is almost 10 per cent higher than the recessionary low, and as of the third quarter of 2013, real GDP was 4.5 per cent above its pre-recession peak. Ontario has created almost 450,000 net new jobs since the recessionary low, all full time.

While a recovery is underway, it is not as robust as was earlier expected. Economic growth in many countries around the world continues to be moderate. In that context, this report lays out a number of challenges and opportunities for the future.

  • The Ontario population continues to age and the core working-age group
    (aged 15–64) is growing at a slower pace.
  • As the growth of Ontario’s labour force slows, stronger productivity gains will be increasingly important to ensure future prosperity.
  • The number of Ontario seniors is projected to nearly double to 4.1 million by 2035 and their share of the population will be 23.8 per cent, up from 15.2 per cent in 2013.
  • Ontario faces increasing global competition, especially from emerging economies.
  • Rapid technological change has the potential to raise productivity and living standards but could also significantly alter the capacities that are needed for employment. 
  • Expansion of global trade is making goods and services more affordable for consumers.

Other factors this report identifies include resource prices that are likely to rise as the demand from global economic growth outstrips the discovery of new supplies. Interest rates are also expected to rise from historic lows as economic growth improves.

There are serious issues with the retirement income system in Canada. Currently, a significant portion of the population is not saving enough for retirement. It is estimated that more than 35 per cent of households could face a diminished standard of living in retirement, with middle-income earners and younger workers being most at risk.

Adequate personal savings, efficient investments, and better access to pension plans will better enable Ontarians to prepare for when they move from work to retirement. Over the longer term, higher retirement savings would also have a positive impact on the Ontario and national economies, by increasing the national savings rate, thereby contributing to higher investment and stronger economic growth. As a result, the government has announced that it is moving forward with a made-in-Ontario retirement income system to help Ontarians supplement their savings.

Globally, challenges exist, and the government, led by Premier Kathleen Wynne, is confident it can meet and overcome these obstacles. That is why it introduced a bold plan that invests in people, builds modern infrastructure, and supports a dynamic and innovative business climate.

This plan will help the Ontario economy continue to grow, create jobs and help provide the necessary revenues to eliminate the deficit. The government is taking a balanced approach to eliminating the deficit by 2017–18. It will not sacrifice important public services to meet short-term targets. Investments in infrastructure, health and education will help improve economic and productivity growth as companies and workers seize opportunities in the new global economy. Ontario is also continuing to create a strong economic climate based on competitive taxes, an effective regulatory system, a skilled and healthy workforce, and large investments in modern infrastructure.

In a few weeks, I will be tabling my 2014 Ontario Budget, which will show further resolve to make the investments necessary to build opportunity today and secure a stronger future.

(Originally signed by)

The Honourable Charles Sousa
Minister of Finance