Unfinished Business: Ontario since the Great Recession
In its 17th Annual Report, Unfinished Business: Ontario since the Great Recession, the Institute for Competitiveness & Prosperity takes a retrospective look at how the province’s economy has fared since 2000, emphasizing the impact of the 2008-09 Great Recession on Ontario, and how the province has since recovered.
As in past Annual Reports, the Institute analyzes the Gross Domestic Product (GDP) per capita in Ontario compared to the median of its peers, known as the prosperity gap. Specifically, this Annual Report analyzes fluctuations in the prosperity gap as they relate to the impacts of the Great Recession. The primary driver of Ontario’s prosperity gap remains lagging productivity, which reduces prosperity by $7,000 per capita despite the province’s strong age profile, worker intensity, and high labour force utilization.
Honing in on trade and innovation policy as two areas where policy measures could be used to address productivity, the Institute makes several recommendations to the government of Ontario to improve competitiveness:
- Increase international exports from the service sector;
- Facilitate greater interprovincial trade;
- Increase support for private sector innovation; and
- Reduce regulatory barriers to foreign direct investment.
In order to gain a more complete view of the continued impact of the Great Recession, this year’s Annual Report also analyzes a wider range of metrics that, when taken together, provide a picture of Ontarians’ well-being including debt, household net worth, homeownership rates, and inter-regional mobility. The measures of well-being that affect every Ontarian tell a mixed story of where the province thrives and where more improvements can be made to bring the level of prosperity back to pre-recession levels.
Focusing on housing and social mobility, the Institute makes several recommendations to the government of Ontario to improve welfare and equity:
- Ensure our most economically prosperous regions are affordable by:
- Implementing a vacant home tax on residences in hot real estate markets that are vacant for six months per year;
- Simplifying regulations restricting new residential units; and
- Finding the ‘missing middle’ in multi-unit residential construction,
- Catalyze business-led cluster organizations to take advantage of local strengths and labour force skills, making Ontario more resilient to economic shocks;
- Increase youth attachment to the labour market by expanding work integrated learning opportunities; and
- Invest heavily in public transit.