An Assessment of Recent Economic Performance and Business Investment Growth in Ontario

Summary

• Over the first two decades of the 21st century, Ontario has been mired in a prolonged period of slow economic growth.
• This bulletin provides the context for this situation by examining the extent of Ontario’s economic weakness since the turn of the century while paying particular attention to economic growth, job creation, public finance performance, and business investment in the province.
• Ontario has underperformed relative to its own recent past. The province’s economic growth was substantially faster in the 1980s and 1990s than in the 2000s and 2010s.
• Ontario has also underperformed relative to other jurisdictions in North America. The province’s average rate of economic growth from 2000-2019 was weaker than in the other large Canadian provinces and nearby American states in the Great Lakes region.
• Ontario has also been near the bottom of the Canadian pack in business investment. The province’s rate of average annual inflation-adjusted business investment growth from 2000- 2019 was the third lowest in Canada—ahead only of New Brunswick and Nova Scotia.
• Business investment is an important driver of growth and prosperity, and Ontario’s position near the bottom of the Canadian pack is therefore a negative indicator for the province’s future growth prospects.