A Tale of Two Provinces: Economic and Fiscal Performance of Ontario and Quebec in the 21st Century

— Published on November 13, 2024

Since 2000, Quebec’s real per-capita GDP has grown at an annual average of 1.2 percent, while Ontario’s has grown at 0.7 percent—both below the Canadian average.
Ontario and Quebec’s real per-capita GDP are decidedly mid-ranked among Canada’s provinces, with Ontario slipping from second to the middle of the pack from 2000 to 2022.
Quebec’s economic growth has closed much of the historic income gap with Ontario but mainly because Ontario has been a laggard with respect to economic growth for most of the 21st century.
Ontario and Quebec lag behind the Rest of Canada in productivity and growth-enhancing business investment, particularly non-residential investment.
Over the period 2000 to 2023, Ontario has run a deficit 19 out of 24 years—or nearly 80 percent of the time. Quebec, on the other hand, has improved its fiscal management relative to Ontario and runs a deficit 14 out of 24 years or nearly 60 percent of the time.
Quebec has lowered its net debt-to-GDP ratio substantially since 2013, while Ontario has remained stuck near 40 percent.
When it comes to public finances, Ontario has, to some extent, become the new Quebec, and Quebec the old Ontario.
Ontario and Quebec face ongoing challenges on both the economic and fiscal fronts due to their relatively low economic and productivity growth.