Northern Economist 2.0

Tuesday, 4 April 2017

Evaluating Northern Ontario's Growth Plan-Part II: Employment Generation

This is the second in a series of posts in which I will present evidence in an attempt to evaluate the Growth Plan for Northern Ontario, which was released on March 4, 2011.  The 25-year plan was to guide provincial decision-making and investment in northern Ontario with the aim of strengthening the regional economy and its ultimate goal was to strengthen the economy of the North by:
  • Diversifying the region's traditional resource-based industries
  • Stimulating new investment and entrepreneurship
  • Nurturing new and emerging sectors with high growth potential.
While the provincial government did commit itself to the development of performance measures for ministry specific initiatives that supported the implementation of the plan, I will be using a broader set of indicators of overall economic performance that are supported by the availability of readily accessible public data. In this first post, I will be looking at employment.

In the end, economic growth needs to translate into employment opportunities and job creation and so the question is whether population and employment in northern Ontario is greater now than in 2011?  Economic growth and opportunity should attract people to northern Ontario as well as reduce out-migration. The data is available from Statistics Canada, specifically: Table 2820122 - Labor force survey estimates (LFS), by provinces and economic regions based on 2011 Census boundaries, 3-month moving average, un-adjusted for seasonality, monthly (Persons unless specified).  The data was available for northeast and northwest Ontario and was aggregated to provide evidence for northern Ontario as a whole.

Figures 1-5 present monthly data with a linear trend line for population aged 15 years and over, full time employment, part time employment, the labor force and the unemployment rate.  This is done to provide complete evidence on the trend over the six-year period.  Figures 6-10 provide evidence for the same series but only aggregated for the years for 2011 and 2016 to facilitate a comparison between start and end.

Figures 1-5 suggest that while there are seasonal ebbs and flows to these variables, there has generally been a downward trend in population, as well as both full and part time employment.  Moreover, the labor force has also shrunk over time.  However, the unemployment rate has actually managed to trend slightly downwards between 2011 and 2016 which on the surface should be seen as positive news.



Figures 6-10 provide a more convenient snapshot of the changes over the period the Growth Plan has been in effect to date.  Between 2011 and 2016, the population aged 15 years of age and over in northern Ontario declined from 637,642 to 627,792 for a drop of 1.5 percent.  Full-time employment in northern Ontario declined from 284,083 jobs in 2011 to 278,717 jobs by 2016 for a percent drop of 1.9 percent.  Part-time employment fell over the same period from 75,433 jobs to 68,883 jobs or a drop of 8.7 percent.  Meanwhile, the labor force fell from 390,133 to 374,450 for a drop of 4 percent.  Total employment fell from 359,517 to 347,600 for a drop of 3.3 percent while the labor force shrank by 4 percent.  The labor force shrinking faster than employment helps explain why despite the downward trend in job creation, the unemployment rate actually falls from 7.8 percent to 7.2 percent between 2011 and 2016. 

This evidence suggests that despite the presence of a growth plan designed to boost the economy of the region, there has not been an upward trend in employment.  While a falling unemployment rate is positive news, it appears to be the result of the labor force shrinking faster than employment.

Stay tuned. More to come in my next post on this subject.

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