In the past year, widespread vaccine administration and the reopening of the economy have led to a gradual rebound from the COVID-19 pandemic, which has been a drag on the economy since early 2020.
Ontario is the largest economy in Canada, contributing to 38% of the Canadian GDP. As Ontario moves through 2022, there are several key economic indicators to watch.
Geographical Disparities in Ontario
Even before the impacts of the COVID-19 pandemic, there were several small and mid-sized cities that hadn’t recovered from the economic downturn that happened over ten years ago. The pandemic has exacerbated these trends, with employment in small cities growing at a much more stagnant rate than that of the large cities.
This is largely in part due to the trend of investment and jobs in larger cities like Toronto and Ottawa. The concentration of high-skilled jobs in these areas has led to a higher demand for labor, which drives up the cost of living and makes it more difficult for those in smaller cities to keep up.
Ontario is also going through the process of de-industrialization. As the area transitions from an economy that relies on goods manufacturing to a service-based economy, the number of jobs in rural areas that rely on resource-based industries is diminishing.
This is having a significant impact on the economies of rural communities, which are already struggling with an aging population and shrinking workforce.
Real Estate Investment in the Suburbs
Since more people can work online, many buyers are moving to the suburbs. The increased demand for suburban housing is driving up the prices of homes and leading to a rise in real estate investment.
While this is good news for those who already own property in the suburbs, it’s bad news for people who are looking to purchase their first home. It’s becoming increasingly difficult for young families to afford to live in areas that are close to their work.
Supply Chain Disruptions, Energy Costs, and the Carbon Tax
The pandemic has highlighted the fragility of global supply chains. The Ontario government is working to build a more resilient system by investing in made-in-Ontario products and services.
This is good news for the economy, but it comes at a cost. The provincial government has also implemented a carbon tax, which has led to an increase in the cost of living for Ontarians.
The tax is intended to incentivize businesses to reduce their emissions, but it’s having a negative impact on the economy in the short term.
What does this mean for businesses in Ontario?
Overall, the Ontario economy is slowly recovering from the pandemic. However, there are still some challenges that businesses need to be aware of.
The most important thing for businesses to do is to stay informed about the latest economic trends and developments. By understanding the current state of the economy, businesses can make better decisions about how to adapt and grow in the coming year.
In order to ensure a bright future for the Ontario economy, businesses need to invest in made-in-Ontario products and services. This will help to build a more resilient economy that is less reliant on global supply chains. Additionally, businesses should strive to reduce their emissions in order to minimize the impact of the carbon tax.
By staying informed and making smart decisions, businesses can navigate the challenges of the Ontario economy and thrive in the coming years.