By Randall White
Statistics Canada’s March 12 release of the monthly Labour Force Survey for February helped set an intriguing stage for Finance Minister Peter Bethlenfalvy’s March 24 release of the 2021 Ontario Budget.
The upbeat Labour Force headline was that the Canada-wide unemployment rate “fell 1.2 percentage points to 8.2% in February, the lowest rate since March 2020.”
In Ontario the February unemployment rate also fell, from 10.2% in January to 9.2%.
But the rate for Canada’s most populous province was above the Canada-wide average.
In fact, when provincial unemployment rates for January and February are ranked, from lowest to highest, Ontario has the third highest rate, after Alberta and Newfoundland.
The Canada-wide rate for January, for instance, was 9.4%. And the three highest provincial rates were in Ontario (10.2%), Alberta (10.7%), and Newfoundland (12.8%).
The Canada-wide rate for February was 8.2%. And again, the high-end of the provincial distribution was filled by Ontario (9.2%), Alberta (9.9%), and Newfoundland (15.3%).
It may be a while before we can begin to understand the economic numbers statisticians report in the middle of global pandemics.
The Ontario trouble suggested by the latest provincial unemployment rates was nonetheless alluded to at the end of Mr. Bethlenfalvy’s Ontario Budget Speech.
“Our people’s hard work, ingenuity and drive for better, stronger families and communities,” the Minister of Finance urged, “will set us on a path that restores Ontario’s place as the economic engine of the country.”
Ontario of course is not the only self-declared economic engine of Canada. The Wild Rose Province of Alberta has advanced similar claims over the past few decades.
With the first year of the pandemic behind us, some will ask why both former economic engines are so close to the bottom of the provincial unemployment-rate heap at the moment?
If the February rates are any guide, the economic engine of the country has most recently migrated to such provinces as Quebec (6.4%) and BC (6.9%).
Some might say that the Ontario Budget is at least trying to point in new directions. Despite the Ford nation’s early enthusiasm for reducing the cost of government, the Minister of Finance today is still stressing “the Premier’s simple promise to the people — we will do whatever it takes to keep you safe.”
So under “Protecting People’s Health” in the Budget Speech, much is said about spending and other plans for vaccines, testing, hospitals, long-term care, mental health, and domestic violence.
Under “Protecting Our Economy” much more is said about the Ontario COVID-19 Child Benefit, students (and online learning), broadband expansion in rural areas, Ontario Jobs Training Tax Credit, Ontario Small Business Support Grant, and the tourism, hospitality, culture, sport and recreation industries.
This is still an Ontario PC budget, despite the minister’s artful bow to “the leader of the opposition who has played such an important role holding our government to account.”
Yet whatever else, the Ford Conservative government has run up a vast debt doing whatever it takes to protect the people of Ontario from the worst of a once-in-a-century biomedical disaster.
The unprecedented $38.5-billion deficit for the fiscal year just ending is projected to fall to $33.1 billion for 2021-22.
But total spending in 2021-22 is a record $186.1 billion. On moderate growth assumptions the deficit will not be eliminated until 2029-30.
Faster or slower economic growth would mean an earlier or later date for potential budgetary balance.
And this underlines a key feature of the 2021 Ontario Budget’s plan for dealing with the vast debt that has been run up in the fight against COVID-19.
On the strategy now, the debt will be covered by future economic growth and the increased revenues it will bring — not by raising taxes or cutting services. (Though the Ontario PCs still seem to be hoping that online learning can reduce the costs of teachers in schools.)
At the very end of his speech Peter Bethlenfalvy somewhat Trumpishly alluded to “the Ontario Spirit” which “will unleash growth unlike anything we’ve seen in the province, ever before.”
This may have been the least convincing part of what could otherwise pose as a well-thought-out, if also clearly conservative, step ahead into the unknown future of public finance everywhere.
(Although in a future Canada with diverse growth points in all big and even small places, thanks to rural broadband and so forth, talk about the restoration of “Ontario’s place as the economic engine of the country” could seem almost equally unpromising.)
On the other hand, how many present-day residents north of the Great Lakes will complain if Ontario does actually have “growth unlike anything we’ve seen in the province, ever before” — at some point soon enough, and ideally before June 2, 2022?
Randall White is a former senior policy advisor with the Ontario Ministry of Finance, and a former economist with the Ontario Ministry of Municipal Affairs and Housing. He is the author of Ontario 1610-1985: A Political and Economic History and Ontario Since 1985. He writes frequently about Ontario politics.