Ontario Environmental Scan 2022
Ontario Environmental Scan 2022
Image transcript

Ontario Environmental Scan 2022


  • 15.1 million people lived in Ontario in 2022, an increase of 2.0% from 2021 to 2022. Ontario represents 38.8% of Canada‘s total population.
  • The proportion of seniors aged 65+ is projected to increase from 18.4% in 2022 to 22.0% in 2032.
  • In 2022, individuals aged 55 and over accounted for 37.6% of the working-age population. By 2032, that proportion could reach 38.4%.
  • The proportion of youth (15-29) is projected to decline from 20.1% in 2022 to 18.7% in 2032.
  • Labour force participation has fallen amongst workers aged 45 and over in recent years due to pandemic-induced impacts, such as earlier retirements.
  • Average age of the non-Indigenous population in Ontario is 41.6 versus 35.3 in the Indigenous population (Census 2021).
  • The Indigenous population comprised 2.5% of the total Ontario working-age population, and continues to be under-represented in the labour market, accounting for 1.5% of the Ontario employment as of 2022.
  • Ontario has the largest proportion of recent immigrants arriving in Canada, with 44.0% of recent immigrants who arrived between 2016 and 2021. In 2022, despite COVID-19 challenges, Canada welcomed over 437,000 new permanent residents, a record high. About 42% settled in Ontario. Immigration, Refugees and Citizenship Canada has set a goal of about 465,000 new permanent residents for 2023.
  • The official-language minority community in Ontario represented 4.1% of the provincial population (2021 Census), and is prevalent mostly in the Northeast Ontario and Ottawa economic regions.
  • In 2017, 24.1% of the Ontario population aged 15 and over were persons with disabilities. The 2017 Canadian Survey on Disability revealed wide differences in income and employment outcomes of those persons with disabilities when compared with the rest of the population.

Labour Market Conditions

In 2022¿

  • Employment continued strong gains (+4.6%)
  • Unemployment fell to pre-pandemic levels (-30.0%)
  • Participation rate inched up (65.2% to 65.4%)
  • Unemployment rate fell significantly (8.1% to 5.6%)

In 2023¿

  • As the economy wrestles with pandemic-induced inflationary pressures and higher interest rates, employment in Ontario is projected to expand by about 1.0%-1.5% in 2023, and to increase further by about 0.5%-1.0% in 2024.
  • The unemployment rate in Ontario is projected to rise to about 6% in 2023, and will likely rise slightly more to about 6.5% in 2024.

Provincial Economic Conditions

Ontario‘s Economic Factors in 2022/23:

  • High inflation and interest rates
  • Falling housing markets
  • Shortages in labour and materials

Reviewing 2022 so far¿

  • The economy grew at a slower pace through 2022 in Ontario. Investment slowed, and housing markets had gone through corrections due to higher interest rates designed to curb inflation.
  • Inflation rates increased to levels last observed during the early 1980‘s. Some of the contributing factors were supply chain issues, geo-political challenges, government support, and labour shortages.
  • GDP increased by 5.2% in Ontario in 2021, and is projected to have grown by about 3.6% in 2022. Due to economic uncertainty, GDP forecasts for 2023 have been wide-ranging, but growth is expected to be relatively flat throughout the year.

Risks to the Ontario Economy in 2023

  • The ongoing impacts of the pandemic have resulted in labour shortages, higher retirements, and industry-specific layoffs and closures.
  • Household debt levels are being exacerbated by sharp increases in interest rates for mortgages and business, auto and other loans, possibly leading to lower household spending and continued corrections to real estate markets.
  • Economic slowdowns have been projected for the Canadian and global economies as a result of rising interest rates across the globe to curb inflation.

Wages and Low-Income Populations

  • Many low-income individuals experienced financial hardship in the pandemic-affected labour market, due to the high concentration of these workers in the industries and occupations most affected by pandemic-induced measures.
  • With the high inflation and labour constraints, an upward pressure on wages is possible. Credit card balances have increased among Canadian consumers, and rental costs have ballooned in large metropolitan areas.

Small-Medium Enterprises (SMEs)

  • Small enterprises (1-99 employees) represent 97.9% of businesses with at least one employee in Ontario, and employ 36.0% of employees in Ontario as of Q1 2022.
  • Medium enterprises (100-499 employees) represent 1.8% of businesses with at least one employee in Ontario, and employ 15.7% of employees in Ontario as of Q1 2022.
  • Large enterprises (500+ employees) represent 0.2% of businesses with at least one employee in Ontario, and employ 48.2% of employees in Ontario as of Q1 2022.
  • Small and medium enterprises have been hit particularly hard by the economic impacts of both the pandemic and high inflation. Lower saving reserves compared to large enterprises has put SMEs at greater risk of not being able to endure tougher economic conditions or higher repayments for business loans.

Industry Trends

  • Employment increased in both the goods (+5.3%) and services-producing (+4.4%) sectors in 2022 in Ontario.
  • Employment gains were recorded in nearly all industries, continuing the broad recovery across most sectors in 2021.
  • Utilities (+16.7%) and construction (+9.2%) had the sharpest growths among sectors in Ontario.
  • The other services industry (-2.2%), which includes repair services, personal care services, and non-governmental organizations (NGOs), was the only sector to observe a loss in employment in 2022, as workforce levels in the industry endured a 2 nd consecutive year of losses in Ontario.
  • Chart: Employment Growth by Industry, 2022

Regional Economic Conditions

  • Employment levels grew in all eleven economic regions in Ontario in 2022.
  • Kingston-Pembroke (+8.1%) observed the sharpest employment growth in Ontario, the second consecutive year of growth in the region post-pandemic.
  • Employment grew the slowest in the Northwest (+1.1%). The regional labour market saw workforce decreases in its accommodation and food services, and educational services, sectors.
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