Economy of Ontario
The economy of Ontario is rich and diversified. Ontario is the largest economy in Canada, with a GDP nearly twice that of neighbouring Quebec, which is Canada's second largest economy. Though manufacturing plays an important role in Ontario's economy, it is the service sector that takes up 76.9%. Ontario's deficit was CAD$9.8 billion in 2012-2013 (1.5% of the GDP), and is expected to rise to CAD$11.7 billion in 2013-2014.
Ontario is the most populous province of Canada, with a population of approximately 13.5 million permanent residents in 2013. It is Canada's leading manufacturing province, accounting for 46% of the manufacturing GDP in 2012.
Inflation is at 1.0% as of July 2013, and the unemployment rate is at 7.5%. In 2012, the ratings agency Moody's downgraded the province's economic outlook rating from an AA1 negative outlook to an AA2 stable outlook in April 2012.
In 2013, Ontario's main international exports were motor vehicles and parts (34.2%), Precious Metals and Stones (12.3%), Mechanical Equipment (8.8%), Electrical machinery (3.8%), and plastic products (3.6%). Ontario's main international imports were motor vehicles parts and accessories (21.7%), mechanical equipment(14.2%), electrical machinery (11.8%), precious metals & stones (4.5%) and plastic products (3.7%).
Ontario was the leading state/province for attracting foreign direct investment (FDI) in North America in 2013, with $7.23bn. This accounted for more than one-tenth of all FDI in North America. It was also the 4th biggest state for outward FDI, recording $7.74bn.
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The beginning of recorded history in Ontario is marked by the fur trade between Europeans and Native Americans, from which spawned various battles between various European and Native Americans peoples (the French, English, Iroquois and Hurons).
As a result of the Jay Treaty in 1793, the fur trade spread to the Northwest and the need for better transport facilities (in addition to the population) grew. 6000 bushels of wheat were bought at Kingston in 1799, and flour was sold in Montreal and Toronto in 1800. The American Revolution, French Revolution, and the Napoleonic Wars (in addition to subsequent immigration from the War of 1812) greatly stimulated the burgeoning timber trade in Ontario. The St. Lawrence became a monopoly route as other regions (like New York) lacked the waterways and rivers needed to transport timber. Between 1864 and 1866, 400 million board feet of British North American lumber passed through New York, and wood exports to the States from Canada were worth almost $7 million in 1866 to 1867. All the while, the demand for wheat and other agricultural products was growing, but was subjected to considerably greater competition from other regions, and the livestock and dairy industries, in addition to banks, began to flourish.
In the early 20th century, Western Canada swelled with the influx of immigrant populations, and Ontario made the shift from being an export to domestic economy: the exported butter and cheese industry shifted into the milk industry for domestic consumption, winter dairying expanded, and the Ontario's apple industry declined in exports but increased consumption in Ontario and Western Canada.
In this time period, rail lines were constructed across Ontario and that the economy shifted toward greater industrialism and tapping into mineral resources—the mining, pulp and paper, and agriculture industries (in addition to hydro-electric power development) grew, and led to the growth of towns. Further industrial growth (which included those such as road construction, automobile factories, and the tourist trade) were encouraged by the war period.
Agriculture and its economic income
Statistics Canada indicates that the farm population in 2001 was 186,085 which is a steep −15.9% decline from 1991's 221,230 farm population. Though urban farm population isn't dropping as fast as the rural, urban farm population dropped by 10%, compared to the rural's −16%.
The 2001 Census of Agriculture indicates that the number of farms has declined sharply between 1996 and 2001, continuing a long-term trend. The 2001 Census of Agriculture counted 59,728 farms in Ontario, a 11.5% decline since 1996, and higher than the national average (which was -10.7%).
Even though the number of farms are rapidly decreasing in Ontario, at 59,728, the province still possesses the highest number of farms in comparison to other provinces and territories. Alberta comes second with 53,652, and Newfoundland & Labrador has the fewest with 643 farms. Ontario’s farms nationwide have declined slightly over the past two decades. In 1981, Ontario accounted for 26% of the national total. By 2001, it had declined to 24%.
Although the number of farms in Ontario is decreasing, the sizes of these farms are increasing. The average Ontario farm size was once 226 acres (0.91 km2) in 2001, up 9.7% from 1996. Since 1981, the average farm size has increased by 24.9% from 181 acres (0.73 km2).
Ontario’s total farm area has declined 2.7% since 1996 to 13,507,357 acres (54,662.33 km2) in 2001. However, cropland increased 3.2% to just over 9 million acres (36,000 km²), the highest level since 1941. Eastern Ontario led the increase with a gain of 9.2% in cropland.
The province has lost 300,000 manufacturing jobs in the ten years 2003-2013.
The Green Energy and Green Economy Act, 2009 (GEGEA), takes a two-pronged approach to creating a renewable-energy economy. The first is to bring more renewable energy sources to the province and the second is the creation of more energy efficiency measures to help conserve energy. The bill would also appoint a Renewable Energy Facilitator to provide "one-window" assistance and support to project developers in order to facilitate project approvals. The approvals process for transmission projects would also be streamlined and for the first time in Ontario, the bill would enact standards for renewable energy projects. Homeowners would have access to incentives to develop small-scale renewables such as low- or no-interest loans to finance the capital cost of renewable energy generating facilities like solar panels. Solar panels are also manufactured in Ontario.
Hard-rock mining has taken place in the province for over 130 years (as of 2012). The mining industry in Ontario produces more than 30 different metal and non-metal mineral products, and is responsible for a major percentage of Canada's nickel, gold, copper and platinum-group metals production. The extraction of metallic minerals is concentrated in Northern Ontario, while the southern portion of the province produces salt, gypsum, lime, nepheline syenite and structural materials (sand, gravel, stone), along with some petroleum. As of 2008, the mining industry produced about $10 billion worth of minerals. Derisory fees are charged by the government for prospecting licences ($25.50) and exploration permits (nil), in keeping with the duty of economic development of the province. The exploration permit process is meant as a means to notify interested parties, such as surface landowners, of the activities of miners. The development of a mine proceeds through "advanced exploration" to "production" status, the legislation for which is detailed in the Mining Act of Ontario; this covers hard-rock, aggregate, diamond and petroleum mines.
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- "Moody's downgrades Ontario credit rating". CBC. Retrieved 2014-03-28.
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- "Timber Trade History". Retrieved March 30, 2014.
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- Toronto Star, 24 BNov 2013: "Fergus plant closing shows Ontario's decline"
- Ontario Unveils Green Energy and Green Economy Act, 2009
- "THE ECONOMIC AND FISCAL CONTRIBUTION OF THE MINING INDUSTRY IN ONTARIO" (PDF). ONTARIO MINING ASSOCIATION (WITH THE ASSISTANCE AND COOPERATION OF THE ONTARIO MINISTRY OF NORTHERN DEVELOPMENT AND MINES). Retrieved 2012-08-21.
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- Economy of Toronto
- Great Lakes Megalopolis
- Canada's Global Markets Action Plan
- Free trade agreements of Canada