Canadian Manufacturing

With the Alberta boom turned to bust, workers look back to Ontario

Expert says Ontario's manufacturing industry may never return to its past status as a growth engine, but that the sector has bounced back



Advanced manufacturing is doing particularly well in the province, while construction, finance and technology are all bright spots as well

TORONTO—After he graduated in 2011, mechanical engineer David Momoh did what countless others in Ontario had done before him: he looked west, to the land of oil and opportunity.

Then boom turned to bust.

Ontario was still struggling to recover from the recession when Momoh and his cohort fled the province for a piece of the action in Alberta’s latest oil-fuelled heyday. He found work almost immediately.

“My first job interview with a company in Alberta, he literally said, ‘If you give me one week I’ll have a job offer for you,’ and the second interview they gave me a job,” Momoh recalled recently from his home in Toronto.

“They offered me twice what I was going to earn here. They barely checked my resume and it was a Fortune 500 company.”

In the 2011 census, while Alberta reported growth in the double digits, Ontario recorded its lowest population growth rate since 1986. People were leaving the province at twice the rate they had previously.

That exodus has continued, at least through the first part of the latest head count, numbers from the first tranche of data from the 2016 census suggest.

The growth rate for Ontario, home to some 13.4 million people, came in at just 4.6 per cent, down from 5.7 per cent in 2011—the first time since the Second World War that in two straight census periods, Canada’s most populous province has been growing more slowly than the country as a whole.

Things are slowly turning around, however, said Michael Haan, a sociology professor at Western University in London, Ont.

“Probably right up to 2014, until the price of oil really tanked, Ontario was losing more people through outmigration than they were gaining through inmigration interprovincially,” said Haan, who also holds the Canada research chair in migration and ethnic relations.

“That flipped in 2015, partially because the dollar went in the direction that’s conducive to trade with the U.S. and in 2016 it even accelerated. Now Ontario is receiving almost twice as many in-migrants as it is out-migrants.”

In terms of immigration, Ontario typically attracts more people than any other province. In the fourth quarter of 2015 alone, Ontario saw a net international migration gain of 12,845, compared to a net loss of 3,390 in the same quarter a year earlier, according to Statistics Canada data.

Momoh lost his job in Calgary when his company was forced to make cuts due to the oil slowdown, and, like many others, eventually headed back to Toronto in hopes of finding employment.

“There were thousands of people looking for work in Calgary and I got tired of going to the cafe and just seeing people like zombies walking around.”

Regardless of what the census numbers might suggest, Ontario’s Ministry of Finance says fewer people are leaving Ontario for Alberta, and more are moving in the other direction. People tend to go where the jobs are; in 2016 Ontario’s unemployment rate was 6.5 per cent, lower than the national rate and well below Alberta’s jobless number of 8.1 per cent.

“I decided it was probably healthier for me to move back to Toronto and look for work here,” he said. “(Finding a job is) probably as hard as it is in Calgary, but there’s a healthier economy here right now.”

Ontario’s real GDP grew 2.7 per cent in 2014, 2.5 per cent in 2015, and last year’s annualized growth was at 2.6 per cent. It has been helped by the downturn in commodity-producing regions, a lower Canadian dollar and stronger economy in the U.S., said economist Mike Moffatt.

“I think overall, Ontario’s economy has been about the strongest in Canada the last couple of years,” he said.

The days of Ontario’s manufacturing sector serving as the engine of economic growth are probably gone for good, Moffatt added, but it’s certainly doing better than in once did.

“Manufacturing is bouncing back a little bit—not as much as perhaps we’d like, but we’re not seeing those manufacturing job losses that we saw a few years ago,” said Moffatt, an assistant professor at Western’s Ivey Business School.

Advanced manufacturing in particular is doing well, while the construction sector has seen a boom, the financial industry is strong, and the tech sector—though its numbers are still relatively small—is growing, he added.

“We’re particularly seeing that the Kitchener-Waterloo economy is one of the fastest growing in the province, but we’re also seeing places like Ottawa, we’re seeing the tech sector pick up there.”

The Ontario job market struck Momoh as more attractive than Alberta’s because of its diversity, and he is looking to take advantage of that.

“Now I’m starting to go into tech just because I figure if engineering is not working out, I might as well try the new industries that seem to be cropping up.”

But Ontario’s labour market is not all rosy. Despite net new job gains, the share of full-time positions has not recovered much since the recession, nor has the employment rate for young workers, the province’s budget watchdog said in a recent analysis.

What’s more, gains—jobs and the people to do them—have mostly been concentrated in the Greater Toronto Area. The province’s finance department says the GTA’s share of Ontario’s population rose 1.1 percentage points from 2011 to 2016, while the percentages for all other regions declined.

“You head north of Toronto and the story really starts to change,” said Haan. “It’s largely a story of outmigration. Unfortunately, these rural areas, they’re developing immigration strategies, they’re trying to recruit people, and they’re having some success, but still the numbers are low compared to what happens to Toronto.”

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