No Ontario region untouched by seismic labour market shift

March 31, 2014

Ontario's slow recovery from the global recession is compounded by a deeper shift in the province's labour market that has left no region untouched.

Every economic region in Ontario has lost at least 18 per cent of the manufacturing jobs that existed in 2000.

In relative terms, Northwestern Ontario lost the most – 60 per cent of its manufacturing jobs between 2000 and 2013. Kitchener-Waterloo and Barrie saw the smallest relative decrease in manufacturing jobs at 18.5 per cent.

In absolute numbers, Windsor-Sarnia, Ottawa and Kitchener-Waterloo, and Barrie have lost the most manufacturing jobs since 2000.

Job creation, on the other hand, has been uneven across the province.

In addition to adding 125,000 new jobs in the service sector, Kitchener-Waterloo and Barrie have offset the loss of more than 20,000 manufacturing jobs with 20,000 new jobs in the goods-producing sector. That's buoyed the employment and participation rates in those communities to 66.2 per cent and 70.8 per cent, respectively.

In contrast to Kitchener-Waterloo and Barrie, the rest of Southwestern Ontario has seen very little job creation and employment rates remain low.

Windsor-Sarnia, for example, has seen its labour market shrink by 7,000 jobs since 2000.

London has not fared much better. Between 2000 and 2008, London lost 6,000 manufacturing jobs. Since 2008, the region has lost over 12,000 full-time jobs, 6,000 of which have been replaced with part-time work.

Though almost 100,000 net new jobs have been created in Hamilton and Niagara since 2000, the region has seen a loss of 8,000 full-time jobs since the recession and the creation of 5,300 part-time jobs in their place.

Across Ontario, job creation has been concentrated in the service sector – and is far more polarized as far as income is concerned. Many of the new jobs that have replaced manufacturing have been high paying jobs in technology and health care. Unfortunately, many more are precarious and offer lower pay.

Also troubling: part-time and temporary job growth has been outpacing full-time job growth.

Despite Southwestern Ontario's near stagnant labour market, some analysts predict a resurgence in Ontario's exports to the United States as the loonie continues to depreciate against the American dollar and the American economy is predicted to strengthen.

But Ontario cannot rely upon America's economic coat tails as it did rebounding from the 1990s recession. The hard reality is this: Ontario's labour market has been undergoing a seismic shift for quite some time and there's no going back to the labour market of the 1990s.

It's time to look forward, to new policy solutions to address the shift and ensure more Ontario regions make a successful transition.

Besides, many of the policy answers to the 1990s economy are wearing thin. Take, for instance, the 15-year-old claim that tax cuts create jobs.

Given the long-term transformation of Ontario's labour market – especially in harder hit regions – it's time to start talking about more proactive solutions to revitalizing local economies.

This isn't a conversation that belongs to any single government. It's a conversation we should be having at the federal, provincial and municipal level.

It's a conversation that should include students and young Ontarians – many of whom are part of the unemployed and underemployed and are looking for a sign of hope.

It's a conversation that should include older workers too, since many of them are feeling the pain of the labour market transformation that's underway.

And it's a conversation that should include business owners big and small, so that they can offer the training, apprenticeship and job creation opportunities that could turn a region facing economic decline into a success story.

It would be short sighted to view this seismic shift in Ontario's labour market as a new reality that cannot be prevented. Instead of facilitating a race to the bottom – where workers face lower paying, temporary and insecure work – Ontario can facilitate a race to the top that attracts better jobs and innovative industries.

We have options at our disposal. Now's a good time to start talking about those options.

Kaylie Tiessen is an economist with the Canadian Centre for Policy Alternatives' Ontario office.

This op-ed was previously published in The Kitchener-Waterloo Record, the Woodstock Beacon Herald and the Stratford Sentinel Review.