INCOMPLETEOntario's Economic Growth Outpaces G7 Countries
This article is really just a presser so we have to look deeper into the supporting resources. Interesting to note this line:
At least they recognize their true place in job creation: they don't have one, only people do! If a gov didn't have tax revenue or borrowing power they wouldn't even be able to create their own bureaucracy jobs or at least pay anyone for performing those jobs."The economy continues to create jobs, and the unemployment rate in Ontario has been lower than the national average for 22 consecutive months."
Looking closer at the employment numbers cited in the article, not such great data actually. Remember, employment rates are only one slice, to be sure an important one, of a many slice economic pizza all of which need to be considered before rendering a conclusion. For example: employment can rise and unemployment drop simply because folks can no longer afford the day to day expenses of living so they must head back into the work force. Conversely, employment numbers can drop and unemployment rise due to some form of automation that generates wealth but requires minimal manual intervention thereby introducing new avenues of leisure time. No, employment numbers are not indicative at all of a healthy or ailing economy.
When put together with some other economic pizza slices, we then begin to get some context and achieve some clarity. According to the Labour Market Bulletin - Ontario: January 2017 published by Job Bank, the gap between full-time and part-time is quite substantial: full-time (+5,300) and part-time (+23,500). Additionally, the majority of the gains were in the service industry which needs to sit on top of a solid production foundation in order to be sustainable. Finance, insurance, real estate, rental and leasing lead the way but primarily due to the current housing bubble rendering this growth unreliable. Health care and social assistance (+7,500), and public administration (+7,100) industries followed but these are both cost centres not direct revenue/wealth generators.
Deeper into that report we can see there are also a large amount of automotive sector jobs that were created. According to 2015-2016 Annual Report from the Canada Financing and Leasing Association, Canadians financed $117B worth of vehicles, fleet and consumer. This is a massive amount of debt, making the automotive industry bubblish and not a solid footing at all. Additionally, while indeed a full country statistic, the majority of automotive manufacturing and production is done in Ontario so this has a direct impact when the bubble bursts. Still further, the Ontario Economic Accounts Report for the 4th Quarter of 2016 states the following statistic: "Non-residential and machinery and equipment spending by businesses both declined by 4.0%. Government spending advanced by 1.6% in 2016, with gains in current (+1.7%) and capital (+0.9%) spending." This is a very telling and concerning statistic when wealth generating business stops investing in itself or investing in new equipment to meet demand because there isn't any. At the same time in this particular instance the government increased its (our) debt and interest load. Since this spending increase occurred during a time of non balanced budget, it would have to been debt financed.
Summing: while the headline certainly speaks roses, the real data tells another story and not a great one at that. Interestingly, the following months showed a marked change upwards in hiring as well as big swing towards full time from part time.
Newsroom : Ontario's Economic Growth Outpaces G7 Countries
2016-17 Third Quarter Finances
2016 Ontario Budget
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