Ontario’s economy shrank last quarter with GDP adjusted for inflation declining by 0.3%. With the largest economy in Canada in tatters, the mining boom in Alberta and BC is ever more important.
From the Globe & Mail:
Ontario’s economic growth dipped into negative territory during the three months ended March 31, putting Canada’s largest province well on the road to recession.
The government announced today that real gross domestic product declined 0.3 per cent in the first quarter this year. The government said the outlook for the remainder of this year has deteriorated since the provincial budget was unveiled in March, largely because of sharply higher oil prices and weak demand in the United States for the province’s exports.
“We are in some challenging times,” Finance Minister Dwight Duncan told reporters. “I think those challenges continue.”
Mr. Duncan refused to say whether he believes Ontario is poised for a recession. But he said the McGuinty government has taken a number of steps to help jump-start the economy, including investing in skills training for laid-off workers, investing in transit and other infrastructure projects to create jobs, and in lowering business costs by eliminating capital taxes.
Although not mentioned specifically in the Globe & Mail, I know that auto manufacturing has been a drag on the economy in Ontario, as Windsor is a major North American site for production. With Ontario’s economy in the doldrums, the TSX (Toronto Stock Exchange) blowing up the past two days, it is only a matter of time before the housing bloom is off the rose.
Toronto has a speculative condo boom right now. Anyone who has visited in the last two or three years will have seen cranes going up left and right on the drive in from Pearson. This boom will be well and truly over by year’s end.
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Two Ontario Auto Parts Makers Cut 2,250 Jobs, Star Reports, Bloomberg News, 3 Jul 2008
Ontario minister to meet with GM over cuts, Canada.com, 7 Jun 2008
Toronto’s Condo Kings: Is their boom sustainable?, National Post,2 Jun 2008
Chrysler, GM workers in Ontario approve three-year deal, Canada.com, 17 May 2008
Toronto waterfront, Wikipedia