Shrinking working-age population cited for slowing economic growth.
TORONTO — Finance Minister Charles Sousa is releasing a long term economic report that shows Ontario’s economy is expected to grow “somewhat more slowly” over the next 20 years than in the past, The Canadian Press has learned.
Documents obtained by the news agency show the province’s real GDP will average 2.1% growth between 2014 and 2035, compared with a global average of 3.1%. The US GDP is expected to average 2.4% during the same period.
One of the main reasons for the slower economic growth cited in the portion of the report obtained by CP is a shrinking working-age population, which it said will be “a significant challenge” for the province in the coming years.
“However, a small increase in the working age population towards the end of the next decade begins to reverse this trend,” it says.
The report predicts inflation will fall from the three per cent range to an average of two per cent in Ontario and about 2.2% in the rest of Canada over the next two decades.
The economic outlook from Sousa also predicts Ontario’s unemployment rate will fall from 7.7% to 5.6% over the next 20 years, but won’t slip under the 6% mark before 2018.
It also says Ontario is in a good spot to take advantage of the rising global share of market economies by developing countries like China.
“Ontario’s diverse economy is well positioned to take advantage of this shift in the global economy through increased exports of goods and services from sectors such as agri-food, infrastructure, life sciences, information and communications technology, education, advanced manufacturing and financial services,” it concludes.
The report also said Ontario’s investment of billions of dollars in infrastructure projects will pay off over the long term.
“Attracting business investments also depends, in part, on maintaining, renewing and developing public infrastructure,” it says. “The province has already made, and is continuing to make, significant infrastructure investments to support economic growth.”
Sousa said the Liberal government was on track to eliminate the $11.7 billion deficit by 2017-18, despite leaked cabinet documents given to the Progressive Conservatives that show the upcoming budget will increase spending by $5.7 billion.
The finance minister wouldn’t confirm or deny the size of the spending hike, but insisted the red ink would be eliminated on schedule.
© 2014 The Canadian Press