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Ontario predicting slower economic growth until 2035

By Antonella Artuso, Queen's Park Bureau Chief

Ontario Finance Minister Charles Sousa. (STAN BEHAL/TORONTO SUN)

Ontario Finance Minister Charles Sousa. (STAN BEHAL/TORONTO SUN)

TORONTO - 

Ontario’s best economic days are long gone — for the foreseeable future, at least.

After an average annual GDP growth of 2.6% between 1982-2013, Ontario’s Long-Term Report on the Economy is predicting slower growth until at least 2035.

GDP — gross domestic product — is the value of goods produced and services provided within a year.

Real GDP growth in Ontario will average 2.5% until 2017 and 2.1% over the next two decades, the report says.

Over that same long-term range, it’s expected that the rest of Canada will see higher growth — 2.2% on average.

Ontario Finance Minister Charles Sousa insisted, however, the long-term report shows the province is poised for strong economic growth.

“It looks 20 years into the future and talks about our great strengths built up over the last 10 years — a well-educated work force, a strong financial sector, our innovative schools and hospitals,” Sousa said. “But it also notes some looming challenges — for example, changing demographics.”

The province’s GDP declined by almost 5% and employment dropped in the fallout from the 2008-09 global recession, the economic report says.

A recovery is underway but will not be as robust as earlier expected, it says.

The plan predicts a lower unemployment rate going forward, but advises that the aging population will increase government costs and impact business productivity gains.

The workforce will not grow as quickly as it has in the past.

Meanwhile, the number of seniors in Ontario are expected to double by 2035, placing pressure on the health care system.

“As well, retirement savings by today’s workers, including baby boomers who are currently in what were typically high-saving years, is inadequate,” the document says. “These additional costs would be a burden that future workers will have to bear, either directly through greater support to older family members or indirectly through higher taxes.”

Sousa said his government’s budget plans address these challenges, and he fretted that Progressive Conservatives would simply take the axe to public services and programs.

PC MPP Vic Fedeli said corporations are afraid to invest and create jobs in Ontario due to an uncertain tax climate under the Liberals.

Fedeli said the dull economic and employment picture painted by the long-term report explains why the Ontario Liberals were six months behind their own schedule in releasing the document.

 


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