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Ontarians growing poorer compared to American neighbours

Ontarians growing poorer compared to American  neighbours

lags the regional GDP per person by $16,607

NORTHERN, ONTARIO   ~~~~~~  April 28, 2021  (LSN)  The average income, as measured by per person GDP, continues to be lower in Ontario by CA$16,607 compared to its regional American neighbours, and the gap is only getting worse, finds a new study released today by the Fraser Institute, an independent, non-partisan, Canadian public policy think-tank.

“When we compare the average income of Ontarians relative to Americans in neighbouring states, the situation is getting worse,” said Ben Eisen, senior fellow at the Fraser Institute and co-author of Measuring Ontario’s Regional Prosperity Gap.

The study compares average income in Ontario (measured as Gross Domestic Product per person) to that of the eight American states in the Great Lakes region (Illinois, Indiana, Michigan, Minnesota, New York, Ohio, Pennsylvania, Wisconsin) and its neighbouring province of Quebec. It also compares the economic growth rates of jurisdictions in the region in recent years.

According to the study, Ontario has the second lowest GDP per person in the region, ahead only of Quebec.

In fact, Ontario’s GDP per person in 2019 was CA$61,315, and trailed Michigan (CA$65,226) by nearly $4,000 per person.

The population weighted average of GDP per person of all of the jurisdictions in the region is CA$77,922.

This means that Ontario lags the regional average by $16,607 per person, or 27.1 per cent.

“The income gap between Ontario and its neighbours is substantial, and should concern policymakers because strong GDP growth contributes to higher living standards,” Eisen said.


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Summary

  • By global standards, Ontario is a prosperous place. Ontarians enjoy living standards and access to opportunities that are the envy of much of the world.
  • However, within its own economic region, Ontario is an economic laggard.
  • This bulletin compares overall prosperity in Ontario (measured as Gross Domestic Product per person) to that of the eight American states in the Great Lakes region and its neighbouring province, Quebec. It also compares the economic growth rates of jurisdictions in the region in recent years.
  • The study shows that Ontario has the second lowest GDP per person in the region, ahead only of Quebec. The region’s GDP per capita taken as a whole is 27.1 percent higher than Ontario’s.
  • Over the past two decades, Ontario has fallen increasingly behind its regional neighbours. While real inflation-adjusted GDP has increased by 20 percent in the entire region since 2000, Ontario’s real per person economy has grown by just 13 percent.
  • The large and growing prosperity gap between Ontario and its neighbours should concern Ontarians generally and policymakers specifically. Strong GDP growth contributes to job creation, wage growth, and other indicators of well-being.

Authors:

Ben Eisen

Senior Fellow, Fraser Institute

Milagros Palacios

Associate Director, Addington Centre for Measurement, Fraser Institute

Northern Ontario 
Kenora, Rainy River, Dryden, Thunder Bay, Terrace Bay Marathon, Sault Ste Marie, Sudbury, North Bay, Ontario

#LSN_Econ

Categories: Economy
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