Ontario’s economic situation is not so great.
And, according to this new post by the Fraser Institute, this assessment is only reinforced when you take a look at the surrounding region as well. When compared to other provincial and state economies of the Great Lakes region, Ontario has the lowest per-capita GDP and, since 2000, the slowest economic growth rates.
When looking at inflation-adjusted per-capita GDP growth since 2000, Ontario beat only Michigan. The story is more complicated than that, however, because following the 2008-09 recession, Michigan’s recovery has been swift and its performance impressive while Ontario’s has languished.
Author Ben Eisen lays out the stark contrast between the two jurisdictions:
“Partly due to this stronger growth during the 2010s, by 2019 Michigan’s economy was meaningfully larger than Ontario’s on a per-person basis. More specifically, Michigan, although still holding the lowest per-capita GDP of all U.S. states in the Great Lakes region, enjoyed a per-capita GDP 6.4 percent higher than Ontario’s in 2019.”
What has been the difference? Several factors contribute, but Eisen points out that Michigan’s economic turnaround occured almost simultaneously with a major policy reform package implemented in the 2010s which included a simplification of the corporate tax structure and significant corporate tax reductions.
Eisen concludes that falling behind the one state in the region the province had enjoyed an advantage over in terms of per-capita GDP should be a huge wakeup call for Ontario. Will they heed it?
