Measuring Ontario’s Prosperity Gap at the Metropolitan Area Level

Summary

• A recent study published by the Fraser Institute found that there exists a “prosperity gap” between Ontario and nearby American states in the Great Lakes region. Specifically, Ontario is an economic laggard with respects to key measures of income, with the relevant gaps widening in recent years.
• This paper provides further analyses of these indicators by examining median employment income in 107 large metropolitan areas in Ontario and Quebec (CMAs) and the Great Lakes region of the United States (MSAs) in 2019.
• We find that for this important indicator of labour market and overall economic health, Ontario’s metro areas are clustered near the bottom of the overall rankings. Specifically, out of the 20 bottom-ranked jurisdictions for this indicator, seven are found in Ontario.
• This study also measures growth in median employment earnings during the 2010s. On this indicator, Ontario also fared poorly. Of the just 22 CMAs out of 107 with annualized growth rates below 0.5 percent, seven are found in Ontario. These include some of the largest metropolitan areas such as Toronto (0.4 percent), Ottawa (<0.1 percent), and London (0.4 percent).
• This study also provides a discussion of the large southwestern Ontario CMAs of London and Windsor. These two once-prosperous cities rank 93rd and 99th out of 107 metro areas for median employment income. We specifically show that these two once-prosperous metro areas lag far behind nearby US manufacturing hubs such as Detroit, Milwaukee, Cleveland, and Buffalo.