ECONOMIC DEVELOPMENT YEAR 1, UNIVERSITY OF WATERLOO THE NORTHERN ECONOMY 17 JUNE 2016, THUNDER BAY

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1 6/7/216 ECONOMIC DEVELOPMENT YEAR 1, UNIVERSITY OF WATERLOO THE NORTHERN ECONOMY 17 JUNE 216, THUNDER BAY Overview Introduction to Northern Policy Institute GDP in the North Employment in the North Opportunities and Challenges Immigration in the North Education in the North Bottom Line 1

2 6/7/216 About. What is NPI? Think tank Independent authors are free from interference from everyone, including us Non partisan we do not take sides Evidence based we collect, measure and interpret data IN the North we deal with local, regional, provincial, national and international issues from a northern perspective Not an advocacy group 2

3 6/7/216 Three ways YOUR issue gets on OUR to do list 1. Top Ten Northern Issues: Northern Policy Institute is the ONLY Think Tank in Canada that sets its research agenda based on feedback we receive from our stakeholders, all 78, of them. If your issue is shared by your friends and neighbours, it will likely get onto our to do list. 2. Single Window on Northern Issues: YOU do the work, commission the study, and you send it to us for re publication or dissemination. Big parts of our job involve avoiding wasteful duplication of effort and getting the word out about what has already been done. 3. Willing to Partner but no guarantees: NOT a consulting service, but will partner in cash, or in kind to expedite needed work. We just can t promise you will like the answer. Northern Ontario data is now just a click away. Northern Policy Institute, North Superior Workforce Planning Board, and the Sault Ste. Marie Innovation Centre are pleased to launch Northbynumbers.ca, an interactive data tool that displays Northern Ontario census data from between 21 and 211. Identity, income, housing, education, employment, mobility, age and population statistics at the District, community and even neighborhood level!* * - where available 3

4 6/7/216 Northern GDP GDP (Chained 27 dollars x 1,,) Northeast Ontario Northwest Ontario 24, 1,5 23,5 23, 1, 22,5 9,5 22, 21,5 9, 21, 2,5 8,5 2, 8, 19,5 19, , Source: Author s calculations based on Statistics Canada, CANSIM database, tables and

5 6/7/216 Distribution of Jobs by Industry Sudbury 21 5% 5% 5% 6% 4% 4% 5% 6% 7% 1% 7% 16% 7% 13% 9% Trade Health care and social assistance Forestry, fishing, mining, quarrying, oil and gas Educational services Accommodation and food services Public administration Business, building and other support services Construction Finance, insurance, real estate and leasing Manufacturing Transportation and warehousing Other services Professional, scientific and technical services Information, culture and recreation Agriculture + Utilities 214 5% 5% 4% 6% 4% 4% 4% 4% 7% 8% % 17% 15% 9% 8% Trade Health care and social assistance Educational services Accommodation and food services Forestry, fishing, mining, quarrying, oil and gas Public administration Construction Transportation and warehousing Professional, scientific and technical services Business, building and other support services Finance, insurance, real estate and leasing Information, culture and recreation Other services Manufacturing Agriculture + Utilities Labour Market Characteristics Employment by industry (NAICS) and occupation (NOC-S) ER/CMA data by 4-digit NAICS/NOC-S through cost-recovery Request CA and CD level data Source: Statistics Canada, Labour Force Survey (CMA), Census/NHS (CSD) Source: Estimation techniques (CD, CSD) Thunder Bay, Employment change by industry, Jan 215 Jan month moving average, unadjusted for seasonality (Source: Statistics Canada, CANSIM ) Finance, insurance, real estate, rental and leasing Business, building and other support services Construction Transportation and warehousing Information, culture and recreation Health care and social assistance Other services (except public administration) Accommodation and food services Professional, scientific and technical services Educational services Wholesale and retail trade Public administration Manufacturing Net change =

6 6/7/216 GDP by goods-producing industry (chained 27 dollars x1,,) Agriculture.5%.3% Forestry, fishing, mining, quarrying, oil 18.3% and gas 1.2% 6, 5, 4, 3, 2, 1, , 2,5 2, 1,5 1, 5 Utilities 3.3% 4.7% 1, Construction 5.6% 6.% 1,6 65 1,5 6 1,4 1,3 55 1,2 5 1,1 1, Manufacturing 7.7% 4.1% 2,4 2,3 2,2 2,1 2, 1,9 1,8 1,7 1,6 1,5 1,6 1,4 1,2 1, Source: Author s calculations based on Statistics Canada, CANSIM database, tables and GDP by services-producing industry 12.5% Trade (Wholesale and Retail) 13.9% 3,3 3,1 2,9 2,7 2,5 2,3 2,1 1,9 1,7 1, ,2 1,15 1,1 1,5 1, % Transportation and Warehousing 5.1% 1,1 1,5 1, % Finance, insurance, real estate 11.7% & leasing 3, 2,9 2,8 2,7 2,6 2,5 2,4 2,3 2, ,4 1,3 1,2 1,1 1, % Professional, scientific & 3.4% technical services 1, % Business, building & other 3.2% support services 1, % Educational services 6.7% 1,8 1,7 1,6 1,5 1,4 1,3 1,2 1, Source: Author s calculations based on Statistics Canada, CANSIM database, tables and

7 6/7/216 GDP by services-producing industry cont d Health care & social assistance 9.4% 11.2% Information, culture & 3.3% recreation 3.4% Accommodation & 2.1% food services 2.3% 2,3 2,2 2,1 2, 1,9 1,8 1,7 1,6 1,5 1,5 1, , Other services 1.9% 2.4% Public administration 8.3% 11.3% ,45 2,25 2,5 1,85 1,65 1,45 1,25 1,5 1, Source: Author s calculations based on Statistics Canada, CANSIM database, tables and Northern Employment 7

8 6/7/216 Employment Rate by district 65 Employment Rate (%), Northern Ontario Census Divisions, 2 year averages, 26/7 to 213/ /7 27/8 28/9 29/1 21/11 211/12 212/13 213/14 Nipissing Manitoulin, Sudbury, Timiskaming Greater Sudbury Cochrane Algoma Thunder Bay Rainy River, Kenora Ontario Canada Source: Statistics Canada, CANSIM Table and custom tabulation. Note: District-level data is only available as 2-year averages. As such, annual Labour Force Survey data for Ontario and Canada was manipulated into 2-year averages in order to compare with district-level data. Unemployment Rate by district 1 Unemployment Rate (%), Northern Ontario Census Divisions, 2 year averages, 26/7 to 213/ /7 27/8 28/9 29/1 21/11 211/12 212/13 213/14 Nipissing Manitoulin, Sudbury, Timiskaming Greater Sudbury Cochrane Algoma Thunder Bay Rainy River, Kenora Ontario Canada Source: Statistics Canada, CANSIM Table and custom tabulation. Note: District-level data is only available as 2- year averages. As such, annual Labour Force Survey data for Ontario and Canada was manipulated into 2-year averages in order to compare with district-level data. 8

9 6/7/216 Participation Rate by district 7 Participation Rate (%), Northern Ontario Census Divisions, 2 year averages, 26/7 to 213/ /7 27/8 28/9 29/1 21/11 211/12 212/13 213/14 Nipissing Manitoulin, Sudbury, Timiskaming Greater Sudbury Cochrane Algoma Thunder Bay Rainy River, Kenora Ontario Canada Source: Statistics Canada, CANSIM Table and custom tabulation. Note: District-level data is only available as 2- year averages. As such, annual Labour Force Survey data for Ontario and Canada was manipulated into 2-year averages in order to compare with district-level data. Northern Ontario s youth are economically involved Consistently above Ontario and Canada Consistently below Roughly equal participation Participation Rates (%), 15 to 24 years, 21 to 215 Sudbury, 69.8 Thunder Bay, Canada 15 to 24 years Greater Sudbury 15 to 24 years Ontario 15 to 24 years Thunder Bay 15 to 24 years Participation Rates (%), 25 to 54 years, 21 to Canada 25 to 54 years Greater Sudbury 25 to 54 years Ontario 25 to 54 years Thunder Bay 25 to 54 years Participation Rates (%), 55+ years, 21 to Canada 55 years and over Greater Sudbury 55 years and over Ontario 55 years and over Thunder Bay 55 years and over 9

10 6/7/216 Youth Employment Rate Youth Employment Rate (15 to 19 years) Youth Employment Rate (2 to 24 years) (July) (July) Northeast Northwest Ontario Canada Northeast Northwest Ontario Canada Source: Author s calculations based on Statistics Canada, custom tabulation. Youth Unemployment Rate Youth Unemployment Rate (15 to 19 years) Youth Unemployment Rate (2 to 24 years) (July) (July) Northeast Northwest Ontario Canada Northeast Northwest Ontario Canada Source: Author s calculations based on Statistics Canada, custom tabulation. 1

11 6/7/216 Involuntary part-time employment 45% 4% 35% 3% 25% Involuntary part-time employment rate (%) Involuntary part-time employment rate is the percent of part-time jobs that are being filled by individuals who would prefer to be working fulltime Involuntary part-time employment in 214: Canada 27% (935,7 people) Ontario 32% (431,9 people) Northeast 34% (17,9 people) Northwest 31% (7,1 people) 2% Also tracking this indicator by age and gender 15% Canada Ontario Northeast Northwest Source: Author s calculations based on Statistics Canada, custom tabulation. Temporary Employment 18% 17% Temporary employment as a share of all employees Temporary employment includes seasonal, term or contract, casual and other temporary jobs 16% 15% 14% 13% 12% 11% 1% 9% Temporary employment is only a small chunk of total employment. As of 214: Canada 13.4% (2 million people) Ontario 12.6% (736k people) Northeast 13.1% (3k people) Northwest 14% (13k people) Also tracking this indicator by age, gender and industry 8% Canada Ontario Northeast Northwest Source: Author s calculations based on Statistics Canada, custom tabulation. 11

12 6/7/216 Northern Challenges & Opportunities Northern Ontario s population is declining From 21 to 215, Northern Ontario s population declined by 2.8% 1. Low fertility rates Northeast Ontario = 1.6 Northwest Ontario = 1.77 Generational Replacement Rate = Out migration In 214/215, over 2,6 more people moved to Southern Ontario or another province than those who moved to the North from these areas 3. Low rates of immigration As of 215, Northern Ontario had 6.4 immigrants per 1k people, compared with 64.8 in Ontario The number of immigrants in Northern Ontario has been declining on average for over decade Net non permanent residents are positive but have been declining since 211 (note these are net numbers) Domestic Net Migration Immigrants and net non permanent residents 14 Immigrants Net non permanent residents Source: Statistics Canada, NPI calculations. 12

13 6/7/216 Northern Ontario s population is getting older, faster By 241, people aged 65+ will make up over 3% of the population in Northern Ontario. In the next 15 years, non working age individuals will increase from 53 to 8 for every 1 working age individuals, compared to 66 in the Ontario. Closing the dependency gap with Ontario by bolstering working age population levels is one strategy that can be used to target levels of inmigration, immigration, non permanent residents and youth retention. This is an opportunity for PSEs in collaboration with communities to be front and centre in reversing one of Northern Ontario s biggest challenges. See, for example, Greater Sudbury s Economic Strategic Plan which targets 1, new jobs and 3, more residents by % 29.7% 21.6% 18.% Projected Population by Age Cohort Ages 19 Ages 2 44 Ages Ages % 25.9% 24.% 19.4% , 6, 5, 4, 3, 2, 1, 1, 2, Demographic Dependency Ratio Northern Ontario Annual Net Migration Target Ontario Source: Ministry of Finance, NPI calculations. Northern Ontario s Aboriginal population is growing From 213 to 241, the Aboriginal population is expected to increase by 32%, from 12, to 135, 16.5% 1.3% Projected Aboriginal Population and Labour Force Total Aboriginal Population Northern Ontario Aboriginal Share of Labour Force Northwest Aboriginal Share of Labour Force Northeast 27.1% 14.6% Aboriginal labour force is expected is increase considerably. In districts such as Kenora and Rainy River, the Aboriginal share of the labour force is expected to exceed 4% by 24 Human capital among the working age population is lower in the North than compared to Ontario and Canada Human capital among the Aboriginal population is lower than the rest of the population Immigrants have relatively high levels of human capital across Ontario and in the North Increasing educational levels among the Aboriginal population in particular will be one of the largest barriers to growth in the North going forward. 11,99 134, Human Capital Index, Working Age Population Total Immigrants Francophones Aboriginals Canada Ontario Northeast Northwest Source: NPI calculations based on Statistics Canada and Ministry of Finance. 13

14 6/7/216 Education is key to a productive economy Higher education increases participation in the labour market and decreases unemployment Future productivity in Northern Ontario is expected to decrease as a result of: 1. Declining overall population 2. Increasing Aboriginal population with low education levels Productivity is expected to decline in all districts, but most prominently in Kenora, Rainy River and Manitoulin districts This is only part of the story Currently, 63.4 percent of jobs require some post secondary credentials in Canada (77 8% by 231) Northern Ontario, and the Aboriginal population in particular, is well below this number If education levels in Northern Ontario remain at their current level or decline in the future while skill requirements of the workforce rise, the region will end up with people without jobs and jobs without people Unemployment rate decreases with higher education Labour productivity is expected to decline (213=1) Northeast Northwest Total No Certificate High School Postsecondary Credentials Timiskaming Ontario Canada Source: NPI calculations based on Statistics Canada. Where to go from here? 1. Bolster the population in Northern Ontario i. Immigration ii. Non permanent residents (i.e., foreign workers, foreign students) iii. In migration (both from within Ontario and from other provinces) iv. Youth retention v. Use dependency ratios to target population growth 2. Increase educational levels among the Aboriginal population i. Enhance access in both rural and urban areas (i.e., increased investment and ii. iii. quality, infrastructure, online methods, etc.) Community based and cultural tailored methods See NPI publications: Picking up the Pieces and A Strategy for Change Personal tutors See new research from NBER: The Production of Human Capital in Developed Countries PSE s in Northern Ontario may be front and centre of the strategies 14

15 6/7/216 Northern Immigration Population Projections Northeast districts - Cumulative population growth Northwest districts - Cumulative population growth 5% 5% Nipissing, 3.25% Parry Sound,.57% Kenora, 3.4% % Manitoulin,.21% % -5% Greater Sudbury,.8% Timiskaming, % -5% Thunder Bay, -2.56% -1% Algoma, -1.15% Cochrane, % -1% -15% -15% -2% Sudbury, % Rainy River, % -25% -2% Source: Author s calculations based on Ontario, Ministry of Finance, Ontario Population Projections, (Toronto, 214). 15

16 6/7/216 Age Cohorts Northeast Ontario - Distribution of population by age % 1% 2% 3% 4% 5% 6% 7% 8% 9% 1% Northwest Ontario - Distribution of population by age % 1% 2% 3% 4% 5% 6% 7% 8% 9% Source: Author s calculations based on Ontario, Ministry of Finance, Ontario Population Projections, (Toronto, 214). Current & Projected Dependency Canada Ontario Gr. Sudbury Kenora Nipissing Thunder Bay Cochrane Timiskaming Algoma Rainy River Sudbury Manitoulin Parry Sound Source: Author s calculations based on Ontario, Ministry of Finance, Ontario Population Projections, (Toronto, 214). 16

17 6/7/216 Source: Author s calculations based on Statistics Canada, CANSIM database, table Youth net migration, by district (Northeast) Nipissing Parry Sound Manitoulin Sudbury /22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/21 21/ / / /214 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/21 21/ / / /214 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/21 21/ / / /214 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/21 21/ / / / Greater Sudbury 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/21 21/ / / / Timiskaming 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/21 21/ / / / Cochrane 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/21 21/ / / / Algoma 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/21 21/ / / /214 Source: Author s calculations based on Statistics Canada, CANSIM database, table

18 6/7/216 Youth net migration, by district (Northwest) Thunder Bay Rainy River Kenora Source: Author s calculations based on Statistics Canada, CANSIM database, table Northeast migration targets Target 1 = to hold dependency ratio at current level (i.e. just shy of.5 for Thunder Bay as of 215, see slide 14) Target 2 = allowing dependency ratio to rise to match the provincial rate by 241 (i.e. just shy of.7, see slide 14) 2,5 Algoma 2, Cochrane 35 Manitoulin 2,5 Nipissing 2, 1,5 1, 5-5 1,5 1, , 1,5 1, 5-1, , Parry Sound , 3,5 3, 2,5 2, 1,5 1, , Greater Sudbury Sudbury , Timiskaming Source: Author s calculations based on Ontario, Ministry of Finance, Ontario Population Projections, (Toronto, 214). 18