Deficit concerns are plaguing the governments of Canada and Ontario. They run to the tune of $26.0 billion and $14.4 billion at 1.4% and 2.2% of the Gross Domestic Product respectively. Every year, the provincial and federal public debt is mounting at 3.6% of the GDP in Ontario. This rate is greater than that for the nominal GDP growth, signaling that this growing public debt in Ontario cannot be sustained.
The world economy is quite lack luster at present for which the interest rates have been kept the lowest so that spending can be encouraged. But with such low interest rates, mostly the long term investors can benefit, while those looking for fixed incomes could stand to suffer.
If one considers the number of high rise buildings in North America, Toronto is undoubtedly the clear leader for such buildings that are under construction. In addition, the numbers of housing starts are quite substantial, with their figures in October and November 2012 surpassing what they were during the same months of 2011.
This has been owed to the third quarter of quantitative easing in 2012, after which the Toronto zone experienced a total of retail sales $16.6 billion in the year 2012; a small decrease with respect to what the figures were after the third round of quantitative easing in 2011. (Ref: Toronto Economic Indicators).
The U.S. economy looks to be on the verge of recuperating and this has led experts to predict that the economic condition of Toronto will grow by leaps and bounds and could also be one whose growth rate will surpass other cities outside Western Canada in the year 2013.
The reason for the same has been attributed to the increased number of jobs created in the U.S. Added to this, is the renewed demand for its exports, for the most part of which are prepared in Ontario. Car- buying by the U.S. citizens is once again gaining momentum and this is indeed good news for the automotive industry of Ontario.
If one considers the real GDP forecast of Toronto, its growth rate is predicted to be 2.8 per cent, while it was 1.9% last year. It is developing very fast and being considered as one of Ontario’s fastest growing areas.
Further, its average yearly growth in the period 2014-2017 is expected to be 2.7%; Toronto having been blessed with a varied industry comprising the manufacturing, finance, public sector, multi specialty medical centers as well as the tourism sectors. With its area-population appending annually by approximately 100,000 people, the growth should be to the tune of 2% - 2 ½ % so that the productivity will be profitable enough.
The manufacturing industry is beginning to flourish again. In Oakville, Ford has added a third shift at its assembly plant. It is presumed that the manufacturing production will leap in the year 2013 by about 4.6%, while the yearly average could be about 2.9% in 2014-2017. Despite the aforementioned projections, the productivity, even in 2017, will most probably fail to reach its levels in 2000, when it was at its peak.
Improvements in the Canadian economy are being impeded from further growth owing to the gridlock in the Greater Toronto and Hamilton area. Heavy traffic snarls and the nastiest of daily commutation times in this region beats any other in North America.
With approximately 6.6 million people residing here, the average expenditure for each household in order to deal with the regular grind comes out to be $2,800 annually and this is hampering the growth of the economy by a probable $130 billion and also holding back the creation of more than 80,000 jobs.
With the swearing in of Ontario’s new premier, Liberal Leader Kathleen Wynne on Monday, it remains to be seen whether the budget that she will put forth will be approved by the opposition parties. Ontario’s budget deficit will make sure that she certainly has a demanding task ahead of her.