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TORONTO: Ontario’s economy lumbered into low gear for the second quarter, growing a modest 0.4 per cent after stalling in the first three months of the year, new Ministry of Finance figures show.
The small gain in gross domestic product was driven by increases in household spending and exports, which had declined in the first quarter, provincial Finance Minister Charles Sousa’s department said in a statement.
Fewer new homes were being built, but higher home resale figures increased renovation activity and contributed to the growth, while spending by businesses on machinery and equipment fell almost five per cent for its third consecutive quarterly decline.
While Sousa’s office boasted the economy “is growing at a modest pace despite a challenging and changing global landscape,” Progressive Conservative MPP Vic Fedeli painted a less rosy picture of the rise, which amounts to an annualized rate of 1.4 per cent.
“When we look at the spring budget, they based their revenue on 2.7 per cent growth this year,” said Fedeli (Nipissing), his party’s finance critic.
“They’re going to spend based on that . . . but they’re not going to make the numbers” barring an economic surge in the last six months of the year, he added.
Nevertheless, Sousa’s office said the second-quarter growth supports the forecast average from private-sector economists for 2 per cent growth this year and 2.4 per cent in 2016.
“In fact, Ontario is among the growth leaders in Canada and is expected to remain so for the next year,” the statement said.
“Major economic indicators in the second quarter have shown advances in Ontario that have significantly exceeded Canada-wide performance, including indicators of consumer spending, business and housing activity such as retail sales, wholesale trade, manufacturing sales and housing starts.”
The government said Ontario’s economy has increased 14.4 per cent from the recession low six years ago and is 8.9 per cent above a peak achieved before the recession.
A lack of growth in the first quarter was blamed on harsh winter weather, a labour dispute at ports on the U.S. west coast and retoolings that idled several Ontario auto assembly plants.
It’s hoped the Canadian dollar, which has declined steadily this year and now hovers around 77 cents (U.S.), will help boost manufacturing and exports by making Canadian products cheaper on world markets.
