GOLDSTEIN: Ontario’s employment rate still hasn’t recovered from pandemic, study says

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Ontario’s employment rate in four of five economic regions of the province is still below pre-pandemic levels, according to a new study by the Fraser Institute.

The fiscally conservative think tank says Southwestern Ontario is the only region where the employment rate, meaning the share of the employed working-age population over the age of 15, has recovered from the pandemic.

Even there, the study found, the employment rate as of last year had increased by just 0.6% percentage points above 2019 levels, the year before the pandemic hit in 2020.

By contrast, the employment rate in Eastern Ontario was 2.0 percentage points below 2019 levels; 1.9 percentage points below 2019 levels in Ottawa and the Greater
Golden Horseshoe area and 0.1 percentage points below 2019 levels in Northern Ontario.

For the province as a whole, the employment rate fell from 61.6% in 2019 to 60.0% in 2025.

The Fraser Institute Study — The Five Solitudes of Ontario: A Regional Analysis of Labour Market Performance Since 2015 — says employment rates are a key measure of an economy’s strength.

“In almost every corner of the province of Ontario, economic pain persists with the employment rate still not having recovered to pre-pandemic levels,” said study co-author Jake Fuss, director of Ontario prosperity studies at the Fraser Institute.

September unemployment rate in Ontario above national average: StatCan

Statistics Canada reported last week that Ontario’s unemployment rate in September was 7.0% or 0.5 percentage points above the national average of 6.5%.

The Fraser Institute study also found that Ontario’s economic dependency ratio, meaning the amount of government financial transfers relative to employment income, increased in every region of the province from 17.4 in 2015 to 17.9 in 2023, with the biggest increases in Southwestern, Eastern and Northern Ontario.

Between 2021 and 2023, government transfers averaged about $28 for every $100 of employment income in Eastern Ontario, $26 in Northern Ontario, $25 in Southwestern Ontario and $16 in the Greater Golden Horseshoe and Ottawa areas.

Southern Ontario had strongest annual growth rate: Study

In terms of employment growth in the post-pandemic period from 2021 to 2025, the study found Southwestern Ontario had the strongest average annual growth rate of 4.0%; the Greater Golden Horseshoe, at 3.2%, was about the same as the provincial average, while Ottawa was at 3.0% with Northern and Eastern Ontario lagging behind at 2.4%.

“Taken together,” the study concludes, “indicators suggest that Eastern and Northern Ontario face the most concerning labour market challenges, while the Greater Golden Horseshoe and Ottawa generally remain the strongest performing regions.

“Southwestern Ontario falls between these groups. Its strong employment growth contrasts with its below-average participation and employment rates, and relatively high economic dependency.

“These differences demonstrate why provincial averages alone provide an incomplete picture of Ontario’s labour market performance.”

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