This quarterly economic forecast for the province of Ontario examines the economic outlook for the province, including gross domestic product (GDP), output by industry and labour market conditions.
- Real GDP will decline by 6.4 per cent in 2020 but rise by 5.2 per cent in 2021.
- Many pieces of data indicate that growth will be strong in the third quarter.
- The province has done much better at handling the second wave of the pandemic, which sets the province up for a better-than-average fourth quarter.
- Economic growth will slow significantly in the first half of 2021 as industries that require a vaccine remain below pre-pandemic levels.
- Government programs have supported household incomes, though much of that income support has been directed to savings. Thus there is upside risk to household spending over the next year.
- Investment will struggle in 2020, but project-based investment (including work on the Darlington and Bruce power plants), combined with strong housing starts, means investment will be solid in 2021 and 2022.
- An already high level of debt and a large COVID-19–related deficit means government spending will be restrained in the outer years of the medium term.