Ontario's GDP numbers are out for the third quarter of 2011 at the Ministry of Finance's site and they're not bad. Third quarter growth was 0.7%, or a not bad 2.7% on an annualized basis. However that comes on the back of the second quarter results of -0.2% GDP growth or -0.8% on an annualized basis.
Since the provincial fiscal year begins with the second quarter, just a simple calculation shows that growth for the first six months of this fiscal year (second and third quarter 2011) growth was around 0.5% or 1% on annualized basis. That's not going to be good for the provincial deficit, especially considering there's a lot of provincial labour contracts that are rising a lot higher than 3% (i.e. physicians and teachers).
Another issue with that 1% growth over the first six months of the fiscal year is that the Canadian population grows at approximately 1% a year (yeah I need to source this, but I read it yesterday and need to look for it). So using a guess of Ontario population growth of 0.5% over the first six months, that means the GDP growth per capita over that term is pretty feeble making people feel poorer.
Hopefully GDP growth over the last two quarters of the fiscal year will be higher, otherwise consider the widespread estimate of the $16 billion deficit to be on the low side. Also expect Ontario to get a lot more in equalization payments.
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