Alberta Productivity Growth is Low

I pointed out in this post that that Alberta's GDP growth of late was mainly due to population growth, not productivity growth (GDP growth of 3.9% in 2013 versus population growth of around 3.2%). That's still better than Ontario's. That amount of rapid population growth makes it hard to integrate everyone into high productivity jobs. Plus Alberta has been a big user of low wage TFWs, which is pretty much the best way to lower your per person productivity.

Here's a National Post article that basically says the same thing:

"Alberta’s oil sector may have been a “job machine” over the past decade, but it came in “dead last” in labour productivity growth compared to other North American oil-producing jurisdictions, according to a report.

During the 2001-2012 period, Alberta ranked last with respect to its average growth rate in real per worker GDP and second last in real per capita GDP, said Fraser Institute analysts in a report published Thursday.

The two indicators show that much of the province’s economic growth is coming from expanding inputs like labour “rather than improving the productivity (and thus income) of individual workers,” the Vancouver-based think tank said."

If even Alberta has low productivity growth, Canada's as a whole is in trouble.

Ontario's Demographics: Intra-Provincial Migration, People Still Leaving Ontario

It has been sometime since I've looked at Ontario's demographics, especially my favourite topic, intra-provincial migration. Here's my last post on it.

The province has released (on June 18th) the first quarter of 2014 numbers here. From the report:

"Over the last 12 months, Ontario’s population grew by 122,544 or 0.9%, lower than growth of 129,584 during the previous year. Among the provinces, Alberta and Saskatchewan had the highest population growth rates (3.2% and 1.9% respectively). Canada’s population growth rate over the period was 1.1%."

Ontario's population is 13,620,600 by April 1st 2014. So the 0.9% growth rate seems to be the new normal for Ontario, less than the Canadian average. That's important because given Ontario's low productivity growth, the low population growth tends to dominate the rather low GDP growth for Ontario. Ontario has had GDP growth rates of 1.3% in both 2012 and 2013, the majority of which would have been from population growth. As Ontario's population growth ebbs lower, one would expect overall GDP growth to also ebb lower.

Here's the part about intra-provincial migration:

"In the first quarter of 2014, Ontario had a net loss of 4,654 people to other provinces compared to a net loss of 6,823 people in the same quarter of 2013. Ontario experienced net gains in its exchanges with four of the 12 other provinces and territories, with the largest net gains from Quebec (1,133) and New Brunswick (276). Ontario’s largest net losses were with Alberta (-4,210) and British Columbia (-713). Over the last 12 months, Ontario’s total net interprovincial migration loss was 10,870 compared to a net loss of 21,366 during the previous year."

I'm actually surprised that Ontario did so much better over the past 12 months compared to the previous 12 months. I'm not really sure why. Here's a breakdown of the intra-provincial numbers over the past few quarters:

People coming to Ontario from other provinces:

Third Quarter 2012, 22,300
Fourth Quarter 2012, 11,000
First Quarter 2013, 13,500
Second Quarter 2013, 22,900
Third Quarter 2013, 20,600
Fourth Quarter 2014, 13,500
First Quarter 2014, 13,500

Here's the numbers for people leaving Ontario for other provinces:

Third Quarter 2012, 27,900
Fourth Quarter 2012, 15,100
First Quarter 2013, 20,400
Second Quarter 2013, 27,700
Third Quarter 2013, 21,600
Fourth Quarter 2014, 13,900
First Quarter 2014, 18,200

Departures Minus Arrivals:
Third Quarter 2012, 5,600
Fourth Quarter 2012, 4,100
First Quarter 2013, 6,900
Second Quarter 2013, 6,800
Third Quarter 2013, 1000
Fourth Quarter 2014, 400
First Quarter 2014,  4,700

What's interesting about these numbers is the big decrease in Ontario's losses to other provinces after the second quarter of 2013. For the first quarter of 2014 the departures minus arrivals bumped up again. The second quarter numbers should be interesting since that is when people seem to move the most. Also I would be curious to know how long Ontario has been negative for intra-provincial migration. According to this, Alberta's GDP growth in 2013 was 3.9%. Assuming population growth for Alberta was also 3.2% for 2013, that's GDP growth per capita of 0.68% versus 0.40% for Ontario. That doesn't really seem like much more.

One last point. If Alberta's population grew by a massive 3.2% in the last 12 months how does that compare to their GDP growth and thus what is their GDP growth per capita?

Ontario Third Quarter 2012 GDP Numbers

I haven't been able to find any media reporting on the third quarter GDP numbers for Ontario (which is in and of itself strange), but this Ministry of Finance web page looks to be reporting 0.1% (non-annualized):

"Ontario’s real Gross Domestic Product (GDP) on an industry basis and at basic prices increased 0.1% in the third quarter of 2012, following gains of 0.6% in the second quarter and 0.6% in the first quarter.  Output in the goods-producing sector declined by 0.9% while service sector output rose by 0.3% in the third quarter."

That's exactly in-line with the overall number for Canada at 0.1%. I remember that being 0.6% on an annualized basis, but that number for Ontario doesn't seem to be reported here. I would like it, mainly because it would give more information if Ontario was ahead of Canada or behind. With rounding, Ontario's growth could be anywhere 0.06% to 0.14%, which could have a big effect on the annualized number.

In any case, that's not a good number and the fourth quarter isn't looking good either. Considering that Ontario's population growth is 1.2% (or at least it was in 2011 who knows what the number is now) per year, that means that on a per capita basis, GDP declined in the third quarter (1.2% per year is about 0.3% per quarter). The fourth quarter numbers should be interesting, as should the first of 2013.

Third Quarter Canadian GDP Growth Not Good, Not Good At All

With news that the Canadian GDP growth in the third quarter only increased at 0.6% on an annualized basis, one has to wonder what the number was for Ontario. We won't get the provincial number for a while, however assuming it is close to the federal one, that means with population growth of around 1.2% per year in Ontario, Ontario probably had negative GDP growth per capita, which isn't good for tax revenues or for the deficit.

From the above linked CBC article:

"Statistics Canada said Friday the country's gross domestic product expanded at a 0.6 per cent annualized pace, down from 0.8 per cent during the second quarter because of less investment by businesses and slumping exports.
For comparison purposes, the U.S. economy is currently expanding at a 2.7 per cent annual pace.
Canadian exports shrank by two per cent during the period, the largest decline since the second quarter of 2009."

So the previous quarter also likely had negative GDP growth for Ontario, so it's not a one off. For Ontario, was the decline in exports from manufacturing or petroleum products or a mixture of both? If it is from a decline in petroleum products, Ontario's third quarter performance may not be that bad, if not then Ontario's growth could be the same or worse than the federal number.