How Ontario’s Exports Boost Its Economy and Create Jobs

Ontario is Canada’s largest and most populous province, with a diverse and dynamic economy. Ontario’s exports of goods and services account for about 35% of its gross domestic product (GDP), making it a major contributor to Canada’s trade balance and economic growth. In this article, we will explore what Ontario exports, why it matters, and how it benefits the province and its people.

What does Ontario export?

According to the latest data from World’s Top Exports, Ontario’s top 10 exports in 2022 were:

Gold (unwrought): US$13.1 billion (7.8% of Ontario’s exports)
Mid-sized automobiles (piston engine): $11.74 billion (6.9%)
Large automobiles (piston engine): $10 billion (5.9%)
Miscellaneous medications: $5.5 billion (3.2%)
Motor vehicle body parts, accessories: $4.7 billion (2.7%)
Small automobiles (piston engine): $3.4 billion (2%)
Breads, pastry, cakes, biscuits, wafers, similar goods: $2.7 billion (1.6%)
Miscellaneous motor vehicle parts: $2.6 billion (1.5%)
Large spark-ignition engines: $2.1 billion (1.3%)
Coins: $1.96 billion (1.2%)

These products represent 39% of the total value of Ontario’s global shipments, which amounted to US$210.2 billion in 2022. The remaining 61% consisted of a variety of other products, such as nickel, items made with precious metals, petroleum oils, hybrid automobiles, aluminum, diamonds, plastics, pharmaceuticals, machinery, chemicals, wood, paper, food, beverages, and services.

Why does Ontario export?

Ontario exports for several reasons, such as:

To access larger and more diverse markets for its products and services
To increase its competitiveness and productivity by adopting best practices and technologies from other countries
To diversify its sources of income and reduce its dependence on domestic demand
To create more jobs and income for its workers and businesses
To foster innovation and entrepreneurship by exposing its firms to new ideas and opportunities
To enhance its reputation and influence in the world by building strong trade relationships

How does Ontario benefit from exporting?

Exporting brings many benefits to Ontario, such as:

Economic growth

Exporting stimulates economic activity by increasing production, sales, profits, and investment. According to a study by the Conference Board of Canada, every $100 increase in exports generates $250 in additional GDP for Ontario.

Job creation

Exporting supports employment by creating direct and indirect jobs for workers involved in producing, transporting, marketing, and servicing exported goods and services. According to the same study, every $100 increase in exports creates 1.8 jobs for Ontarians.

Higher wages

Exporting raises wages by increasing the demand for skilled workers who can produce high-quality goods and services that meet international standards. According to Statistics Canada, workers in export-oriented industries earn 11% more than workers in non-export-oriented industries.

Lower prices

Exporting lowers prices by increasing competition and efficiency in domestic markets. By exporting surplus goods and services that exceed domestic demand, Ontario can avoid price inflation and benefit from economies of scale.

More choices

Exporting increases choices by expanding the variety and quality of goods and services available to consumers and businesses in Ontario. By importing complementary goods and services that are not produced domestically or are produced at a higher cost, Ontario can enhance its consumption and production possibilities.

Ontario Exports: Trends and Statistics

Ontario is Canada’s most populous and economically productive province, accounting for about 40% of the country’s GDP and 35% of its exports. Ontario has a diverse and dynamic economy, with strengths in manufacturing, services, agriculture, mining and innovation. In this blog post, we will look at some of the trends and statistics of Ontario’s exports, focusing on the main products, markets and challenges.

Motor Vehicles and Parts: The Leading Export Sector

Ontario is home to Canada’s automotive industry, which produces cars, trucks, buses, engines, parts and accessories. According to the Observatory of Economic Complexity (OEC), motor vehicles and parts were Ontario’s top export product in 2022, accounting for 35.3% of the province’s total exports. Ontario exported C$79.7 billion worth of motor vehicles and parts in 2022, mainly to the United States (93.4%), Mexico (2.4%) and China (1.3%). Ontario’s automotive exports increased by 8.8% from 2021 to 2022, following a sharp decline of 23.5% from 2019 to 2020 due to the COVID-19 pandemic and its impact on global demand and supply chains.

Precious Metals and Stones: The Rising Export Star

Ontario is also rich in natural resources, especially precious metals and stones such as gold, silver, platinum, diamonds and nickel. According to World’s Top Exports, precious metals and stones were Ontario’s second-largest export product in 2022, accounting for 9.8% of the province’s total exports. Ontario exported US$13.1 billion worth of precious metals and stones in 2022, mainly to the United Kingdom (40.6%), India (15.4%) and Hong Kong (14%). Ontario’s precious metals and stones exports surged by 51.9% from 2021 to 2022, driven by high global prices and demand for gold and nickel.

Mechanical Equipment: The Diversified Export Category

Ontario is also a leader in innovation and technology, producing a wide range of mechanical equipment such as turbines, pumps, valves, generators, compressors, refrigerators and air conditioners. According to OEC, mechanical equipment was Ontario’s third-largest export product in 2022, accounting for 10.1% of the province’s total exports. Ontario exported C$22.8 billion worth of mechanical equipment in 2022, mainly to the United States (80%), Mexico (4.7%) and China (3%). Ontario’s mechanical equipment exports grew by 11.6% from 2021 to 2022, reflecting the province’s competitiveness and diversity in this sector.

Challenges and Opportunities for Ontario’s Exports

Ontario faces several challenges and opportunities for its export performance in the coming years. Some of the challenges include:

The uncertainty and volatility of global trade relations, especially with the United States, Ontario’s largest trading partner.
The environmental and social impacts of resource extraction and production, especially for the mining and automotive sectors.
The competition from emerging markets and low-cost producers, especially in Asia and Latin America.
The need for innovation and adaptation to changing consumer preferences and technological trends.

Some of the opportunities include:

The potential for new trade agreements and partnerships with other countries and regions, especially in Europe, Asia and Africa.
The demand for green and clean technologies and products, especially for renewable energy, electric vehicles and recycling.
The availability of skilled labour and talent, especially in the fields of science, engineering and technology.
The support from government policies and programs that promote trade diversification, innovation and sustainability.

References:

http://www.rbc.com/economics/economic-reports/pdf/canadian-fiscal/ontbud2019.pdf

http://www.ontla.on.ca/library/repository/mon/29012/333112.pdf

https://web.archive.org/web/20170202030319/https://www.services.gov.on.ca/locations/serviceDetails.do?id=192

https://web.archive.org/web/20170918155030/https://www.mndm.gov.on.ca/en/mines-and-minerals/mining-act/mining-act-modernization/exploration-permits

https://oec.world/en/profile/subnational_can/ontario?redirect=true
https://www.worldstopexports.com/ontarios-top-exports/
https://www.ontario.ca/page/international-trade-statistics
https://en.wikipedia.org/wiki/Economy_of_Ontario

https://www.conferenceboard.ca/e-library/abstract.aspx?did=10469