Statistics Canada has released experimental estimates of gross domestic product for the period 2001 to 2009 for 33 census metropolitan areas. The results of course reinforce what we already know – that Canada’s economic activity is concentrated in its cities and half of our GDP is produced in just six cities – Toronto, Montreal, Vancouver, Calgary, Edmonton and Ottawa-Gatineau. Of course,the Toronto CMA is the dominant center with about 20 percent of Canada’s GDP being produced there. However, there is more to these results than just an affirmation of what we think we know.
This is not the first effort to produce urban GDP estimates. The Conference Board in its Metropolitan Economic Trends series regularly produces estimates of GDP and even GDP forecasts for Canada’s urban areas. My albeit limited experience with the Conference Board numbers suggests that these estimates are difficult to construct and may be quite variable from year to year with frequent revisions of past estimates as well as any forecasts.
Statistics Canada is wise to refer to these numbers as experimental. Getting a handle on the GDP of a CMA must be tough especially in dense urban areas where there are many jurisdictions with mobile employees, employers and firms. As well, these numbers end in 2009 and we all know that the period afterwards was a pretty tough one for parts of central Canada. Still, the results are interesting when a further bit of processing is done. Its always fun to try and provide some additional value added.
Figure 1 plots the per capita GDP of these 33 CMAs in 2009. Montreal is the median at 41,505 dollars. Per capita GDP was highest in Regina, Calgary and Edmonton and lowest in Barrie, Oshawa and Abbotsford. Out of the top ten, six of them are in western Canada, three are in Ontario/Quebec and one in Atlantic Canada. Of the bottom ten, two are in western Canada, six are in Ontario, and two are in Quebec. Needless to say, they suggest that the shift in economic power to the west from central Canada predates the Great Recession and has been well underway since the start of the 21st century.
Figure 2 plots the growth rate of nominal per capita for these CMAs between 2001 and 2009. The greatest growth was for Regina, Saskatoon and St. John’s while the lowest growth was for Guelph, Windsor and Oshawa. Interestingly enough, the top ten also include Victoria, Edmonton, Sudbury, Moncton, Kingston, Quebec City and Saguenay - but not Calgary which comes in at 11th spot. The bottom ten are all from central Canada with nine of them from Ontario and one from Quebec. While Toronto contributes 20 percent of Canada’s GDP, its rate of nominal per capita GDP growth was the fourth lowest in the country. Indeed, if one imagines that inflation over this period was at about 2 percent per year, Toronto’s 17 percent nominal per capita GDP growth means its real per capita GDP has essentially stood still for a decade.
Of course, one needs to temper this analysis with the fact that a reason per capita GDP growth is as low as it is in some CMAs can be because of population change as well as GDP performance. As Figure 3 shows, Toronto’s poorer per capita GDP growth performance needs to be counterbalanced by the fact that it remains a magnet for migration on par with western CMAs and without the benefit of a resource sector boom.
Of these 33 CMAs, over the period 2001 to 2009, it had the sixth fastest growing population. Oshawa’s decline in per capita GDP is a function of its depressed auto sector manufacturing economy as well as its role as a bedroom community for the GTA, which gave it the third fastest growing CMA population in the country. Thunder Bay and Saguenay – which fare relatively well in per capita GDP and per capita GDP growth, also had shrinking populations over this time period. Regina, which had the highest per capita GDP growth – growth of 69 percent – only had population growth of about 6 percent. Rapidly growing populations in the pursuit of economic opportunity may understate per capita GDP growth in booming regions while population decline in slower GDP growth economic regions may overstate their per capita GDP performance.