The economy of Ontario is diversified.

Ontario Ontario ( ; ) is one of the thirteen provinces and territories of Canada.Ontario is located in the geographic eastern half of Canada, but it has historically and politically been considered to be part of Central Canada. Located in Central Ca ...

is the largest economy in

Canada Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by tot ...

, making up around 38% of Canadian GDP. Though

manufacturing Manufacturing is the creation or production of goods with the help of equipment, labor, machines, tools, and chemical or biological processing or formulation. It is the essence of secondary sector of the economy. The term may refer to a r ...

plays an important role in Ontario's economy responsible for 12.6% of Ontario's GDP, the

service sector The tertiary sector of the economy, generally known as the service sector, is the third of the three economic sectors in the three-sector model (also known as the economic cycle). The others are the primary sector (raw materials) and the second ...

makes up the bulk, 77.9%, of the economy. Ontario's net debt-to-GDP ratio will rise to 40.7% in the year 2019–2020. Ontario is the most populous province of Canada, with a population of approximately 14.19 million permanent residents in 2017. It is Canada's leading manufacturing province, accounting for 46% of the manufacturing GDP in 2017. The CPI inflation of the province in 2018 was confirmed to 2.2%, with the unemployment rate at 5.6% as of January 2019. This unemployment rate is based on the 447,400 unemployed people in Ontario. As of 2018, the province's

credit rating A credit rating is an evaluation of the credit risk of a prospective debtor (an individual, a business, company or a government), predicting their ability to pay back the debt, and an implicit forecast of the likelihood of the debtor defaulting. ...

ranged from AA-negative (Moody's) to A+-stable (S&P). In 2017, Ontario's main international exports were

motor vehicles A motor vehicle, also known as motorized vehicle or automotive vehicle, is a self-propelled land vehicle, commonly wheeled, that does not operate on Track (rail transport), rails (such as trains or trams) and is used for the transportation of pe ...

and parts (35.3%), mechanical equipment (10.1%),

precious metal Precious metals are rare, naturally occurring metallic chemical elements of high economic value. Chemically, the precious metals tend to be less reactive than most elements (see noble metal). They are usually ductile and have a high lustre. ...

s and stones (9.8%), electrical machinery (3.9%), and plastic products (3.6%). Ontario's main international imports were motor vehicles parts and accessories (22.6%), mechanical equipment (14.4%), electrical machinery (11.4%), plastic products (3.9%) and pharmaceutical products (3.4%). Ontario was the leading state/province for attracting

foreign direct investment A foreign direct investment (FDI) is an investment in the form of a controlling ownership in a business in one country by an entity based in another country. It is thus distinguished from a foreign portfolio investment by a notion of direct co ...

(FDI) in North America in 2013, with $7.23bn. This accounted for more than one-tenth of all FDI in North America. It was also the 4th biggest state for outward FDI, recording $7.74bn. As of 2017, Ontario is the second fastest-growing provincial economy in Canada, the first being Alberta.

History

The beginning of recorded history in Ontario is marked by the fur trade between Europeans and Native Americans, from which spawned various battles between various European and Native Americans peoples (the French, English,

Iroquois The Iroquois ( or ), officially the Haudenosaunee ( meaning "people of the longhouse"), are an Iroquoian-speaking confederacy of First Nations peoples in northeast North America/ Turtle Island. They were known during the colonial years to ...

and

Hurons The Wyandot people, or Wyandotte and Waⁿdát, are Indigenous peoples of the Northeastern Woodlands. The Wyandot are Iroquoian Indigenous peoples of North America who emerged as a confederacy of tribes around the north shore of Lake Ontario w ...

). As a result of the

Jay Treaty The Treaty of Amity, Commerce, and Navigation, Between His Britannic Majesty and the United States of America, commonly known as the Jay Treaty, and also as Jay's Treaty, was a 1794 treaty between the United States and Great Britain that averted ...

in 1793, the fur trade spread to the Northwest and the need for better transport facilities (in addition to the population) grew. 6000 bushels of wheat were bought at Kingston in 1799, and flour was sold in Montreal and Toronto in 1800. The

American Revolution The American Revolution was an ideological and political revolution that occurred in British America between 1765 and 1791. The Americans in the Thirteen Colonies formed independent states that defeated the British in the American Revolut ...

French Revolution The French Revolution ( ) was a period of radical political and societal change in France that began with the Estates General of 1789 and ended with the formation of the French Consulate in November 1799. Many of its ideas are considere ...

, and the

Napoleonic Wars The Napoleonic Wars (1803–1815) were a series of major global conflicts pitting the French Empire and its allies, led by Napoleon I, against a fluctuating array of European states formed into various coalitions. It produced a period of Fren ...

(in addition to subsequent immigration from the

War of 1812 The War of 1812 (18 June 1812 – 17 February 1815) was fought by the United States of America and its indigenous allies against the United Kingdom and its allies in British North America, with limited participation by Spain in Florida. It bega ...

) greatly stimulated the burgeoning

timber trade There are multiple market layers for wood products. Each country has its own domestic market that may be connected to a regional or global market. Timber supply to domestic markets in many tropical forest countries is largely provided by informal lo ...

in Ontario. The St. Lawrence became a monopoly route as other regions (like New York) lacked the waterways and rivers needed to transport timber. Between 1864 and 1866, 400 million board feet of British North American lumber passed through New York, and wood exports to the States from Canada were worth almost $7 million in 1866 to 1867. All the while, the demand for wheat and other agricultural products was growing, but was subjected to considerably greater competition from other regions, and the livestock and dairy industries, in addition to banks, which began to flourish. In the early 20th century, Western Canada swelled with the influx of immigrant populations, and Ontario made the shift from being an export to domestic economy: the exported butter and cheese industry shifted into the milk industry for domestic consumption, winter dairying expanded, and the Ontario's apple industry declined in exports but increased consumption in Ontario and Western Canada. In this time period, rail lines were constructed across Ontario and that the economy shifted toward greater industrialism and tapping into mineral resources—the mining, pulp and paper, and agriculture industries (in addition to hydro-electric power development) grew, and led to the growth of towns. Further industrial growth (which included those such as road construction, automobile factories, and the tourist trade) were encouraged by the war period.

Sectors

Approximately four-fifths of Ontario's GDP is composed of service sector industries. The remaining one fifth is the goods sector. More than half of the goods sector is manufacturing. One-third is the construction sector, and a tenth is the utility sector.

High tech

The province has a large technology sector, with one of North America's largest concentration of technology companies. Large Tech hubs exist in

Ottawa Ottawa (, ; Canadian French: ) is the capital city of Canada. It is located at the confluence of the Ottawa River and the Rideau River in the southern portion of the province of Ontario. Ottawa borders Gatineau, Quebec, and forms the core ...

Toronto Toronto ( ; or ) is the capital city of the Canadian province of Ontario. With a recorded population of 2,794,356 in 2021, it is the most populous city in Canada and the fourth most populous city in North America. The city is the ancho ...

Markham Markham may refer to: It may also refer to brand of of clothing which originates from South Africa which saw it's establishment in 1873. Biology * Markham's storm-petrel (''Oceanodroma markhami''), a seabird species found in Chile and Colombia * ...

and Waterloo.

Agriculture

The number of Ontario residents living on farms has been steadily declining for decades. In 2016 Ontario's farm population was 160,415, or 1.2 percent of the Ontario population. By way of contrast, in 1931, 800,960 Ontarians lived on farms. The decline in farm population is partly driven by consolidation of the agricultural industry. There are fewer farms than in the past: The 2016 Census of Agriculture indicates that the number of

farms A farm (also called an agricultural holding) is an area of land that is devoted primarily to agricultural processes with the primary objective of producing food and other crops; it is the basic facility in food production. The name is used fo ...

declined 4.5% between 2011 and 2016 and, as of 2016, stands at 49,600 farms. However the average size of these farms is increasing. The average Ontario farm size was in 2016, up 0.2% from 2011. Since 1981, the average farm size has increased by 27.3% from . Ontario's total farm area has declined 2.5% since 2011 to in 2016. However, cropland increased 15.5% to just over 56 thousand acres (361,575 km²), the highest level since 1941.

Eastern Ontario Eastern Ontario (census population 1,763,186 in 2016) (french: Est de l'Ontario) is a secondary region of Southern Ontario in the Canadian province of Ontario which lies in a wedge-shaped area between the Ottawa River and St. Lawrence River. It s ...

led the increase with a gain of 31% in cropland.

Manufacturing

The manufacturing sector employed 764,000 persons in August 2019. The province has lost 300,000 manufacturing jobs in the ten years 2003–2013.

Energy

The ''Green Energy and Green Economy Act, 2009'' (GEGEA), takes a two-pronged approach to creating a

renewable-energy economy Renewable energy commercialization involves the Diffusion of innovations, deployment of three generations of renewable energy technologies dating back more than 100 years. First-generation technologies, which are already mature and economica ...

. The first is to bring more

renewable energy sources Renewable energy is energy that is collected from renewable resources that are naturally replenished on a human timescale. It includes sources such as sunlight, wind, the movement of water, and geothermal heat. Although most renewable energy ...

to the province and the second is the creation of more

energy efficiency Energy efficiency may refer to: * Energy efficiency (physics), the ratio between the useful output and input of an energy conversion process ** Electrical efficiency, useful power output per electrical power consumed ** Mechanical efficiency, a ra ...

measures to help conserve energy. The bill would also appoint a Renewable Energy Facilitator to provide one-window assistance and support to project developers in order to facilitate project approvals. The approvals process for transmission projects would also be

streamline Streamline may refer to: Business * Streamline Air, American regional airline * Adobe Streamline, a discontinued line tracing program made by Adobe Systems * Streamline Cars, the company responsible for making the Burney car Engineering ...

d and for the first time in Ontario, the bill would enact standards for renewable energy projects. Homeowners would have access to incentives to develop small-scale renewables such as low- or no-interest

loan In finance, a loan is the lending of money by one or more individuals, organizations, or other entities to other individuals, organizations, etc. The recipient (i.e., the borrower) incurs a debt and is usually liable to pay interest on that d ...

s to finance the capital cost of renewable energy generating facilities like solar panels. Solar panels are also manufactured in Ontario.

Mining

Hard-rock mining has taken place in the province for over 140 years (as of 2022). The mining industry in Ontario produces more than 30 different metal and non-metal mineral products, and is responsible for a major percentage of Canada's

nickel Nickel is a chemical element with symbol Ni and atomic number 28. It is a silvery-white lustrous metal with a slight golden tinge. Nickel is a hard and ductile transition metal. Pure nickel is chemically reactive but large pieces are slow to ...

gold Gold is a chemical element with the symbol Au (from la, aurum) and atomic number 79. This makes it one of the higher atomic number elements that occur naturally. It is a bright, slightly orange-yellow, dense, soft, malleable, and ductile met ...

copper Copper is a chemical element with the symbol Cu (from la, cuprum) and atomic number 29. It is a soft, malleable, and ductile metal with very high thermal and electrical conductivity. A freshly exposed surface of pure copper has a pinkis ...

and

platinum-group The platinum-group metals (abbreviated as the PGMs; alternatively, the platinoids, platinides, platidises, platinum group, platinum metals, platinum family or platinum-group elements (PGEs)) are six noble, precious metallic elements clustered to ...

metals production. The extraction of metallic minerals is concentrated in Northern Ontario, while the southern portion of the province produces

salt Salt is a mineral composed primarily of sodium chloride (NaCl), a chemical compound belonging to the larger class of salts; salt in the form of a natural crystalline mineral is known as rock salt or halite. Salt is present in vast quantitie ...

gypsum Gypsum is a soft sulfate mineral composed of calcium sulfate dihydrate, with the chemical formula . It is widely mined and is used as a fertilizer and as the main constituent in many forms of plaster, blackboard or sidewalk chalk, and drywall. ...

lime Lime commonly refers to: * Lime (fruit), a green citrus fruit * Lime (material), inorganic materials containing calcium, usually calcium oxide or calcium hydroxide * Lime (color), a color between yellow and green Lime may also refer to: Botany ...

nepheline syenite Nepheline syenite is a holocrystalline plutonic rock that consists largely of nepheline and alkali feldspar. The rocks are mostly pale colored, grey or pink, and in general appearance they are not unlike granites, but dark green varieties are al ...

and structural materials (

sand Sand is a granular material composed of finely divided mineral particles. Sand has various compositions but is defined by its grain size. Sand grains are smaller than gravel and coarser than silt. Sand can also refer to a textural class of s ...

gravel Gravel is a loose aggregation of rock fragments. Gravel occurs naturally throughout the world as a result of sedimentary and erosive geologic processes; it is also produced in large quantities commercially as crushed stone. Gravel is classifi ...

, stone), along with some

petroleum Petroleum, also known as crude oil, or simply oil, is a naturally occurring yellowish-black liquid mixture of mainly hydrocarbons, and is found in geological formations. The name ''petroleum'' covers both naturally occurring unprocessed crud ...

. As of 2014, the mining industry produced about $11 billion worth of minerals. Derisory fees are charged by the government for prospecting licences ($25.50)"Service Details: Prospectors licence" Government of Ontario webpage.
/ref> and exploration permits (nil),"Exploration Permits" MNDM website
/ref> in keeping with the duty of economic development of the province. The exploration permit process is meant as a means to notify interested parties, such as surface landowners, of the activities of miners. The development of a mine proceeds through "advanced exploration" to "production" status, the legislation for which is detailed in the Mining Act of Ontario; this covers hard-rock, aggregate,

diamond Diamond is a Allotropes of carbon, solid form of the element carbon with its atoms arranged in a crystal structure called diamond cubic. Another solid form of carbon known as graphite is the Chemical stability, chemically stable form of car ...

and petroleum mines.Revised Statutes of Ontario: text of "Mining Act"
/ref>

Infrastructure

Road

Southern Ontario has a well-developed transportation infrastructure that allows for the efficient transportation of goods. The province has a number of

controlled-access highways A controlled-access highway is a type of highway that has been designed for high-speed vehicular traffic, with all traffic flow—ingress and egress—regulated. Common English terms are freeway, motorway and expressway. Other similar terms i ...

with the 400-Series highways which run primarily west to east from Michigan and New York through to Quebec and facilitate trade with the United States.

Air

The province has a number of significant airports including the 30th busiest airport in the world Pearson International,

Ottawa Macdonald–Cartier International Airport Ottawa/Macdonald–Cartier International Airport or Macdonald–Cartier International Airport (french: L'aéroport international Macdonald-Cartier) is the main international airport serving Ottawa, Ontario, Canada, and its metropolitan area kno ...

and Munro International located in

Hamilton Hamilton may refer to: People * Hamilton (name), a common British surname and occasional given name, usually of Scottish origin, including a list of persons with the surname ** The Duke of Hamilton, the premier peer of Scotland ** Lord Hamilt ...

which is one of the largest cargo airports in Canada and is Canada's busiest overnight cargo airport.

Marine

There is also a significant maritime industry in Ontario in spite of its position mid-continent as it benefits from the

Great Lakes The Great Lakes, also called the Great Lakes of North America, are a series of large interconnected freshwater lakes in the mid-east region of North America that connect to the Atlantic Ocean via the Saint Lawrence River. There are five lakes ...

Welland Canal The Welland Canal is a ship canal in Ontario, Canada, connecting Lake Ontario and Lake Erie. It forms a key section of the St. Lawrence Seaway and Great Lakes Waterway. Traversing the Niagara Peninsula from Port Weller in St. Catharines t ...

and St. Lawrence Seaway. Major Great Lakes ports include the Port of Hamilton, Port of Thunder Bay and Port of Windsor.

References

External links

{{Canada topic, Economy of