III.

Economic Activities

Ontario has the largest and most diversified economy of any Canadian province. It is a major manufacturing and agricultural center and has one of the highest incomes per capita of any province. Ontario’s economic success is based on advantages such as its plentiful natural resources, cheap power, a skilled and well-educated workforce, and convenient transportation links to markets elsewhere in Canada, the United States, and overseas.

In 2005 Ontario’s gross domestic product (GDP) was C$537.7 billion, or two-fifths of the Canadian total; by comparison the figure in 1990-1991 was C$280.6 billion. Per capita income in Ontario in 2001 was C$35,185, and the distribution of GDP among economic sectors was 2 percent primary (extractive industries such as mining, fishing, and forestry), 32 percent secondary (manufacturing and construction activity), and 66 percent service (including information services, real estate, and banking and financial services).

In the late 19th century Ontario’s agricultural economy began to diversify with the development of commercial and manufacturing industries. These growth areas were greatly enhanced by the concurrent development of hydroelectric power and the exploitation of the mineral wealth of Ontario’s massive portion of the Canadian Shield. A growing population provided a capable labor force and a large domestic market for goods and services. This was expanded by the growth of trade with overseas countries, other Canadian provinces, and most importantly the United States.

Roughly speaking, Ontario can be divided into three economic regions. The north is the storehouse for the province’s mineral wealth and the center of extractive industries. The south and especially the southwest is an agricultural region. Heavy industry and manufacturing were traditionally clustered near Windsor on the Detroit River and in the area near the western edge of Lake Ontario. However, the ease of modern transportation has changed this concentration, and manufacturing and assembly plants are now located throughout the southern reaches of the province.

A.

Employment and Labor

The Ontario labor force contains 6.9 million people and makes up two-fifths of the total Canadian workforce. It is highly diversified, highly skilled, and well educated. About 25 percent of Ontario’s workforce is employed in government, education, health care, the arts, culture, and recreation; 25 percent in manufacturing and construction; and almost 15 percent in wholesale and retail trade. Also, 11 percent of Ontario’s workforce is employed in managerial, business, finance, and administrative positions; about 3 percent in primary activities such as fishing, agriculture, and mining; and the remainder in trades, transport, scientific and technical positions, food and accommodation services, and other occupations. English is the working language of most businesses in Ontario, with French as the next most important language. However, more than 50 other major languages are spoken, which gives Ontario advantages in international business dealings. The unemployment rate for 2006 in Ontario was 6.5 percent, compared to the Canadian average of 7 percent.

B.

Economic Sectors

Ontario is Canada’s richest province. It leads the nation in manufacturing, producing more than half of Canada’s manufactured goods and four-fifths of the country’s exports. The economy, however, is both balanced and diversified, with agriculture, forestry, and mining making important contributions. Knowledge-intensive industries are among the fastest-growing in the economy and the financial and service sectors are robust.

B.1.

Agriculture

Ontario is a major producer of corn, lamb, fruit, soybeans, nursery plants and flowers, poultry, eggs, and vegetables. Production of beef cattle, hogs, winter wheat, and general dairy products (especially cheese) are also significant.

About one quarter of Canada’s farms are located in Ontario. In 2001 there were 59,728 farms, compared with 68,630 in 1991. The average farm size was 92 hectares (227 acres). About 90 percent of the farmland in Ontario is in the southern part of the province.

In its early history, Ontario was a region of general farming, mostly on a near-subsistence level. Wheat began to be planted as a cash crop in the 1820s, with much of it being exported to Britain (and later to the United States and other parts of Europe). Since that time, because of urbanization, industrialization, and the opening of western Canada as a grain-growing region, southern Ontario has developed a more diversified agriculture. Now, mixed farming (the combination of crop cultivation and livestock raising), coupled with strong local specializations and marketing, prevail in the area.

The growth of urban centers in Ontario led to the concentration of dairy farming nearby. There are two major dairy-farming regions in the province. One is in the broad belt of land from Oshawa, which is near Toronto, to London, which is the most populous part of the province. The other area is in the St. Lawrence Lowlands between Ottawa and Cornwall. Ontario’s cheese plants are the chief outlet for the milk produced, and much of Canada’s cheese production is concentrated in these lowlands.

Fruit is grown in several areas along the shores of the Great Lakes. The two most important of these areas are the Niagara fruit belt, between Hamilton and the Niagara River, and the lakeshore fruit and vegetable belt, between Hamilton and Toronto. The Niagara belt specializes in cherries, pears, peaches, grapes, and plums. Wineries are also concentrated there. The lakeshore belt produces mainly apples and berries and a variety of truck crops (see Truck Farming) for nearby cities. These two zones are threatened by the increasing development of residential suburbs, and there is concern for their future as agricultural regions. A region of less intense specialization stretches from Toronto along Lake Ontario to the Kingston area. Here apples and cannery crops such as sweet corn, tomatoes, and peas are important.

Tobacco is grown commercially from near Windsor to Cobourg on Lake Ontario but is most concentrated in the sandy soils north of Lake Erie, in the Saint Thomas–Tillsonburg-Simcoe area. Most of the Canadian domestic tobacco crop is produced there.

In Essex and Kent counties, in the extreme southwest, farming centers on the growing of corn, sugar beets, tobacco, cannery crops, and fresh fruits and vegetables. The warm waters of Lake Erie affect the climate of the surrounding area, making it well suited for growing grapes. As such, Point Pelee and Pelee Island, located on the lake, are known for their wineries. Tomatoes are grown in greenhouses that are under contract to juice-producing plants in Leamington and Chatham. Sugar refineries are found in Chatham and Wallaceburg. Some of the best agricultural lands in this area have been developed through the drainage of marshland.

Between the regions of specialized agriculture and the margins of the Canadian Shield is a zone of general farming and livestock production. Cattle, dairy products, and hogs are the main sources of farm income. Corn and soybeans are important cash crops. Hay, clover, and alfalfa take up the largest part of the cropland in this zone, although canola (rapeseed) is also important. The reclaimed Holland Marsh between Toronto and Lake Simcoe and the Thedford Marsh northeast of Sarnia are devoted to a variety of vegetables (the former serving the large Toronto market nearby), while grain and clover seed are produced in the Ottawa Valley in the Renfrew area. Apples are grown commercially east of Owen Sound along Nottawasaga Bay.

In the Canadian Shield area of northern Ontario, farming is scattered in small patches. There are few full-time farmers in the north. The majority of farms are located in the several clay belts within the shield. The frost-free season is short and unreliable, and rain tends to occur in late summer during the harvest period. In such an area, the choice of crops is limited mainly to hay, potatoes, and root crops.

B.2.

Fur Production

The fur trade was the economic magnet that first drew Europeans to Ontario, but it is now of only marginal importance to the economy of the province. Still, Ontario remains one of the largest fur producers in Canada. Beaver, raccoon, muskrat, otter, and marten are the leading animals trapped. Fur gathering is largely confined to northern areas, but some southern swamp and marsh areas yield muskrat. Fur farming is also important in Ontario, accounting for three-fifths of the value of all furs produced in the province. Mink, fox, and chinchillas are raised on fur farms.

B.3.

Forestry and Fishing

Forests cover 683,000 sq km (264,000 sq mi) of Ontario, or 74 percent of the province. Forestry and timber exports have been central to Ontario’s development since the early 19th century, when the Napoleonic Wars (1799-1815) cut off British timber supplies in northern Europe. By the mid-19th century, growing American and Canadian needs had added to the demand for Ontario’s timber. The development of the pulp and paper industry in the 20th century spurred growth in Ontario’s forest economy. By 1996, 90,000 people were employed in the industry, producing wood products and pulp and paper and related materials.

About one-half of Ontario’s forest stock is in softwoods that grow in the north, about one-third is mixed forest, and the rest is hardwoods from the south. Spruce, pine, and fir are the leading commercial softwoods. Poplar, birch, and maple are the main commercial hardwoods. Traditionally, the lumber industry was centered in the upper Ottawa Valley, but now sawmills stretch along the southern margin of the Canadian Shield and near the Minnesota border. Wood pulp is the main forestry product, with pulp and paper mills found near power sites all across the shield. There are pulp mills along the northern shore of Lake Superior at Marathon, Terrace Bay, and Nipigon, and another one at Smooth Rock Falls, in eastern Ontario. Paper is made in several areas near the western end of Lake Superior. In western Ontario there are also mills at Fort Frances, Dryden, and Kenora; Kapuskasing and Iroquois Falls are producers in the eastern part of the forest zone.

Ontario’s fishing activity can be divided into commercial fishing and recreational or sport fishing. Although fishing was an important economic activity in the 19th century, the commercial catch is relatively small today. Overfishing, pollution, habitat destruction, and the introduction of predators have greatly reduced catches, although stocks began to revive in the 1990s. A large part of Canada’s freshwater catch comes from Ontario. Lake Erie is the principal fishing area, producing about half of the value of the catch. Perch, smelt, and pickerel are the leading commercial fishes in Lake Erie. Whitefish are taken in Lake Superior, Lake Huron, and Georgian Bay. The major species of fishes caught during recreational fishing are perch, smelt, walleye, and smallmouth bass. Aquaculture, or fish farming, is a growing industry in Ontario. Rainbow trout are the most popular fish at fish farms.

B.4.

Mining

Ontario ranks first in Canada for mining, and almost 50,000 Ontarians are employed in the mining industry. Metals mined in the ore-rich Canadian Shield include gold, nickel, copper, zinc, and cobalt. Silver and platinum are also important.

The mining districts of the Canadian Shield were discovered when work crews penetrated the region while building the transcontinental railway. The large copper deposits of the Sudbury region were first discovered in 1883, and several years later the copper ores were found to contain nickel as well. Sudbury is now one of the world’s most important producers of nickel, and the region also mines gold, silver, cobalt, and platinum.

Gold occurs widely throughout northern Ontario and has been mined since the mid-19th century. One-half of Canada’s gold production comes from Ontario. Iron ore is mined in the Lake Superior region. Ontario is also a major source of magnesium, which is worked on the southeastern margins of the Canadian Shield.

Southern Ontario leads Canada in the production of salt and construction materials such as clay, sand, and gravel. Some gypsum is obtained from the Niagara Escarpment south of Hamilton. Petroleum and natural gas have long been produced south of Lake Huron, and were at one time centered on the aptly named town of Petrolia. There are offshore gas wells along the western edges of Lake Erie.

B.5.

Manufacturing

Ontario’s chief economic activity, by a wide margin, is manufacturing. Ontario typically accounts for over one-half of Canada’s national manufacturing output. The manufacturing sector contributed 24 percent of Ontario’s GDP in 1997, and 18 percent of Ontario’s labor force (or over one million people) were employed in some aspect of manufacturing in 2004.

Many factors have contributed to Ontario’s industrial development. The Great Lakes waterway made it convenient to combine iron ore from the Lake Superior region with coal from Pennsylvania in order to produce iron and steel in Ontario. There were excellent natural resources, including minerals, forests, and streams for waterpower. A relatively large population and a skilled labor force also played a part. Proximity to centers of population in the United States provided a convenient export market. However, in the 20th century it was foreign investment in Ontario, particularly by American sources, and the establishment of branch factories, again largely by U.S. businesses, that increased Ontario’s industrial output. The North American Free Trade Agreement (NAFTA), which removed tariffs on imports and exports in Mexico, Canada, and the United States beginning in 1994, also benefited the province’s economy.

Most of Ontario’s manufacturing is concentrated within or near the so-called Golden Horseshoe, which extends around the western end of Lake Ontario from Oshawa through Toronto and Hamilton to the Niagara River. Toronto and its sprawling suburbs form the principal industrial center, and account for almost half of Ontario’s manufacturing establishments. Industries in the Toronto area include food processing and manufacturing machine tools, rubber goods, motor vehicle parts, heavy electrical machinery, agricultural implements, soaps and washing compounds, telecommunications and computer equipment, metal products, furniture, and fixtures.

The chief industry of Ontario is the manufacture of motor vehicles, other transportation equipment, and parts for these machines. Manufacturing is centered at Windsor, Saint Thomas, St. Catharines, Alliston, Oakville, and near Ingersoll, although many component plants exist in the Toronto-Hamilton area. The industry has expanded greatly since the creation of the Canada-United States Automotive Products Agreement (Autopact) of 1965, which removed Canadian import tariffs on cars as long as automakers produced as many cars in Canada as they sold in Canada.

Food and beverage production is varied and widely scattered. Kitchener, an industrial city west of Toronto, has meat-packing plants. Leamington, in the far west near Lake Erie, has canneries. Distilleries and breweries, with a growing number of small, specialist microbreweries, are scattered throughout the more populous parts of southern Ontario. Wineries are chiefly in the Niagara River region. Thunder Bay, with enormous grain storage facilities, also mills flour.

Ontario’s mineral resources are the basis for steelworks at Hamilton and Sault Sainte Marie and metal refineries at Port Colborne and Sudbury. Its timber resources are processed at pulp and paper mills in Thunder Bay and Kenora. Other industries include the manufacture of petroleum products and petrochemicals at Sarnia, textiles and fabricated metals at Brantford and Cambridge, plastic and rubber products at Kitchener, farm implements at St. Catharines, and high-tech and computer goods (including software) in Ottawa and its suburbs and in the Toronto region.

B.6.

Services

Services account for more than 70 percent of jobs in present-day Ontario, and almost 4 million people work in service industries. The major service fields in the province are wholesale and retail trade, health care and other social assistance, professional or technical occupations, education, and lodging and food services.

Ontario is a trading economy. Its chief exports are motor vehicles and parts, machinery and mechanical appliances, electrical machinery, non-ferrous metals and related products, and pulp and paper. The top five imports are motor vehicles and parts, machinery and mechanical appliances, electrical machinery, non-ferrous metals and allied products, and scientific, professional, and photographic equipment. Ontario’s largest trading partner within Canada is the province of Québec. Externally the province’s largest trading partner is the United States, receiving the vast majority of Ontario’s total exports. Major international markets outside of the United States include the United Kingdom and Germany.

Tourism is also of major importance in Ontario, and the province has the largest tourist industry in Canada. Most international visitors to Ontario come from the United States (over 30 million in 1997).

C.

Infrastructure

Ontario’s infrastructure includes modern multilane highways, international airports, railways, and canals. The province also has an up-to-date and efficient telecommunications network.

C.1.

Energy

Ontario’s longstanding public utility, Ontario Hydro, was restructured by the Electricity Act of 1988. The new company, Ontario Power Generation (OPG), currently supplies about 85 percent of all electricity used in Ontario. Its mandate is to reduce its share of power production to 35 percent by 2009, as part of an effort to create a more competitive electricity market. In 2000 Ontario had a total production of 149 million megawatts.

Most hydroelectric sources in the province have already been tapped, and although nuclear power generation has been an attractive alternative since the 1960s, support has declined due to concern over safety issues and the safe removal of nuclear waste. Natural gas is the chief fuel used for residential, commercial, and industrial heating in Ontario. It is largely imported from western Canada and provides more energy to Ontario than either electricity or oil. Oil is refined in Ontario and provides energy principally for transportation. Ontario plants produce enough refined petroleum not only to meet provincial needs but also to export small amounts to other provinces and to the United States.

C.2.

Transportation

Water routes were the original modes of transportation in Ontario. Gradually, a network of roads and railways was developed and eventually air transport made even remote northern outposts accessible. The major water link to the outside world is the 295-km (183-mi) long St. Lawrence Seaway, which permits ocean-going vessels into the Great Lakes. Principal ports in Ontario include Thunder Bay, Hamilton, and Toronto, although container traffic offloaded elsewhere and transported by road and rail has greatly diminished the shipping importance of the capital.

Air services run scheduled flights into 60 airports throughout the province. Lester B. Pearson Airport in Toronto is Canada’s busiest airport, serving 23 million passengers annually. A project to renovate and expand the airport was begun in the 1990s. Ontario has an extensive railway system that transports passengers and freight. About 13,351 km (8,296 mi) of railroad track lace the province. VIA Rail offers intercity passenger services and the Government of Ontario GO Transit provides commuter trains and buses in the Golden Horseshoe area. Toronto has a modern subway and rapid transit system. An extensive network of paved roads and highways, covering some 72,000 km (45,000 mi), crosses the province. The 14-lane section of Highway 401 running through Toronto is one of the most traveled superhighways in North America.

C.3.

Communications

Ontario is Canada’s English-speaking communications hub. There are more than 40 daily newspapers published in the province, primarily in English, but also in French, Italian, and Chinese. More than 300 weeklies are also published, as are hundreds of regional and special interest papers. The leading newspapers are the Toronto-based Globe and Mail and National Post, both of which are distributed nationally, and the Toronto Star, Canada’s largest paper. Other prominent papers are The Citizen (Ottawa), The Spectator (Hamilton), and The London Free Press (London). Toronto is also the center for the magazine industry in Canada.

Ontario also forms the nexus of English radio and television services in Canada. The government-owned Canadian Broadcasting Corporation (CBC) is headquartered in Ottawa, the national capital, and has extensive radio and television production facilities in principal cities throughout the province. Toronto is home to a number of other national and regional television networks including the CTV network, CanWest Global, and CityTV. A large group of specialized cable channels, some of which broadcast in a variety of languages, are also located in the city. The Ontario provincial government operates an educational television network from Toronto. Additionally there are upwards of 200 private television and radio stations in the province that serve a large variety of communal needs and interests.

Ontario’s telecommunications network, private and public, is extensive. A full range of voice and data services are available, with extensive use of wireless services, including cellular telephones. Use of satellites for communication and broadcasting is widespread, and computer technology and the Internet are basic tools for homes and businesses.