COVID losses exceed $3 billion in eastern Ontario
By Chad Ingram
As of the beginning of June, the estimated economic losses created by the COVID-19 pandemic in eastern Ontario totalled more than $3 billion, with the equivalent of 80,000 jobs lost.
During an online meeting in June, members of the Eastern Ontario Leadership Council heard a presentation from members of consulting firm Limestone Analytics regarding economic projections stemming from the COVID-19 crisis. Among the partners of the council are the Eastern Ontario Wardens’ Caucus, of which Haliburton County is a part, the Eastern Ontario Regional Network (owned by the EOWC), and the Eastern Ontario Mayors’ Caucus. The firm’s roster includes a number of economics professors from Queen’s University.
From February until the start of June, “We are looking at a hit of approximately $3.1 billion to the economy of eastern Ontario,” Bahman Kashi, founder and president of Limestone Analytics and adjunct faculty at Queen’s, said during the webinar. That lost gross domestic product entailed the loss of 80,000 full-time equivalent jobs.
“A share of this is jobs that are actually no longer there, and a portion of it is people just working less hours,” Kashi said. The tourism sector has been hit hard, with some 23,000 of those 80,000 FTE job losses in food provision, accommodation and retail. The firm’s projections, which are based on a continued, phased re-opening of the economy by the provincial government, include losses for eastern Ontario by the end of the calendar year totalling between $6.8 and $8.1 billion, the difference based largely on the tourism sector’s ability to recover.
A change in consumer behaviour means spending on travel, recreation and tourism is down, and this decrease creates ramifications for other areas of the economy.
“Their projections will also have implications on the projections of other sectors, because people may be spending elsewhere, or the inputs that would be purchased from other sectors may not be purchased,” Kashi said. “So, the impact will be felt by other sectors, too.”
Proportionally, eastern Ontario has actually fared better than the province at large.
“There is less manufacturing,” Kashi said, adding that manufacturing took a huge hit near the start of the pandemic so areas that rely heavily on manufacturing, such as some west of Toronto, subsequently took a sharp economic dive. Eastern Ontario’s industrial composition, with many jobs in the financial services, for instance, is such that it is has allowed it to remain less affected than other regions of the province.
Kashi said that a diversification of sectors in general can create at least some degree of resiliency in a regional economy. “This pandemic gives us some measure, so we can use this pandemic and look at how different regions have been impacted . . . and then try to see if we can explain that based on some parameters.”
The firm’s projections for Ontario as whole include lost GDP by the end of 2020 of between an estimated $89 billion and $107 billion, again dependent largely on the tourism sector’s ability to rebound.
In response, the EOWC is proposing a new gigabyte project to enhance fixed broadband internet connectivity throughout the region.
“COVID-19 had exposed the serious lack of internet access and capacity for rural residents and businesses across eastern Ontario. EORN and the EOWC are proposing a new fixed broadband project that will be capable of delivering speeds of one Gbps (gigabit per second) for up to 95 per cent of the homes and businesses across the EOWC region,” reads a release from the EOWC. “EORN is ready to work with the federal and provincial governments, as well as other key stakeholders in order to move the project forward quickly.”
That project would be in addition to the EOWC’s $213-million cell gap project, which seeks to fill all existing gaps in cellular broadband connectivity throughout the eastern portion of the province with the construction of new communications towers. A request for proposals was recently released for that project, which is expected to take about four years to complete.
Members of the EOWC have been meeting with federal MPs to discuss possible solutions to helping revive regional economies.
“The EOWC looks forward to continuing its work with the federal government in order to implement solutions that help local economies, reduce costs, and ultimately make changes that improve the lives of the people of Ontario, and across Canada,” the release reads.
In light of the COVID-19 crisis, the EOWC has reframed a number of priorities, chief among them a review of municipal long-term care facilities.
“The EOWC is currently preparing an RFP in order to engage a consultant and looks forward to providing an update on the study findings in the coming months. This research will help provide a portrait of the ‘situation on the ground’ and better inform provincial ministries of the current municipal realities.”