While many federal politicians were debating whether the fact that Canada has just registered two consecutive quarters of economic decline was a “technical recession” or a “real recession,” some Ontario economic data from the Financial Accountability Office of Ontario (FAO) also had some bad news to report. As federal Liberals tried to pretend that national data didn’t really represent Canada being in recession – which it did – Ontario Progressive Conservative politicians also seemed to remain in denial about Ontario’s many serious problems. Yet as Ontario represents about 40 per cent of the national economy, it shouldn’t be a surprise that the province is just as troubled as the country in general.
The headline-grabbing element of the FAO report was the fact that Ontario’s labour force – the number of people working in the province – declined by 71,300 in the first quarter of 2026. This was the greatest rate of decline since these data were first tracked in 1976, with the exception of the pandemic years. Many of the people leaving the workforce were doing so because they had given up looking for work in a difficult hiring environment – the so-called discouraged worker effect. Ontario lost 52,900 jobs in the first quarter of this year, almost completely offsetting the job gains of 58,900 for the whole of 2025. Unemployment was particularly acute for young people from 15 to 24, where the unemployment rate increased to 15.9 per cent.
As for real Gross Domestic Product (GDP), Ontario’s declined by 0.3 per cent in the first quarter of the year, the second decline in the past three quarters and proof that Ontario is also in recession. Although the FAO’s latest economic forecast done in February 2026 expected growth in the provincial economy of 1.4 per cent for the year, with moderate inflation of 2.1 per cent, this will be revised down in the coming months as the negative economic data pile up. Despite all the big talk from governments about how they are investing in new housing, a decline in residential development spending was one of the reasons for Ontario’s poor performance.
Ontario government reaction to these bad results blamed the tariff war initiated by the U.S .and the sharp increase in oil prices as a result of the war in Iran. There’s no doubt that these two factors affected Ontario’s and Canada’s economic growth, but Ontario’s decline has been going on much longer than that. In fact, the Ford government, first elected in 2018, has done very little to improve upon the record of the previous provincial Liberals who dragged down the province’s economy just as the federal Liberals under Trudeau and now Carney have dragged down the country’s economy.
Ontario’s problems are very similar to those at the federal level – excessively high taxes, heavy and increasing regulatory burden, expanding government at the expense of the private sector and spending on frivolous things while core services decline. The Ontario government has a massive advertising campaign going on right now to tell Ontarians that things are really great, while all facts indicate the contrary. Perhaps they should dedicate our scarce tax dollars to actually improving things for Ontarians by reducing taxes and the size of government, instead of lying to us.
Both Premier Doug Ford and Prime Minister Mark Carney have enjoyed poking U.S. President Donald Trump and the U.S. administration ever since Trump was elected. Although this seems to have gotten them some partisan support from Canadians who are obsessed with hating Trump, it’s pretty hard to see how this helps Ontario and Canada. We can’t control Trump’s antics, but we can control our own, and delaying actual negotiations with the U.S. on the most important trade deal by far for Canada for partisan advantage is juvenile and damaging to Canada.
Oddly, both Ford and Carney seemed to have changed their tune recently. Could it be the looming deadline for re-negotiating the trade agreement that suddenly got their attention? Ford expressed some urgency in reaching a deal with the U.S. Where was this guy six months ago when we had ample time to undertake a decent, detailed negotiation? And Carney went to New York and made the bizarre statement that “Canada Strong” would help “Make America Great Again.” I don’t think anyone had that one on their bingo card.
The root problem is that enough Canadians keep rewarding politicians who like to pretend they’re standing up to Trump while the Canadian economy declines. Despite the fact Trump tariffs have also damaged the U.S. to some extent, and that U.S. businesses would also very much like the certainty of a trade agreement with Canada, the U.S. economy is still greatly outperforming ours. The Canadians who are still taking some superficial satisfaction from Canadian politicians “taking on” Trump need to consider the bigger picture and endorse politicians who take into account the massive damage being done to Canada by fighting with our most vital trading partner, not only their own partisan political fortunes. Our politicians may lie, but the economic data do not.
She has published numerous articles in journals, magazines & other media on issues such as free trade, finance, entrepreneurship & women business owners. Ms. Swift is a past President of the Empire Club of Canada, a former Director of the CD Howe Institute, the Canadian Youth Business Foundation, SOS Children’s Villages, past President of the International Small Business Congress and current Director of the Fraser Institute. She was cited in 2003 & 2012 as one of the most powerful women in Canada by the Women’s Executive Network & is a recipient of the Queen’s Silver & Gold Jubilee medals.
