The Conference Board of Canada expects the St. Catharines-Niagara economy will grow by an estimated 1.5 per cent in 2024, which is roughly on pace with what is anticipated for the overall national economy. Growth is expected to accelerate to 2.5 per cent by 2025, as inflation pressures begin to ease and interest rates begin to come down. Photo Credit: The Niagara Independent.
The Conference Board of Canada expects the St. Catharines-Niagara economy will experience slow growth in 2024 but avoid a major downturn.
While the regional economy is expected to experience sluggish growth in 2024, major gains were seen in the region in 2021 and 2022. Growth wasn’t as strong in 2023, but still outpaced many nearby regions.
In comparing the growth rates of major cities and regions across Canada, the Conference Board of Canada considers the output of the St. Catharines-Niagara regional economy jointly.
According to the report, the St. Catharines-Niagara region has been among the strongest in terms of recent economic growth in all of Canada.
In 2021 and 2022, the St. Catharines-Niagara economy grew at an average annual rate of 5.5 per cent. That growth rate was so robust that it represented the second highest rate of regional economic growth in all of Canada.
That growth slowed to an estimated 1.3 per cent in 2023, but growth is expected to rebound beginning this year. Growth across Canada slowed in 2023 in large part due to rising interest rates and the Bank of Canada’s efforts to cool the economy and tackle inflation. But many expect interest rates to begin to come down in 2024.
The Conference Board of Canada expects the St. Catharines-Niagara economy will grow by an estimated 1.5 per cent in 2024, which is roughly on pace with what is anticipated for the overall national economy. Growth is expected to accelerate to 2.5 per cent by 2025, as inflation pressures begin to ease and interest rates begin to come down.
The St. Catharines-Niagara economy managed to avoid the kind of negative economic growth that plagued other regions in Ontario and Canada at least in part because the resiliency of its tourism sector, according to the Conference Board of Canada.
Household income per capita in the Niagara region has experienced robust growth since 2020. That year, the average household was bringing in roughly $47,800. This year, the Conference Board of Canada expects household income per capita to reach $55,100.
Retail sales also showed strong growth in the St. Catharines-Niagara region since 2020. Retail sales totaled $5.83 billion in 2020 but are expected to reach $8.0 billion this year, a growth of 37.2 per cent in just four years.
One major economic concern remains regional adaptation to higher levels of immigration and migration.
Housing starts in 2024 are expected to be lower than housing starts in 2022, despite a growth in population in that two-year period of roughly 22,000 people and a major focus on promoting housing supply growth from governments at Queen’s Park and in Ottawa.
As is the case in many parts of Canada, housing prices have increased significantly as housing supply has not kept pace with population growth in recent years.
That has sent housing costs soaring, with rental costs in St. Catharines soaring 39 per cent just in the past two years.
To continue to foster long-term economic growth, Niagara region will need significant improvements in housing supply. A housing consultant recently told regional council that 298,600 new housing units will be needed by 2051.
Niagara Regional Chair Jim Bradley said in a 2023 year-end interview that the region would remain “laser-focused” on addressing housing supply issues in the years ahead.
Despite that comment, Niagara region has fallen short in facilitating significant enough growth in housing supply in recent years. Local government officials will have to work with industry to cut red tape and accelerate housing growth to maintain strong regional economic growth in the years to come.
Jay Goldberg is the Ontario Director at the Canadian Taxpayers Federation. He previously served as a policy fellow at the Munk School of Public Policy and Global Affairs. Jay holds a Ph.D. in Political Science from the University of Toronto.
