2007 Decline

The period from 1990 to 2005 was overall moderately promising for manufacturing in Canada and Ontario. Other than two brief dips in 2001 and 2003, manufacturing sales in Ontario rose each year from 1994 until 2006. Similarly, employment in Ontario’s manufacturing industry experienced solid growth during the same period, except for the period from 2001 to 2005. Canada was one of the few major economies to experience consistent employment growth in manufacturing during this time.

Although the industry began to see a downturn in 2005, it was not significantly affected until the end of 2007. In 2007–2008, the world was hit by a major global recession, now considered to be the biggest economic crisis since the 1930s. A decrease in consumption and spending during the recession only exacerbated the underlying trends in the manufacturing industry: more automation, cheaper labour in foreign countries, decreases in North American car sales, and other factors causing substantial decline. Manufacturing employed around 1.1 million Ontarians at its height in 2004, but by 2010, over 300,000 of these jobs were lost. The textile industry across all of Canada dipped 60 per cent from 2004 to 2011, and the auto industry in Ontario was also severely hit. The big three American auto makers (General Motors, Ford, and Chrysler) all had a major presence in Ontario and employed a large share of its manufacturing workers. A sharp decline in sales put General Motors and Chrysler at risk of going under. It took a joint bailout from the American, Canadian, and Ontarian governments to ensure financial stability and protect as many of these jobs as was possible. While the governments involved lost money by the end of the bailout, it is widely accepted that this action ensured the continued existence of the automakers in the region. Furthermore, auto sales have been improving with fair annual consistency since 2010.

Since 2011, manufacturing sales and employment in Ontario have been increasing on an annual basis. While sales have almost reach their pre-recession peak, employment in the industry is still lagging in terms of growth, partly due to the changing and evolving economy. Check back next time for the conclusion of this series on the history of Ontario’s manufacturing industry, when we look to the future of the industry.

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