With the lifting of pandemic health measures, the Toronto region’s economic recovery is back on track and poised for growth in the coming months.
Recently released data by the Toronto Region Board of Trade, through its Recovery Tracker tool, indicates the economy bounced back in February and the board said “we expect to see a continued upward trend as businesses regain momentum and welcome back visitors and workers.”
“The light switch that COVID-19 turned off on our downtown in 2020 has been flipped back on,” said Jan De Silva, President and CEO of the Toronto Region Board of Trade. “As workers return and major events resume, we expect the downtown core will once again become the beehive of activity it was pre-pandemic. This data shows that when fully open, Toronto’s economy thrives.”
Toronto Mayor John Tory said the data is very encouraging news for the city as it continues its reopening and recovery efforts.
“Pre-pandemic, Toronto’s economy was growing at a rapid rate, piquing the interest of global businesses and from people from all over the world. As Mayor I am committed to seeing that through and ensuring that Toronto not only rebounds, but comes back stronger than ever. Thanks to all of the work done by Team Toronto on world-leading vaccination efforts and the resiliency of so many businesses, we can move forward with confidence that Toronto’s recovery is underway,” he said.
Marcy Burchfield, Vice President of the Board’s Economic Blueprint Institute, said the Institute is a strategic unit at the Board with a mission to harness the power of data and research to understand foreward-facing issues and bring an evidence-based lens to policy making and advocacy to government.
She said the Institute has been tracking economic recovery using a suite of economic indicators for a broader region.
“COVID had a different impact in each one of those regions. In the downtown, particularly the financial district, where 85 per cent of the workforce were able to easily work from home, the impact of those daytime workers not being there had a huge impact on the 1,700 businesses that are actually located downtown,” said Burchfield.
The latest data found:
- While employment levels across the Corridor are now close to 100,000 higher than in February 2020, they are still 139,000 below the pre-pandemic growth trend. Similarly, the Corridor-wide unemployment rate is 1.4 percentage points higher than in February 2020 and the employment rate is 0.3 percentage points lower;
- Employment in the Innovation Corridor has grown faster than the Canadian average since the pandemic began two years ago;
- With 2.3 per cent growth in employment, the Toronto region has outpaced Canada’s two other largest metropolitan areas: Montreal (1.9 per cent) and Vancouver (1.6 per cent);
- As COVID-19 cases declined through January and February, workers started to trickle back into their respective places of work. In some districts – namely the Regional Centres, Services and Mixed-Use District, and Knowledge Creation District – worker levels in February were the highest they have been since 2019; and
- The Omicron induced decline in spending seen in December 2021 and January 2022 appears to have bottomed out as in-person spending started to recover leading into the beginning of February.
Burchfield said the recent release of the Recovery Tracker demonstrates the resiliency of the region and its businesses when they’re not subject to restrictions and temporary measures that stall recovery,”
“With the return of many office workers to our downtown core and the City of Toronto’s decision to resume major in-person events, we’re confident businesses can emerge from the pandemic with a thriving regional economy, resume major in-person events, we’re confident businesses can emerge from the pandemic with a thriving regional economy,” she said. “Since June we were on this nice kind of trajectory of recovery and once Omicron kind of took hold in November it just dropped. Workers stopped coming to the downtown area, stopped coming to the financial district. And so consumer spending also dropped.
“In this latest tranche of data that we have for February when restrictions started to loosen, there wasn’t a work from home order from the government, you really saw that when businesses are allowed to open and stay open that we rebound very quickly. That’s why we’re tracking these kinds of indicators. As a Board of Trade, we want the government to understand that there are repercussions for businesses. While they’re needed at certain times, there are repercussions for businesses.
“What we’ve seen is once businesses are allowed to open and stay open, the rebound is quite quick. We’re hoping that we can really move from talking about recovery to talking about getting back to growth by the summer really when people are feeling more comfortable. We’ve got a really high vaccination rate in this region, one of the highest in the world. So I think people are feeling more and more comfortable about mingling. While we will continue to track economic indicators, we really think it will be less around economic recovery and really getting back to growth.
“Through this whole pandemic, retail has really led the way in terms of economic recovery when it comes to consumer spending. Secondary has been those personal services, drycleaning, hair dressing, nails and all that. And what’s always been last is that travel and entertainment category of consumer spending.”
She said a key is bringing back that visitor economy in the area of travel and entertainment and making sure governments have policies in place to allow that economy to thrive.