Economic and Investment Update – August 2023
- The Consumer Price Index rose 2.8 per cent year over year in June following a 3.4 per cent increase in May.
- The national unemployment rate rose 0.1 per cent in July to to 5.5 per cent, marking the third consecutive increase.
- Real Gross Domestic Product (GDP) increased 0.3 per cent in May following a 0.1 per cent increase in April.
- The Vaughan Business and Entrepreneurship Centre experienced demand for consultations in Professional, Scientific & Technical Services, Retail Trade, and Accommodation and Food Services in July.
- Canada welcomed more than 32,000 tech workers between April 2022 and March 2023
- Former Activate!Vaughan participant B12Give has diverted 15,000kg of food waste by connecting businesses with shelters across the Greater Toronto Area.
SELECT Economic Indicators
The Consumer Price Index rose 2.8 per cent year over year in June following a 3.4 per cent increase in May.
The Consumer Price Index (CPI) rose 2.8 per cent year-over-year in June following a 3.4 per cent year-over-year increase in May. For the second consecutive month, CPI has reported a significant year-over-year deceleration. However, grocery prices and mortgage interest costs are continuing to contribute the most to CPI’s year-over-year increase. In June, grocery prices increased 9.1 per cent compared to the same period in 2022. Meat, bakery, and dairy products were the largest contributor to increased grocery prices in June.
The national unemployment rate rose to 0.1 per cent to 5.5 per cent in July, marking the third consecutive increase.
National unemployment rose 0.1 per cent to 5.5 per centin July, which was a third consecutive increase in unemployment. Ontario’s unemployment rate dropped in July to 5.6 per cent, and unemployment in the Toronto Census Metropolitan Area (which includes Vaughan) increased to 6.5 per cent, up from 6.3 per cent in June.
Employment gains in July were concentrated in healthcare and social assistance, educational services, finance, insurance, and real estate and agriculture. Employment declines were led by the construction industry, concentrated in British Columbia, Quebec, and Ontario. Significant employment declines were noted in core-aged men aged 25 to 54 years of age (-27,000). However, employment amongst youth aged 15 to 24 increased by 13,000.
In Ontario, employment growth held steady in July following a cumulative gain of 236,000 from September 2022 to June 2023.
On a year-over-year basis, average hourly wages rose 5.0 per cent (+$1.59 to $33.24) in July, following increases of 4.2 per cent in June and 5.1 per cent in May (not seasonally adjusted).
The summer is an opportunity for many students to gain valuable work experience. In July 2023, new data collected as part of the labour force survey found that among youth aged 18 to 24 years of age who had been a post-secondary student at some point since January 2023 reported that nearly one in three (30.6 per cent) work in a field that is closely related to there postsecondary studies. The study also found that 48.1 per cent of youth who were not returning to post-secondary studies would be making specific efforts to find employment related to their field of study.
Vaughan Economic Development offers a number of programs and initiatives supporting youth talent development across the City. Summer Company, funded by the Ministry of Economic Development, Job Creation and Trade (MEDJCT), is the City’s student business training, grant, and mentorship program. The program accepted 11 of Vaughan’s future business leaders who launched their businesses across a number of industries, including professional services, retail, and recreation. Additionally, the Talent City Vaughan Youth Careers Expo was hosted on May 31, 2023,in partnership with COSTI and Next Steps Employment Centre and saw more than 160 youth participating and establishing connections with potential employers. The City of Vaughan was also able to provide 40 youth aged 15 to29 years of age employment across numerous City departments as part of the Canada summer jobs program.
Real Gross Domestic Product (GDP) increased 0.3 per cent in May following a 0.1 per cent increase in April.
Real Gross Domestic Product (GDP) increased 0.3 per cent in May, following a 0.1 per cent increase in April. Real GDP measures the inflation-adjusted value of goods and services produced in the economy and is an indicator of economic growth. Manufacturing, wholesale trade, and public administration drove the increase in GDP for May. Continued easing of supply chain issues particularly with semiconductor chip suppliers, led to increases in manufacturing and whole trade activity specifically within the automotive sector.
Vaughan’s automotive cluster is home to more than 660 businesses employing more than 13,600 workers. Notably, the City has more than 45 automotive parts manufacturing businesses which employ more than 7,200 people. The manufacturing industry, of which automotive is a key driver, contributes $4 billion (16 per cent) to Vaughan’s total GDP.
For a fourth consecutive month, offices of real estate agents and brokers and activities related to real estate increased 7.6 per cent in May. This increase was led by higher reselling activity of residential properties in the Greater Toronto Area, Montreal, Quebec, Greater Vancouver, Calgary and Alberta.
Advance information indicates that real GDP decreased 0.2 per cent in June. The decrease was driven by the wholesale trade and manufacturing sectors, whose downward movements more than offset the increases recorded in May.
LOCAL TRENDS, INVESTMENTS, AND SUCCESS STORIES
The Vaughan Business and Entrepreneurship Centre experienced demand for consultations in Professional, Scientific & Technical Services, Retail Trade, and Accommodation and Food Services in July.
ED’s Small Business and Entrepreneurship top five industries seeking consultations in July were:
- Professional Scientific and Technical Services (17 per cent)
- Retail Trade (15 percent)
- Accommodation and Food Services (13 per cent)
- Other Services (13 per cent)
- Education Services (11 per cent)
Canada welcomed more than 32,000 tech workers between April 2022 and March 2023.
The Technology Council of North America (TECNA) and Canada Tech Network (CTN) recently released a report titled “Tech Workforce Trends: The Migration of Tech Workers and Tech Jobs Since the pandemic” which highlighted that between April 2022 and March 2023, 32,115 new workers came to Canada with most migrating from India and Nigeria. This migration is due in part to a more immigration-friendly national policy and labour cost advantages.
Amid this massive migration, Canada also had a net loss of 1,672 tech workers to the United States. Considering the total tech workforce of each, this demonstrates Canada’s competitiveness for tech talent, despite large disparities in earning power relative to the U.S. The average compensation for U.S. tech occupations per the report is $175,600 CAD ($133,500 USD), with a salary range of from $72,600 to $313,000, while the average compensation for the same tech occupations in Canada is $100,400 CAD ($73,897 USD), ranging from $72,600 to $313,000.
The Ministry of Immigration’s new tech talent strategy promises to bring 10,000 new highly-skilled tech workers to Canada with H1B visas. Through this new strategy, the federal government also plans to promote Canada as a destination for digital nomads.
Vaughan is located in the second-largest tech hub in the country. York Region’s tech community, which boasts more than 4,600 ICT companies, is a complete eco-system where tech multinationals operate alongside leading Canadian industry leaders focused on all areas of innovation including enterprise software, IT services, cloud computing, hardware, microelectronics, and more.
Former Activate!Vaughan participant B12Give has diverted 15,000kg of food waste by connecting businesses with shelters across the Greater Toronto Area.
B12Give (Be One To Give), a purpose-driven social enterprise and former participant and grant recipient under Activate!Vaughan was recognized for its accomplishments to date, notably cutting enough waste since its inception to feed 25,000 people. Founded in 2019 to fight hunger in the Greater Toronto Area, B12Give has diverted 15,000 kilograms of food waste. The company operates like an UberEats-style delivery platform dedicated to combating food waste, with restaurants and businesses notifying B12Give of available food surplus that can be diverted to local shelters and charities.
Activate!Vaughan is an innovation program that connects high-potential start-ups and scale-ups to market-driven entrepreneurship opportunities and mentorship from industry leaders and multinationals. Vaughan Economic Development continues to support purpose-driven initiatives for businesses within the City through programs like Better Your Business: Tap into Social and Environmental Sustainability Program, which is currently accepting applications until October 25, 2023. The Better Your Business Program is a new initiative that supports cohorts of five Vaughan-based businesses in incorporating the United Nation’s 17 Sustainable Development Goals into their corporate practices.