Vaughan Economic and Business Update – November 2024

Highlights

  • Canada’s Consumer Price Index rose 1.6 per cent year-over-year in September following a 2.0 per cent increase in August.
  • The national unemployment rate was unchanged at 6.5 per cent in September, while the employment rate decreased to 60.6 per cent.
  • National Real Gross Domestic Product (GDP) was essentially unchanged in August, following a 0.1 per cent increase in July.
  • The Vaughan Business and Entrepreneurship Centre experienced demand for consultations in professional, scientific and technical services, retail trade, and arts, entertainment and recreation industries in October.
  • The recently launched 2024 Citizen and Business Survey aim to capture feedback from Vaughan residents and businesses to identify local business trends and improve service delivery, quality of life, value for tax dollars, among other important topics.
  • Hanon Systems, a South-Korean automotive parts manufacturer with facilities in Vaughan, announced construction of a Woodbridge plant to strengthen electronic vehicles (EV) supply chain.
  • Cardinal Health, Microsoft and Yum! Brands, companies with significant economic investments in Vaughan, made 3BL’s 100 Best Corporate Citizens in 2024.
  • Vaughan-headquartered Hammond Paper Company acquires Rainbow Excelsior Ltd, continuing sustainable development with expanded eco-friendly product line.

Select Economic Indicators

The Consumer Price Index rose 1.6 per cent year-over-year in September following a 2.0 per cent increase in August.

The national Consumer Price Index (CPI) rose 1.6 per cent year-over-year in September compared to the previous year, following a 2.0 per cent rise in August. This marked the lowest annual price increase since February 2021, with prices for gasoline as the main contributor. In Ontario, the CPI rose 1.9 per cent year-over-year in September, down from a 2.1 per cent increase in August. Canadians continue to feel the impact of higher price levels for day-to-day basics such as rent and food, which increased during that same 3-year period.

Shelter prices rose at a slower rate in September (+8.2 per cent) than in August (+8.9 per cent). Rent price growth slowed the most in Newfoundland and Labrador (+5.1 per cent), New Brunswick (+10.1 per cent), and British Columbia (+7.3 per cent).

Prices for food purchased from stores rose 2.4 per cent in September, making it the second consecutive month that grocery prices increased at a faster pace than headline inflation. Fresh or frozen beef, edible fats and oils, and eggs saw sustained elevation and increase in prices. Additionally, prices for food purchased from restaurants rose at a slightly faster pace in September compared with August.

Gasoline prices fell at a faster pace in September (-10.7 per cent) when compared to August (-5.1 per cent). Price deceleration was due part to increasing concerns over weaker economic growth impacting crude oil prices and lower costs with switching to winter blends.

The national unemployment rate was unchanged at 6.5 per cent in September, while the employment rate decreased to 60.6 per cent.

The national unemployment rate was unchanged at 6.5 per cent in October, while the employment rate decreased to 60.6 per cent, down from 60.7 per cent in September. Ontario’s unemployment rate decreased 0.1 per cent in September to 6.8 per cent, while unemployment in the Toronto Census Metropolitan Area (CMA) – which includes Vaughan – fell to 7.5 per cent.

October held steady with minimal change in employment (+15,000, +0.1 per cent), following an increase in September (+47,000, +0.2 per cent). On a year-over-year basis, employment was up by 303,000, a 1.5 per cent increase. The employment rate in October decreased by 0.1 per cent to 60.6 percent, marking the sixth consecutive monthly decline in the national employment rate.

Employment increased in business, building and other support services (+29,000, +4.2 per cent) in October. Over the same period, employment decreases were noted for finance, insurance, real estate, rental and leasing (-13,000, -0.9 per cent) as well as public administration (-8,700, -0.7 per cent).

Recent data demonstrates that employment increased among youth aged 15 to 24 (+33,000, +1.2 per cent), driven by a rise in employment among male youth (+25,000, +1.8 per cent). The youth employment rate rose 0.4 percentage points to 54.4 per cent in October, the first increase for this group since April 2024. Despite the employment increase in October, this age group overall saw a 2.7 percentage point decrease on a year-over-year basis.

The labour force participation rate continues to fall, seeing its fourth monthly decline since May. The labour force participation rate is the proportion of the population aged 15 or older that are employed or looking for work. This can be attributed to a trend of cooling labour market conditions, in addition to long-term downward pressures of population aging on the labour supply.

In October, nearly three in 10 (28.8 per cent) of Canadians aged 15 and older were living in a household that had found it difficult or very difficult in the previous month to meet its financial needs, as defined by transportation, housing, food, clothing, or other necessary expenses. This number jumped to nearly four in 10 (39.2 per cent) for people living in a rented dwelling, as opposed to those living in a dwelling owned by a member of the household.

Average hourly wages among employees increased 4.9 per cent (up $1.68 to $35.76) year-over-year in October, following a growth of 4.6 per cent in September (not seasonally adjusted).

National Real Gross Domestic Product (GDP) was essentially unchanged in August, following a 0.1 per cent increase in July.

The national Real Gross Domestic Product (GDP) was essentially unchanged in August, following a 0.1 per cent increase in July.

The services-producing industries saw a 0.1 per cent increase in August, driven in large part by increases in the finance and insurance and the public administration sectors. Goods-producing industries reached its lowest level (-0.4 per cent) since December 2021, with the manufacturing and utilities sectors as the primary drivers of this decline.

In August, the manufacturing sector posted a 1.2 per cent decrease, with durable goods and non-durable goods manufacturing contributing to the decline. Durable goods manufacturing continued a downward trend since summer 2024 and decreased 1.0 per cent in August 2024, its lowest level of activity since September 2021.

A few subsectors contributed to this decline:

  • Transportation equipment manufacturing has been trending down (-0.9 per cent) since July 2023. Retooling and maintenance activities occurring at multiple auto plants were a large contributor to the downward trend.
  • Motor vehicle and parts manufacturing saw contractions (-1.9 per cent) as the auto industry experienced extended maintenance shutdowns in Ontario.
  • Machinery manufacturing (-2.9 per cent) and furniture and related products (-7.3 per cent) were the largest drivers of the decline observed in the durable goods manufacturing aggregate.

Non-durable goods manufacturing decreased 1.4 per cent in August, representing its largest decline since March 2024. The largest contributor was chemical manufacturing (-5.0 per cent). Pharmaceutical and medicine, in particular, led the decrease (-10.3 per cent), partially offsetting the increases recorded in the previous two months.

The utilities sector saw a decline (-1.9 per cent) in August after three consecutive months of growth. Electric power generation, transmission and distribution (-2.6 per cent) posted its first decline in four months, with declines in generation observed across most provinces and territories over the course of the month. An increase in natural gas distribution (+1.4 per cent) tempered the decline in the overall sector.

Transportation and warehousing contracted for the second consecutive month, falling 0.3 per cent in August. Rail transportation (-7.7 per cent) was the largest contributor to the decline, as work stoppages at Canada’s two main rail carriers and a bridge collapse in Fort Frances, Ontario led to decreases in intermodal and non-intermodal carloadings. The phased shutdown enacted by the two carriers ahead of the lockout impacted movement of goods including meat, medicine, chlorine and other hazardous chemical products, coal and forestry products.

Advance information indicates that real GDP increased by 0.3 per cent in September.  Increases in finance and insurance, construction, and retail trade were partially offset by decreases in mining, quarrying, and oil and gas extraction.


LOCAL TRENDS, INVESTMENTS, AND SUCCESS STORIES

The Vaughan Business and Entrepreneurship Centre experienced demand for consultations in professional, scientific and technical services, retail trade, and arts, entertainment and recreation industries in October.

Economic Developments Small Business and Entrepreneurship top five industries seeking consultations in October were:

  1. Professional, scientific and technical services (21 per cent)
  2. Retail trade (15 per cent)
  3. Arts, entertainment and recreation (12 per cent)
  4. Information and cultural industries (9 per cent)
  5. Accommodation, food services and other services (9 per cent)
The recently launched 2024 Citizen and Business Survey aims to capture feedback from Vaughan residents and businesses to identify local business trends and improve service delivery, quality of life, value for tax dollars, among other important topics.

The 2024 Citizen Survey and Business Survey launched this October. Vaughan residents will have an opportunity to share their thoughts on service delivery, quality of life, value for tax dollars, public information and engagement, among other important topics. The Citizen Survey, last completed in 2022, helps ensure the City continues to offer a range of programs and services to meet the needs of the growing community.

The corresponding Business Survey will gather insights into the private sector’s operating outlooks, industry needs, readiness for change and service requirements from the City. The Business Survey, last completed in 2022, is a tool used by the City of Vaughan’s Economic Development Department to identify factors that influence business operations and growth, gauge local business trends, and determine business readiness for change and resiliency.

Hanon Systems, a South-Korean automotive parts manufacturer with facilities in Vaughan, announced construction of a Woodbridge plant to strengthen electronic vehicles (EV) supply chain.

Hanon Systems – a leading global automotive parts supplier – recently announced the construction of a new 284,200 square foot facility in Woodbridge. With an existing manufacturing facility in Concord, this will be Hanon Systems’ second facility in Vaughan. The Woodbridge plant will manufacture e-compressors, an essential component to electric vehicles (EV). This facility will be the first high displacement e-compressor plant in North America, strengthening Vaughan as a key part of Ontario’s growing end-to-end EV supply chain. The Woodbridge plant will become a centre for delivering to the growing demand in Canada and United States for EV components and intended to create 300 jobs in Vaughan.

The City is home to many globally recognized tier-one suppliers, including Magna International, Martinrea, Multimatic, Hanon Systems, Litens Automotive, International Automotive Components (IAC) Group and Woodbridge Foam Corporation, as well as numerous tier-two and tier-three suppliers. Vaughan is playing a pivotal role in the future of the automotive industry, with several automotive manufacturers in the City supporting Project Arrow, Canada’s first original, full-build, zero-emissions concept vehicle. The City’s emerging business-to-consumer EV cluster, located at Weston Road and Highway 7 and anchored by Tesla Motors, Rivian Automotive and Lucid Motors, presents significant economic growth opportunities.

Cardinal Health, Microsoft and Yum! Brands, companies with significant economic investments in Vaughan, made 3BL’s 100 Best Corporate Citizens in 2024.

Several US-based companies with significant economic investments in Vaughan made 3BL’s 100 Best Corporate Citizens in 2024, including Cardinal Health, Microsoft, and Yum! Brands. The 100 Best Corporate Citizens, organized by 3BL, recognizes corporate ESG leadership and ranks the largest US companies on sustainability performance and transparency.

Cardinal Health, the largest global distributor of healthcare equipment and supplies, boasts their Canadian headquarters in Vaughan and a newly opened advanced medical supply distribution centre this year. Yum! Brands’ existing corporate office in Vaughan and Microsoft’s emerging presence signify confidence in the City as a prime location for a diverse, growing economy.

Since 2013, Vaughan has issued more than 45,000 building permits representing more than $16 billion in permit construction value. In 2023, the city was ranked top ten nationally by value of permits across all building types. With a total industrial inventory of nearly 100 million square feet at the end of the fourth quarter of 2023, Vaughan remains the largest industrial market in York Region. Combined with a growing healthcare, healthtech and life sciences cluster in the Vaughan Healthcare Centre Precinct, Vaughan is an attractive investment to locate or expand.

Vaughan-headquartered Hammond Paper Company acquires Rainbow Excelsior Ltd, continuing sustainable development with expanded eco-friendly product line.

Hammond Paper – which has a production facility in Vaughan – is a leader in full-service paperboard distribution and conversion across North America. The company recently announced the acquisition of Rainbow Excelsior Ltd. Rainbow Excelsior Ltd is a major producer and supplier of eco-friendly packaging used to provide cushioning and protection to a range of consumer and industrial goods. Rainbow Excelsior Ltd will continue its operations in Hammond Paper’s 50,000 square foot facility in Vaughan. The acquisition signifies continued sustainable development efforts by Hammond Paper, a supporter of Forest Ontario and FSC-certified for a majority of its products.

Manufacturing is the largest sector in Vaughan, contributing nearly $4 billion, or 15 per cent, to Vaughan’s total GDP. With more than 1,500 companies employing over 49,000 people, Vaughan is home to a higher concentration of manufacturing companies than the national average.