Some Ottawa sectors see positive economic recovery, others won’t see improvement for a while

Things are looking up for Ottawa’s economy, despite the Omicron variant and recent sixth wave.

That’s what Stephen Willis, general manager of planning, real estate and economic development, said in a memo sent out to city councillors on Wednesday, May 4.

Willis says the city’s economy shows positive signs of recovery across most sectors, referencing a March 2022 Conference Board of Canada report.

According to the report, titled 'Major City Insights Report', the board said that Ottawa-Gatineau’s economy surpassed its pre-pandemic peak in 2021, expanding by 5.2 per cent.

The region’s gross domestic product (GDP) is also expected to expand by a further 3.4 per cent this year before growth moderated to 1.4 per cent in 2023.

“Ottawa’s high concentration of public service employment is a key reason the economy has performed relatively well throughout the pandemic,” Willis said. “The region’s public sector accounts for nearly one-third of real GDP and most jobs in this sector have shifted seamlessly to remote work, largely unaffected by provincial restrictions over the past two years.”

Adding, “as well, unlike other areas in the province, Ottawa has a small manufacturing sector, leaving it less impacted by supply chain disruptions and associated economic implications.”

Ottawa’s second largest economic driver, the technology sector, has shown “significant strength and resiliency” throughout the pandemic, Willis explains, which has significantly contributed to economic recovery.

“The sector continues to excel based on the high concentration of technology jobs as a percentage of overall employment, which is seen as a key indicator of the relative strength of a city’s technology market and its growth potential,” the memo continued.

Another big driver for Ottawa is its construction sector.

The Conference Board of Canada’s report states that the sector expanded by 11.3 per cent in 2021 and is projected to grow by an additional 3.1 per cent in 2022, with another 0.6 per cent output gain anticipated in 2023.

“Through the strength of the sectors noted above has supported Ottawa’s path to economic recovery,” Willis said. “It has not diminished the crushing and disproportionate impacts of the pandemic on the hardest-hi segments of Ottawa’s economy, including tourism and hospitality, festivals and events, live entertainment, and the small business sector (retail, restaurant, service).”

However, though Ottawa’s high vaccination rates combined with the lifting of most public health restrictions and capacity limits will help to lessen the impacts on these sectors over the coming months, Willis said the time frame for recovery will continue to be “prolonged and uneven.”

Aside from sectors, there have also been variations across demographic groups, Willis points out. 

Specifically, he explains, COVID-19 has had a disproportionate impact on women, immigrants and racialized populations, who are over-represented in essential front-ling jobs in the small business and hospitality sectors, where job disruptions and losses have been higher than other sectors. 

“This has further exacerbated existing socio-economic inequities.”

This means, he adds, that Ottawa's economic recovery will continue to be “K” shaped for the foreseeable future. 

“This type of recovery divides the economy in two, where some industries and individuals recover from economic impacts quickly, whil others lag over an extended period.”