Ottawa's Economy is not Diverse
Economic diversity relates to the number of sectors that contribute to the economy, and the amount of activity in each sector. Greater diversity is generally linked to resilience in the face of economic change.
With the diversity of Canada's economy as a reference point set at 1, Ottawa's economy has a diversity level of 0.37. This is by far the lowest among Canada's six largest cities -- less than half that of Calgary's, the next lowest ranking of the six cities.
Ottawa's low economic diversity reflects a concentration of jobs in the public service sector, driven by the role the federal government plays in the city's economy. Counterbalancing the concern about low diversity is the fact that federal government employment and spending provides a buffer against economic downturns.
The diversity of each of the cities in this graphic was calculated by the Conference Board of Canada using the Hachman Index. This index assumes Canada has a diversity of 1 and then compares the diversity of the other cities to Canada.
- The Conference Board of Canada. Economic Insights into 13 Canadian Metropolitan Economies. Metropolitan Outlook 1, Winter 2016.
- City of Ottawa 2015. 2014 Annual Development Report. Accessed April 11, 2016.
- Local IDEAs - The Changing Economic Structure of Canadian Cities, Tara Vinodrai, University of Waterloo, 2012. Ottawa industrial structure report. Accessed April 11, 2016.
Ottawa has a comparatively high Median Household Income
Based on 2013 data, Ottawa's median household income was the second highest among nine of Canada's largest cities. This reflects the presence of the federal government as a major employer, and relatively high levels of educational attainment. Moreover, the median income of the top-ranking city, Calgary, was only marginally higher.
In that same year, Ottawa had the fourth highest cost of living among the nine cities. Toronto had the highest cost of living, followed by Calgary and Vancouver. The disparity between cost of living and median income in Toronto is particularly acute, as it had the lowest median household income - $28,000 a year lower than Ottawa's.
Households in this scenario refer to Census Families and Individuals. Families are comprised of:
1) couples (married or common-law, including same-sex couples) living in the same dwelling with or without children, and
2) single parents (male or female) living with one or more children.
Persons who are not matched to a family become persons not in census families. They may be living alone, with a family to whom they are related, with a family to whom they are unrelated or with other persons not in census families. Beginning in 2001, same-sex couples reporting as couples are counted as couple families.
- Expastistan Cost of Living Index, Cost of Living in Canada. Accessed April 11, 2016.
- Statistics Canada. CANSIM Table 111-0009.
Ottawa has relatively low income inequality
High income inequality correlates with a number of negative health outcomes, and also negative social outcomes such as higher crime rates.
The Gini coefficient is an internationally recognized approach to measuring income inequality. Based on this measure, in 2005 Ottawa had the second lowest inequality rating among major Canadian cities, after Quebec City. These two cities also registered the smallest change in the coefficient over the 25 year time span from 1980 to 2005.
Income inequality in Canada as a whole has been rising, reflecting a global trend of concentration of income among the super-rich. Based on data from the late 2000s, Canada ranked 12th out of 17 peer countries on income inequality.
- Chen, Wen-Hao, John Myles, and Garnet Picot. 2012. “Why Have Poorer Neighbourhoods Stagnated Economically While the Richer Have Flourished? Neighbourhood Income Inequality in Canadian Cities.” Urban Studies 49 (4): 877–896.
- The Conference Board of Canada 2016. Income inequality. Accessed April 11, 2016.