Ottawa's economy 5 years after the market crash

The biggest source of paycheques in the capital region the federal government shed a record 12,000 jobs last year.

And yet, people who watch the local economy say Ottawa has not done all that badly since the global financial crisis of 2008.

"I think we're still better off," said Alan Arcand, principal economist at the Conference Board of Canada.

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For years now, Arcand's been putting together economic outlooks for Canadian cities. The latest one was just released and it shows a quick drop-off in federal jobs in the last couple of years, as the government tries to balance its books.

That means the capital's economy is growing much more slowly than other cities, Arcand said. At 0.3 per centGDP growth, Ottawa-Gatineau ranked 26th out of 28 Canadian cities last year.

But Arcand points out while the economy has slowed, it is still growing.

And as far as federal job cuts go, the Conference Board's latest metropolitan outlook report says the worst appears to be over.

Federal job cuts

"I don't think we were hit as hard by the public sector cuts as they thought we'd be," agreed Ingrid Argyle, director of Labour Market Ottawa, an organization that studies statistics and talks with local players to plan the Ottawa job market's needs.

In fact, statistics provided by the Conference Board show 131,500 people were working for the federal government in Ottawa-Gatineau in 2013, which is higher even than the 116,700 people in federal jobs in 2007.

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Many people who left the public service over the last few years took early retirement, Argyle pointed out, rather than being forced into the job market.

One area of the local economy that suffered in recent years was high-tech manufacturing. Companies that created goods, as Nortel once did, employed 20,000 people in 2007.

By 2013, just over 5,000 people remained. Much of that work has moved off-shore, according to the Conference Board.

Overall, more people are working here than five years ago, but the extra jobs haven't quite kept pace with the growth in the total number of people in the labour market.

Sothe unemployment rate in Ottawa-Gatineau was higher in 2013, at 6.3 per cent, than in 2008, when it was 4.8 per cent.

Still, the capital's employment numbers are better than those in the rest of Ontarioor even Toronto, said Argyle.

"We were never a manufacturing-heavy city," Argyle noted. "And it was really the manufacturing-heavy citiesthat were hit hardest in the past few years."

Construction, engineering and IT sectors growing

In the meantime, other sectors are picking up steam.

Arcand and Argyle both point to a surge in non-residential construction projects: expansions at shopping malls, the redevelopment of Lansdowne Park, and the first phase of the new light-rail line.

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Those projects are worth more than $3.5 billioncombinedin the next few years.

A number of IT services companies, which do engineering and R&D, are also adding people to their payrolls.

Investors are again putting venture capital into Canadian companies at levels not seen since 2007, according to a recent report by Canada's Venture Capital & Private Equity Association.

Ottawa's Shopify is a bright light in that area. It announced an influx of $100 million in venture capital to help it expand its software to retailers, and hire 200 people.

And there's another shift in opportunity, not captured by jobs data based on distinct sectors, said Argyle.

"Things don't fit nicely into little niches as they used to," said Argyle.

More people are doing work in areas that cross over, she said, such as medical innovations that require both high-tech and health expertise, or green construction that blends science and construction skills.

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