Ottawa is the capital of Canada and makes major contributions to the economy of the country. The thriving economic sector offers a lot of job opportunities in many industries, like technology and tourism. This is the reason why Ottawa has an extremely low unemployment rate (7.2%). The median family income in Ottawa-Gatineau is $73,745, which is considerably higher than the national median ($61,348).
Ottawa has the 3rd highest quality of living among Canadian cities and is ranked 19th in the world. Likewise, it is the 3rd cleanest city (2nd cleanest in Canada) on this planet. All these factors make the Canadian capital a massive attraction for local as well as the international workforce.
Key Industries in Ottawa
Some of the major industries that have a significant impact on the economy of Ottawa are discussed below.
Ottawa is the center of technological innovation in Canada and has the 2nd highest concentration of tech talent in North America. There are more than 1,750 knowledge-based companies in the region that employ 68,500+ employees. The widespread of technological companies in the city earned it the title of “Silicon Valley North”. Most of these companies are involved in Software Development, Telecommunications, Cleantech, and Engineering.
There are more than 560 companies(22,000 employees) in Ottawa that are involved in this field. The presence of Microsoft, Dell, IBM, Oracle, and SAP makes this city an ideal place to support businesses of all sizes. This is the reason why many large organizations, like Shopify, have emerged from this city.
Shopify is a popular commerce platform that is spread in 175 countries around the world. It generated total revenue of about $1.578 billion in 2019 and hopes to make $2.16 billion this year. In addition to that, many pioneer companies, like Amazon and BlackBerry QNX, are also operating from the Canadian capital.
Ottawa is internationally recognized for being a center of excellence in communications technology. A widespread network of more than 250 companies is continuously improving the wireless industry around the world. All the top 5 market vendors for mobile backhaul equipment (Cisco, Nokia, Huawei, Ericsson, and ZTE) come from Ottawa. Likewise, the top 10 vendors for optical network hardware are also based in Ottawa.
Combine all this with 21,000 highly skilled people and you get an industry with multiple multinational firms. Numerous R&D facilities are adding even more value to this entire system. Some of the most renowned among them are:
- Canadian Photonics Fabrication Centre (CPFC)
- Communications Research Centre Canada
- Centre of Excellence in Next Generation Networks (CENGN)
Canada is ranked 4th on the Global Cleantech Innovation Index. Although it is one of the evolving industries, Cleantech is among the primary contributors to the economy of Ottawa. According to an estimate, cleantech accounts for $13.3 billion annual revenue. Interestingly, 57% of it comes from international clients. Owing to its huge economic potential, the authorities are trying their best to support this field.
Several Fortune 500 companies are anchoring this industry, such as Enbridge and Waste Management. Many world-class innovators, like Energate, Thermalfrost, and Windmill Developments, are also involved in this process. On top of that, a large concentration of research agencies and laboratories are also there for proper R&D.
Being the capital of the country, Ottawa homes a lot of federal government departments. This makes the city an ideal destination for setting up the national hub for aerospace, defense, and security. The availability of world-class multinationals and high-quality tech talent ensures the right environment to excel in these fields.
More than 300 companies and SMEs are affiliated with these industries, including a few entrants from the Fortune 500. The most popular among them are General Dynamics and Lockheed Martin. In 2018, the Canadian aerospace industry contributed over $25 billion in GDP.
Many real estate experts regard Ottawa as the hottest housing market in Canada. This is because the dollar value for building permits issued is always on the positive for the Canadian capital. A building permit value is one of the best possible ways to determine the economic progress of a city.
In 2005, this value increased by a record 7.9% (and reached $1.83 billion) in Ottawa. The increase in non-residential construction was the primary reason for this massive surge. Many institutional and government construction projects, including the Canadian War Museum, were built in this phase.
Despite the COVID-19 pandemic, the real estate industry of Ottawa has NOT slowed down. The rise in home costs is much more this year than it was in 2019. According to the Ottawa Real Estate Board, 2,329 residential properties were sold in September 2020. In contrast to that, only 1,547 homes and condos were sold in September 2019.
Several realtors feel that there won’t be a drastic drop in prices, at least in near future. They believe that the demand for houses is much more than those available in the market. The fact that more and more people are shifting to Ottawa from expensive cities have also contributed to the price hike.
It is an important part of Ottawa’s economy and makes a significant contribution to the quality of life. The number of tourists visiting the Canadian capital has increased dramatically after the 150th anniversary of the country. The celebrations of this occasion were centered in Ottawa and they attracted a lot of attention from travel enthusiasts.
The Ottawa tourism scene is saturated with visitors all year long. According to an estimate, 7.3 million tourists visit the city every year and spend about $1.4 billion on food, transportation, and other expenses. These numbers escalated to 11 million visitors and $2.2 billion in 2017 (Canada 150 Celebrations).
More than 30,000 people are directly associated with tourism and make about $1 billion in salaries and direct wages. If we also include indirect and induced jobs, the total number of workers associated with this industry exceeds 43,000. Tourism-related activities also generate an annual tax of nearly $755 million that is distributed to all levels of government.
In 2019, the Conference Board of Canada claimed that the number of overnight visits to Ottawa will increase regularly in the coming years. They expected an annual increment of at least 2.3% until 2022. Therefore, it is safe to assume that tourism is extremely vital for the economy of Ottawa.
The federal government of Ottawa is the largest employer of the city, with over 110,000 employees. Being the capital of the country, the national headquarters of several federal departments are located in Ottawa. For instance, Place du Portage, CFB Rockcliffe, and the National Defence Headquarters are all hosted by the capital city.
Other than that, the health sector of Ottawa employs more than 18,000 professionals. There are 4 general hospitals: The Ottawa Hospital, Children’s Hospital of Eastern Ontario, Queensway Carleton Hospital, and Montfort Hospital. In addition to that, there are several specialized facilities (like the University of Ottawa Heart Institute) that require significant employees.
In addition to all the urban activities, the city of Ottawa also benefits from a significant rural sector. In fact, it has the largest rural economy among all the major cities of Canada. The agricultural sector of Ottawa is spread over 300,000 acres of farms. They employ nearly 10,000 people and contribute more than $1 billion to the GDP.
Out of all the rural revenue, agriculture accounts for $400 million. However, sustainable farming practices are necessary to maintain the value of Ottawa’s countryside. This is important because rural tourism is also an integral part of the economy. Some other activities that make up the rural economy are construction, retail sales, and manufacturing
The city of Ottawa is quite serious about boosting the impact of the rural economy. It is one of the pillars of the City’s Economic Development agenda and efforts are being made to maximize the potential of farms. The Rural Affairs Office has been assigned the primary responsibility of achieving this goal.
How Diverse is the Economy of Ottawa?
Economic diversity depends on the number of sectors (and the corresponding activity) that are involved in the revenue generation. Greater diversity is generally linked to resilience in the face of economic change. This is because the income is dependent on several sources and a negative impact on one sector won’t be catastrophic.
The economy of Ottawa is NOT very diverse because it depends on a handful of industries. However, most of the employees of the Canadian capital are working in the public sector. This counters the low economic diversity to a certain extent as these jobs provide a cushion against mishaps.
Ottawa is the 4th largest city of Canada by population and has a GDP in excess of $40 billion. It is one of the most advanced technology centers in North America with over 70,000 high-tech jobs. The robust economy of Ottawa relies on different industries, but advanced technology and public service are the most dominant ones. Both these jobs pay good salaries and often provide the worker with a relatively stable environment.