Ontario's economy expanded in the second quarter, but evidently not at a rate meriting a feel-good press release from the province's Liberal government, as they did earlier this year.

That's probably because an earthquake in Japan helped weaken export numbers and slow down Ontario's economic growth in Q2 of this year, according to statistics that were quietly published by the Ministry of Finance last week.

Ontario's economic accounts for the months of April, May and June show the province's real gross domestic product increased 0.2 per cent in the second quarter of 2016, which Finance Minister Charles Sousa characterized as "slow growth."

The 0.7-per-cent annualized rate of economic expansion in Q2 (the ministry's figure) follows two consecutive quarters of 0.8 per cent economic growth, as well as a Throne Speech from the Liberal government that promised electricity cost relief and 100,000 new child-care spaces. The price of those perks is to be footed, at least in part, with extra tax dollars raked in by a booming economy.

Asked about the accounts Wednesday, Sousa said the weaker growth was nothing unexpected and that Ontario’s economy remained among Canada’s stronger ones. “We have taken into consideration what the growth rate would be as we budgeted forecasts going into the coming year. We recognize quarter-to-quarter changes did occur and we still took that into account in our forecasts.”

Sousa also shrugged off suggestions the slower growth would knock the province off its path back to a balanced budget, or kibosh spending promises the Liberal government has recently made, such as an eight-per-cent rebate on electricity bills. The legislation containing that rebate passed third reading Wednesday morning.

“It is slow growth. Make no mistake of that,” said Sousa. “It’s not double-digit growth like we’ve had in the past after a recovery. But it is growing and we’re taking steps necessary to balance the books as a result.”

Sousa told reporters that jobs are still being created, the unemployment rate is falling, and that “economic activity is occurring in Ontario more quickly than other parts of the country.” In its 2016 budget, the government forecast a $4.3-billion deficit in 2016-17, and then balanced budgets in the two fiscal years that follow.

BMO Capital Markets recently predicted Ontario’s real GDP would grow 2.6 per cent this year, and 2.3 per cent in 2017. Only British Columbia is expected to fare better among the provinces this year, the bank says.

Ontario's unemployment rate also fell to 6.6 per cent in September, from 6.7 per cent in August, Statistics Canada revealed earlier this month. Canada's unemployment rate was 7 per cent.

The Liberal government had celebrated its first quarter economic accounts with a press release that boasted the province was "a Growth Leader" for the first three months of 2016 and that the government's economic plan was "Delivering on Top Priority of Creating Jobs and Growth." The Premier also toasted the economic growth at an hosted by a Toronto tech company.

No such press release or visit was done for the second quarter economic accounts.

The economic accounts note the service sector pulled its weight in Q2 of 2016, by increasing output by 0.6 per cent. The goods sector, however, contracted by 1.3 per cent.

"A decline in exports dampened overall economic growth for the quarter," said the economic accounts, which were released without any notification on Friday. Exports slipped by 3.3 per cent in Q2, after 6.2-per-cent growth in the preceding year.

The biggest blow was dealt by the manufacturing industry, whose output fell 1.6 per cent in the second quarter, after rising 4.3 per cent in the three previous quarters, the finance ministry says. Auto sector production decreased by 2.3 per cent.

"This decline was related, in part, to supply chain disruptions caused by an earthquake in Japan in April," the accounts said.

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Finance Minister laments ‘slow growth,’ but says province still on track to balance budget

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