A new report paints a bleak picture of Ottawa’s economic outlook CBC News

In 2024, city council adopted Ottawa’s economic development plan, a multi-year plan to build a city that is “economically diverse and prosperous.”

But two years later, a new labor report updating Ottawa’s economic situation paints a grim picture, including a rising unemployment rate, increased job losses, and the effects of government downsizing.

Although the report states that the real product of Ottawa-Gatineau is expected to increase by 1.4 per cent this year, the rate of growth is expected to be slower than in previous years.

A gradual improvement is expected in 2027, the report says.

Latest data from Statistics Canada shows Ottawa also “experienced significant job losses” in the province between January 2025 and February 2026, with 30,500 jobs lost and the unemployment rate increases to 6.3 percent.

“There are no other cities in Ontario that are really close to that kind of job loss at this point,” said David Macdonald, senior economist at the Canadian Institute for Strategic Studies.

Cuts to public service jobs are a major part of the job losses, Macdonald said.

‘It’s a very difficult time’

According to the city’s economic report, the public sector accounts for about a quarter of jobs in Ottawa. The shortages are expected to affect sectors such as retail and real estate.

Macdonald explained: “There’s a negative impact on this cold weather that’s happening and it’s probably affecting the local economy and local jobs. “People are worried that they could be cut,​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​ [they’re] they just don’t spend their money.”

Ottawa Mayor Mark Sutcliffe addressed the concerns at an unrelated news conference on Friday, acknowledging that “it’s a tough time for the Ottawa economy.”

“We are facing a lot of pressure from events around the world, from trade wars and tariffs that we have with our closest neighbor. [to] the threat of public sector job cuts in the federal public service. It’s a very difficult time.”

City investing in private sector, tourism

Ottawa is also losing jobs in sectors affected by tourism, including accommodation and food services and culture and entertainment, Macdonald said.

Sutcliffe told reporters that the city is working with Ottawa Tourism and is looking to create more jobs in the private sector to help small businesses and grow the local economy.

“That’s been very successful lately,” he said of the city’s work with Ottawa Tourism.

In a statement to the CBC, Ottawa Tourism noted that 2025 was a strong year for the industry and that it expects more of the same in 2026.

This was due to the relaunch of the Canada Strong Pass for the summer, the return of the Ironman competition and Ottawa’s 200th anniversary celebrations, the agency said.

WATCH | What the city has planned for the bicentennial:

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Ottawa, formerly Bytown, turns 200 in 2026. The city’s history and culture will be celebrated with events planned throughout the year.

“Tourism is an important part of Ottawa’s overall economy, so we are encouraged to think that while other sectors may be struggling, tourism can help support our community and bring economic benefits and quality of life to the city,” the statement read.

The city’s report also highlights technology, defense and security, tourism, construction and manufacturing as sectors that can lead to economic growth.

The construction sector could use that boost, it said Juliette Nicolaÿ, policy analyst and the Canadian Association of Independent Business, adding that the organization is pushing for more support for small businesses in general.

“Currently we are seeing a drought of entrepreneurs. So there has been an exit of more businesses than there are going into the business,” he said.

“We are calling on governments at all levels, municipal, provincial and federal, to address this issue.”