Montreal's output per person stays near 80% of Toronto's, Institut du Québec study finds

MONTREAL — A new economic report says Montreal continues to lag behind Toronto in economic output per person, despite significant gains by Quebec's other regions relative to their counterparts in Ontario in recent years.

The study, released Tuesday, Nov. 10, by the Institut du Québec, found that real gross domestic product (GDP) per capita in Montreal stayed at about 80 per cent of the level recorded in Toronto between 2011 and 2022.

The researchers warned that the gap could widen in the future if Montreal fails to attract skilled workers and keep qualified young people, particularly as immigration policies tighten.

A 20 per cent economic gap between the two cities

The study said Montreal was unable to narrow the difference with Toronto, despite notable economic growth over the period analyzed.

The Toronto-area economy grew by 33 per cent between 2011 and 2022, compared with 27 per cent for Montreal.

After accounting for population growth, however, the difference becomes relatively small: real GDP per capita rose 17 per cent in Toronto and 16 per cent in Montreal.

This means Montreal did not necessarily perform poorly, but did not make enough progress to close the historical gap.

Economist Jean-Baptiste Valentin Dolac said the strength of Toronto's financial and insurance sectors helps explain its economic edge.

Quebec's other regions make economic gains

Unlike Montreal, Quebec's other regions made major progress compared with Ontario regions outside Toronto.

In 2011, GDP per capita in these regions was about 91 per cent of the Ontario equivalent.

By 2022, that share had risen to 99 per cent, meaning the gap has shrunk to a very small level.

The improvement is linked to economic growth and demographic changes: real output in Quebec's regions rose 22 per cent, compared with about 20 per cent in comparable regions of Ontario.

Relatively slower population growth also contributed to higher output per person.

Shortage of skilled labour threatens Montreal's future

The study warned that tighter immigration rules could shrink Montreal's workforce in the coming years.

Projections suggest the population aged 20 to 64 could return by 2030 to a level close to that of 2011.

By contrast, the population in the same age group in Toronto is expected to remain about 20 per cent above its 2011 level.

Emna Braham, president and CEO of the Institut du Québec, said attracting talent is essential to sustaining the growth of large cities.

This matters even more given that the share of residents with university degrees is 52 per cent in Toronto, compared with 43 per cent in Montreal.

Rising rents push young people to leave the city

Montreal faces an additional challenge in rising housing costs, which reduce its ability to attract young people from other parts of Quebec.

The study found that renting a vacant two-bedroom apartment took up 21 per cent of the combined income of two people aged 25 to 34 in 2024, up from 17 per cent in 2019.

The researchers fear these pressures will lead more graduates to settle outside Montreal or choose cities that offer better job opportunities.

Is Montreal poorer in every respect?

The researchers stress that GDP per capita measures the volume of economic output, not household wealth or purchasing power directly.

The comparison also does not necessarily mean Toronto residents enjoy a better standard of living, because housing, services and taxes differ between the two cities.

Montreal retains important strengths, including aerospace, pharmaceuticals, engineering, professional services and cultural activities.

The report concludes that continued growth in Montreal requires policies that help attract skilled workers and provide suitable housing, while preserving the role of other regions in Quebec's economy.