Trade disruptions represent a second area of potential vulnerability. The Canadian, Ontarian, and GGH economies have become increasingly integrated with those of other countries, including through negotiated trade agreements, global supply chain management, and e-commerce. Although Canada has entered into new trade agreements, most recently the United States Mexico Canada (USMCA) agreement, an integrated, global economy remains vulnerable to disruptions and crises around the world. Threats include possible trade wars, industry-specific tariff increases, political instability, or disruptions to transportation due to major climate change events.
As with automation, the impacts of potential trade disruptions will be uneven on the economy and the GGH's economic landscape. Not only would trade disruptions directly affect traded goods and services, but there would also be knock-on effects in other sectors. For example, shifting trade patterns could cause realignments of the geography of supply chains, with implications for warehousing and logistics facilities. And as with automation, any potential upside has not been quantified - for example, increasing trade uncertainty may lead to the reshoring of manufacturing, as producers reduce uncertainty by locating production closer to final markets.
We drew on a 2017 analysis by Daniel Schwanen and Aaron Jacobs of the C.D. Howe Institute, The NAFTA constellation: Which Canadian industries are most vulnerable? Their analysis identified industries that would be most affected by a collapse of Canada-United States free trade. The analysis assumes that the higher the current level of trade, the greater the potential impacts.
We used the same indicator that they did to identify the industries that are most trade-dependent and therefore most vulnerable to trade disruptions: the share of an industry's jobs that rely directly on exports. In our case, we considered global exports, not just exports to the U.S., as trade disruptions could occur with any trading partners. We applied this indicator to Ontario data to identify the most vulnerable industries in the province, and then quantified and mapped employment in those industries in the GGH.
The industries identified as most vulnerable to trade disruptions, and their employment levels in the GGH are presented in Table 23. We used a cut-off of 50 percent, that is, selecting those industries in which the share of employment directly relying on exports was 50 percent or greater. We then mapped employment in these industries (Map 35).
Total employment in the most vulnerable industries in the GGH amounts to almost 200,000 jobs. Many are in manufacturing industries, especially the auto sector. Other vulnerable sectors are advanced manufacturing industries producing semi-conductors, computers and communications devices, and aerospace equipment. Disruption to trade would impact some of our most advanced, productive industries. Of service sector employment, only office administration and lessors of non-financial intangible assets (such as holders of patents, trademarks, brand names, etc.) are included.
Because vulnerability strongly affects manufacturing, the geography of employment vulnerable to trade disruptions reflects the manufacturing districts in the GGH. Auto manufacturing locations figure prominently, such as those in Guelph, Oakville, Alliston, Cambridge, and Oshawa. The three megazones are also highlighted, along with areas in Burlington and Scarborough. Other concentrated areas appear in the Meadowvale SKID and in Downsview, with its concentration of aerospace employment.
Table 23: Employment in industries with the highest share of jobs relying directly on exports, GGH, 2016
Sorted from highest to lowest vulnerability, based on share of jobs directly relying on exports
Semiconductor and other electronic component manufacturing
Computer and peripheral equipment manufacturing
Communications equipment manufacturing
Motor vehicle manufacturing
Aerospace product and parts manufacturing
Leather and allied product manufacturing
Rubber product manufacturing
Other general-purpose machinery manufacturing
Non-ferrous metal (except aluminum) production and processing
Audio and video equipment manufacturing
Navigational, measuring, medical, and control instruments manufacturing
Manufacturing and reproducing magnetic and optical media
Other miscellaneous manufacturing
Commercial and service industry machinery manufacturing
Industrial machinery manufacturing
Spring and wire product manufacturing
Ship and boat building
Soap, cleaning compound, and toilet preparation manufacturing
Textile product mills
Pulp, paper and paperboard mills
Alumina and aluminum production and processing
Household appliance manufacturing
Office administrative services
Resin, synthetic rubber, artificial and synthetic fibres, and filaments manufacturing
Pharmaceutical and medicine manufacturing
Motor vehicle body and trailer manufacturing
Electrical equipment manufacturing
Greenhouse, nursery, and floriculture production
Motor vehicle parts manufacturing
Lessors of non-financial intangible assets (except copyrighted works)
Engine, turbine, and power transmission equipment manufacturing
Seafood product preparation and packaging
TOTAL OF ABOVE
ALL GTA INDUSTRIES
Overall, vulnerable employment is distributed across the region. Some municipalities have higher concentrations of vulnerable industries, including Cambridge, Guelph, Milton, Oakville, Caledon, Newmarket, and Vaughan (see Table 24).
Some industries appear in both of the most-vulnerable lists, notably auto-related manufacturing and assembly. This industry also has a high level of employment in the GGH. Similarly, some municipalities are at the top of both lists, suggesting heightened vulnerability - including New Tecumseth, Cambridge, Guelph, Caledon, and Vaughan. In the following chapter we turn to land use strategies to address these vulnerabilities.
Table 24: Employment in industries most vulnerable to trade disruption as a share of total industry employment, municipalities with over 10,000 jobs, GGH, 2016
Employment in industries in which >50% of jobs rely directly on exports,
sorted from highest to lowest vulnerability
Employment in Most Vulnerable Industries
% of Total Employment
Greater Golden Horseshoe
Map 35: Employment in Industries with Highest Vulnerability to Trade Disruption, GGH, 2016
 At the time of publication (late October 2018), this agreement had not been ratified.
 Data for this indicator not available sub-provincially or for the GGH.
 In the Table, the share of jobs relying directly on exports is calculated based on Ontario data; these data are not available at the sub-provincial level. In some cases there is a single percentage number for a single or group of 3-digit industries; this is because the source data uses a different industry classification that treats these as one group and it is not possible to break out the shares at the 4-digit NAICS level. In some cases, the source data were available only at a 5-digit level equivalent, so we have aggregated to obtain a percentage value at the 4-digit level. This is the case for NAICS 3361 and 3363, but all of the 5-digit categories are captured in the 4-digit data. Employment figures are for the GGH.
 The aim of both automation and trade vulnerability analyses was to identify the most vulnerable industries and jobs. We used a cut-off of 50 percent or more for trade, resulting in almost 200,000 jobs. Using a cut-off of 60 percent or more for automation resulted in close to 700,000 jobs identified. So the vulnerability scale differs between the two factors. Had we used a 50 percent cut-off for automation, we would be including over 300,000 additional jobs, for a total of in excess of 1,00,000; a total that would not highlight the most vulnerable jobs.