Tag: Ontario Economic Report

Input Costs Soar as Confidence and Projected Profits Fall: Ontario Economic Report 2018

Ontario Chamber Network reveals consequences of a climate that discourages growth

Today the Oakville Chamber of Commerce, in partnership with the Ontario Chamber of Commerce, released the second annual Ontario Economic Report (OER), a comprehensive analysis of data and emerging trends on the economic health of the province. Original economic research from the report reveals that 77 per cent of Ontario businesses say access to talent remains the largest impact on their competitiveness and nearly half report a lack of confidence in the province’s economy. Meanwhile, a lack of confidence in their own ability to sustain profits continues to decline.

The OER includes data from the Ontario Chamber of Commerce’s Business Confidence Survey conducted by Fresh Intelligence, a Business Prosperity Index developed by the Canadian Centre for Economic Analysis (CANCEA), and a 2018 Economic Outlook prepared by BMO Financial Group.

“Industry in Ontario are feeling the impact of the rising minimum wage, significant labour reforms, increasing global and US competition, NAFTA renegotiations, consistent overregulation, rising input costs, and challenges to accessing talent,” said Rocco Rossi, President and CEO at the Ontario Chamber of Commerce. “This year’s Ontario Economic Report indicates that these challenges are creating a climate of low business confidence that will compromise the province’s future prosperity.”

According to OER findings, 68 percent of firms say the minimum wage increase is predicted to have a negative impact on their business. Compared to last year, they are more likely to project a decline in revenue and a shrinking of their workforce.

Some of the 2018 OER highlights on the outlook of Ontario’s economy include:

  • Businesses are losing confidence in Ontario’s economy. In 2012, 47 percent of businesses reported they were confident in Ontario’s economic outlook. Today, that share has been halved, as only 23 percent of businesses are confident in the economy.
  • Nearly two-thirds of businesses cite input costs for their lack of confidence, such as the price of electricity, taxes, and the increase in minimum wage. This is compared to only 31 percent who name competitive barriers such as declining consumer demand or changing client behaviour.
  • One quarter of small businesses in Ontario project declining revenue in 2018, which is twice the rate of large firms (26 percent vs. 13 percent). Given that the majority of businesses in this province are small, this will likely have a net-negative impact on economic growth.
  • The production of goods and services represents a shrinking contributor to business prosperity. Production activities represent only 15.3 percent of business prosperity, meaning that prosperity is increasingly becoming more dependent upon financial activities instead of productive activities. This is indicative of Ontario possessing a higher-risk operating environment.
  • Our historically low unemployment rate is a red herring, as more individuals remove themselves from the workforce or simply give up the search. The percentage of Ontarians not participating in the labour force is at a recent high of 35 percent, contributing to employers’ on-going struggle to attract talent.

“This important report identifies key vulnerabilities within our economy and provides decisions makers and community leaders with the understanding needed to find the solutions that will drive our economy forward,” said Ken Nevar, Chair of the Board, Oakville Chamber of Commerce. “This year, the Ontario Chamber Network will continue to engage and advocate on behalf of Ontario’s business community to explore these issues and develop the necessary solutions for a more prosperous Ontario.”

“Looking at businesses in the Greater Toronto Hamilton Area (GTHA), 66 per cent said they are confident in their organization’s economic outlook, while only 35 per cent said they are confident in the province’s economic outlook” stated Drew Redden, President of the Oakville Chamber of Commerce. “75 per cent of these businesses cited poor economic policy from the government as a reason why they are uncertain with Ontario’s economic outlook. The Oakville Chamber looks forward to meeting with government officials to discuss economic policies that will facilitate growth for the province’s economy, many of those which are outlined in the Ontario Chamber Network’s Vote Prosperity platform.”

In addition to new economic research, the OER outlines the areas of focus for the Ontario Chamber Network’s policy and advocacy work in the year ahead. In 2018, the Ontario Chamber Network will be looking at the potential of the health and life sciences sector, examining challenges related to urbanization and housing affordability, and studying the critical transportation needs across the province. As businesses continue to cite access to talent as a top challenge, the Ontario Chamber Network will continue to provide proactive recommendations and solutions to ensure we are leveraging our greatest asset—human capital.

Read the Ontario Economic Report 2018.

For more information about the OER, visit: www.occ.ca/ontario-economic-report

View data from the responses of businesses in the GTHA. 


Focus spring legislative session on strategic infrastructure and lowering costs to foster confidence: Oakville Chamber of Commerce

Today, the Oakville Chamber of Commerce, in partnership with the Ontario Chamber of Commerce, formally released its 2017 pre-budget submission containing recommendations to the Ontario legislature as it looks to begin its spring 2017 legislative session. The submission outlines four key budget priorities and thirteen specific recommendations for Queen’s Park to adopt in order to restore fiscal balance and spur economic growth.

Specifically, the Oakville Chamber of Commerce is looking for immediate support for strategic infrastructure investments and sound budget management. Oakville businesses have stated rising costs as the most significant factor impacting business and industry, according to the Oakville Chamber of Commerce’s 2016 Advocacy Survey. The survey also revealed that transportation infrastructure and traffic congestion remains a top concern for the Oakville business community. In fact, 64% of respondents believe that traffic congestion is a significant obstacle for business. Furthermore, the top three infrastructure priorities identified by respondents were all transportation related, calling for investments in local roads and bridges, public parking, and transit. The Oakville Chamber of Commerce urges the provincial government to address the infrastructure deficit by investing infrastructure funds strategically to increase productivity and enable competitiveness for Oakville businesses.

“The Ontario Chamber of Commerce, in partnership with our diverse Chamber Network, will continue to work with the provincial government to ensure that Ontario prioritizes reducing obstacles to business competitiveness,” said Allan O’Dette, President & CEO of the Ontario Chamber of Commerce. “By taking more authoritative action on this issue, we can ensure that Ontario remains an attractive environment for capital investment.” In the submission, Ontario’s Chamber Network is also calling on the government to send a clear message of fiscal stability by balancing the provincial budget by 2017-2018. Such action would result in a more attractive environment for business investment and growth as well as confront the challenge of mounting input costs, such as electricity prices. As signalled last week in the Ontario Chamber of Commerce’s Ontario Economic Report, businesses are maintaining their operations and holding onto cash rather than expanding production or investing. This indicates that industry sees the Ontario economy as high-risk.

“The Government of Ontario must ensure that it addresses recommendations made by the Oakville Chamber of Commerce in their provincial budget in order to support economic growth for Ontario businesses,” stated John Sawyer, President of the Oakville Chamber of Commerce. “Government must focus on reducing the costs of doing business in Ontario, supporting strategic infrastructure development and strengthening its efforts to bolster business competitiveness that allows Oakville to thrive.”

Addressing the current fiscal context and achieving a balanced budget is an underlying theme throughout the pre-budget submission. Ontario’s Chamber Network is committed to working with the Ontario Government to ensure the future economic success of the province. The submission is largely comprised of policy recommendations that are supported by resolutions passed by Ontario’s Chamber Network at the Ontario Chamber of Commerce’s most recent Annual General Meeting.

Inaugural Ontario Economic Report Forecasts Outlook for Regional and Provincial Economy

Vulnerabilities in Ontario’s economy post challenges to our prosperity. Government must prioritize growing the economy, creating jobs and driving a competitive advantage.

Today, the Oakville Chamber of Commerce in partnership with the Ontario Chamber of Commerce, released the inaugural Ontario Economic Report (OER), a landmark agenda aimed at shaping and informing future public policy. The OER includes entirely new economic analyses that demonstrate the difficult economic environment faced by Ontario businesses and consumers in 2017. The report also contains exclusive economic information pertaining to the Greater Toronto Area. The report includes the results of the Ontario Chamber of Commerce’s new Business Confidence Survey conducted in partnership with Fresh Intelligence, a Business Prosperity Index developed by the Canadian Centre for Economic Analysis (CANCEA), and an Economic Outlook for 2017 prepared by Central 1 Credit Union. These datasets, viewed together, reveal broad challenges to Ontario’s economic health. “Our research shows that Ontario’s economic climate is posing challenges to the businesses we represent and Ontarians more broadly,” said Allan O’Dette, President and CEO of the Ontario Chamber of Commerce. “Investment is being held back because of a high perception of risk. We need immediate action in order for our province to continue to grow and prosper.” Economic outlook data reveals that the Toronto region will see a slight drop in the unemployment rate to 6.8 percent in 2017. The median residential housing price will rise 7.4 percent to $580,000, which is a considerable slowdown when compared to the jump of 15.9 percent between 2015 and 2016. Not surprisingly, this will continue to be the region of the province with the highest median housing price and the largest jump in prices year-over-year. “The OER reinforces many of our policy priorities that arose from our 2016 Advocacy Survey” stated John Sawyer, President, Oakville Chamber of Commerce. “Our members stated that rising costs were the most significant factor impacting business and industry; focusing on the rising cost of electricity and the need for investment in infrastructure. With these highlighted as priorities for the Ontario Chamber of Commerce and Ontario Chamber Network, we can assure our members that government will hear our strong and unified voice.” Additional key findings in the OER are from the Business Prosperity Index. This index shows that, despite total business prosperity increasing since 2000, prosperity is increasingly generated from asset and liability management rather than the production of goods or services. This means that Ontario businesses are less likely to earn income from actual business activity today than they have in the past. While Ontario enjoyed an average 2.6 percent real GDP growth rate between 2000 and 2006, the source of wealth generated from the production of goods and services actually declined by 12 percent during that same period. Since the recovery from the “great recession”, production activities fell a further 12 percent over that period. Broadly, this means Ontario’s business prosperity is increasingly dependent upon non-production, financial activities. This challenge is a result of the current economic environment, in which increased costs associated with production, regulation and housing have resulted in weak market and labour force activity. Businesses in Ontario are operating in a risk-averse environment in which they are disinclined to grow production by investing or hiring. “For many years, the voice of Ontario business has cautioned that regulatory burdens, high input costs, and government policies not attuned to innovation have hampered economic growth,” added O’Dette. “The findings in the OER reinforce this, and indicate that there are also structural issues impeding our province’s potential.” The results of the OER highlight the key policy issues that the Ontario Chamber of Commerce and Ontario Chamber Network intends to prioritize in 2017, including workforce development, infrastructure, energy, and health care. Central to the organization’s work is the notion that industry and government tackle these issues together, in order to grow economic prosperity and drive positive change for all Ontarians.