By: Faye Lyons, Vice President of Government Relations & Advocacy
The Oakville Chamber marked the first major Chamber event of the 2023 calendar year, and 200 guests were welcomed in-person for the first time to our RBC Economic Outlook since 2020.
Out of the gate, Josh Nye, Senior Economist with RBC presented his “Brace for a Bumpy Landing” financial update as well as predictions for 2023. He projected that most central banks were not yet finished with interest rate hikes however we were getting “close to the peak of those tightening cycles,” forecasting a challenging year for both Canada and the global economy. Similarly, predicting a “modest recession” with recovery towards the end of the 2023.
Nye also highlighted that consumer spending has become more pessimistic, leading to lower demand and lower GDP growth due to the expectations of a recession and inflationary pressure.
The frustration is palpable and 2022 was a challenging year due to food and other commodity prices experiencing the sharpest increase since the 1980s. Consumers are feeling the pinch. From the grocery store to their pocketbooks, Canadians are experiencing the very real consequences of restrictive supply chains brought on by the pandemic and the Russian invasion of Ukraine.
Following Mr. Nye’s report, Sean Simpson, Executive Vice President of IPSOS Public Affairs presented their recent polling data, titled “A Convergence of Challenges”. According to an IPSOS Poll, 61% of respondents feel they might not be able to afford gasoline while 53% feel they might not have enough money to feed their families.
Not surprisingly, the top issues of concern to Canadians are healthcare, interest rates, inflation, and the economy.
Perrin Beatty, the Canadian Chamber of Commerce’s (CCC) President and CEO has been consistently calling on the federal government to set a clear strategy for growth. Following the federal government’s Fall Economic Statement (FEC) the Canadian Chamber welcomed both the commitment to fiscal prudence and move towards a balanced budget however Mr. Beatty is not confident that a comprehensive and coordinated strategy is in place to generate the investment to create strong, sustainable economic growth.
Most recently this message was amplified by the former Bank of Canada Governor, David Dodge who co-authored a report released by Bennett Jones LLP where he and his colleague Richard Dion, along with the Business Council of Canada’s Robert Asselin looked at five plausible fiscal scenarios over the next decade. The report concluded that in all scenarios action to restore a sustainable balance between revenues and expenditure is required to achieve the government’s indicated policy goals.
The pandemic headwinds have eased but challenges for businesses have not receded. Many businesses took on debt during the darkest days of the pandemic and have now seen their debt payments skyrocket as interest rates rise. Most experts agree that inflation and interest rates will be the driving force in the economic landscape. That said, the business community will be looking to our provincial and federal leaders to introduce policy initiatives that boost productivity and growth as it is now more important than ever.