The Quinte Regional Chambers of Commerce in partnership with the Ontario Chamber of Commerce (OCC) are calling for immediate action by the government to lower risk and boost economic growth.
On Tuesday, the chambers released the inaugural Ontario Economic Report (OER) – an 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.
“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 OCC. “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.”
The report includes the results of the OCC’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.
“This report points out once again that the cost of doing business in Ontario and in particular the cost of electricity is eroding the confidence of the business community,” said Bill Saunders, CEO Belleville Chamber of Commerce. “This erosion of confidence results in reduced capital investment and a reluctance to hire additional staff.”
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.
“The Ontario Economic Report is the beginning of an exciting new chapter for the Chamber Network’s policy and advocacy efforts.” said Emily Cowan, Executive Director, Prince Edward Chamber of Tourism and Commerce. “Each year, the Report will provide a snapshot of the year that was and the year ahead. It is analyses like this that will lead a data-driven conversation between key actors and government. The OER will focus conversations and drive change.”
While Ontario enjoyed an average 2.6% real GDP growth rate between 2000 and 2006, the source of wealth generated from the production of goods and services actually declined by 12% during that same period. Since the recovery from the “great recession”, production activities fell a further 12% over that period.
Broadly, this means Ontario’s business prosperity is increasingly dependent upon non-production, financial activities.
“Despite Ontario businesses being cautiously optimistic about their own economic futures, the vulnerabilities in the Ontario economy are still causing them to be unsure about the wider provincial economy,” said Suzanne Andrews, General Manager of the Quinte West Chamber of Commerce. “The OER offers a new understanding of why businesses are struggling and highlights critical areas of policy change needed to address the causes of slow growth.”
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 OCC intends to prioritize in 2017, including workforce development, infrastructure, energy, and health care a press release stated.
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.