The Sault Ste. Marie Chamber of Commerce (SSMCOC), in partnership with the Ontario Chamber of Commerce (OCC), has 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 Northeast region.
The report incorporates 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.
“Our research shows that Ontario’s economic climate is posing challenges to the businesses we represent and Ontarians more broadly,” says Allan O’Dette, President and CEO of the Ontario Chamber. “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.”
Vulnerabilities in Ontario’s economy pose challenges to our prosperity. Government must prioritize growing the economy, creating jobs and driving a competitive advantage: Sault Ste. Marie Chamber of Commerce
Economic outlook data reveals the unemployment rate in the Northeast economic region will continue to drop (from 7.2 percent in 2016 to a projected 6.7 percent in 2017), as its labour force size rises in the face of negative net migration. The median residential price is expected to jump 2.7 percent to $193,000.
“Although the data reveals some growth in the Northeast region as a whole, we must understand that this will be primarily due to marginal increases in growth that will be seen primarily in Sudbury,” says Rory Ring, CEO of the Sault Ste. Marie Chamber of Commerce. “The report will help us understand the fundamentals influencing our economy and can be a rallying point for our community to work hard at charting a course for increased economic prosperity in the future.”
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.
“Recent statistics released by StatsCan show our population is in decline and the economic analysis completed by the Chamber shows that our GDP has experienced no growth for over 10 years, says Paul Johnson, SSMCOC President. “With this in mind, all levels of government must understand the economic impact of the policies that they set and must take measured steps to foster 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,” adds 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. 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.
The full Ontario Economic Outlook report can be found on the SSMCOC website here.