Sault Ste. Marie, ON / Toronto, ON – Today, the Sault Ste. Marie Chamber of Commerce (SSMCOC), in partnership with the Ontario Chamber of Commerce (OCC) 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% 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 OCC’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.
Rory Ring, CEO of the Sault Ste. Marie Chamber of Commerce, notes that the voice of Sault businesses are very well represented in the report. “We received word that almost 50 businesses identifying as Sault Ste. Marie Chamber members, from a pretty wide range of industries and sectors, provided feedback. What we are seeing is that the concerns of our local businesses are falling in line with many of the concerns voiced by businesses across the province, but that there are also certain issues and concerns that are more prevalent here in the north.”
“Ontario’s businesses 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,” says 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% 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.
In the Sault Ste. Marie / Sudbury market, that number skews slightly higher. Ring notes that 72% of responding businesses anticipate that the minimum wage increase, first to $14 on January 1st of this year and then to $15 on January 1st, 2019, will have a negative impact on their business.
Energy costs and regulations are also weighing heavily on the minds of northern and Sault Ste. Marie businesses, with 66% citing electricity costs as a critical factor to their competitiveness. At the same time, these same businesses are not holding out confidence that programs such as the Fair Hydro Plan are going to help them (56% indicate that the plan will have no impact or may even have a negative impact on their business), while others (28%) believe that the province’s cap and trade system will negatively impact on their business. To address some of these concerns, the Sault Ste. Marie Chamber of Commerce is planning a series of “Know Your Energy” workshops in partnership with the Ontario Chamber of Commerce for April 12th. These workshops will highlight some of the cost savings programs available to assist businesses with everything from retrofits to lighting and refrigeration, to help curtail energy expenses.
Some of the additional highlights included in the 2018 OER on the outlook of Ontario’s economy include:
- Businesses are losing confidence in Ontario’s economy. In 2012, 47% of businesses reported they were confident in Ontario’s economic outlook. Today, that share has been halved, with only 23% of businesses indicating that they 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% 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% vs. 13%). 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% 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%, contributing to employers’ on-going struggle to attract talent.
“This important report identifies key vulnerabilities within our economy, and should provide decision makers and community leaders with the understanding needed to find solutions that will drive our economy forward,” says Don Mitchell, Acting President of the Sault Ste. Marie Chamber. “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.”
He adds that “with both a provincial and municipal election looming in 2018, the Sault Chamber is urging all potential candidates and elected members to review the OER and familiarize themselves with the specific challenges that businesses are facing. The challenges that are outlined in this report need to be discussed at all levels. It’s time for us to have a very open dialogue about the number and types of regulations and outside influencers that are holding back, and in some cases jeopardizing, Ontario’s businesses.”
In addition to new economic research, the OER outlines the areas of focus for the OCC’s policy and advocacy work in the year ahead. In 2018, the OCC 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 OCC will continue to provide proactive recommendations and solutions to ensure we are leveraging our greatest asset—human capital.
To read or download the OER, click HERE.
The Ontario Chamber of Commerce is Ontario’s Business Advocate.
About the Sault Ste. Marie Chamber of Commerce
The Sault Ste. Marie Chamber of Commerce represents the interests of 700 plus business and agencies in Sault Ste. Marie and has been serving the needs of this community since 1889. The Sault Ste. Marie Chamber of Commerce will lead the way as the voice of business, advancing economic prosperity for its membership and the business community. Learn more about the SSMCOC at www.ssmcoc.com.