Fourth annual Ontario Economic Report Introduces New Small Business Friendliness Indicator
Released today, the Sault Ste. Marie Chamber of Commerce and Ontario Chamber of Commerce’s (OCC) fourth annual Ontario Economic Report (OER) reveals opportunities where both business and government can focus to create an environment more conducive to small business success.
The inaugural Small Business Friendliness Indicator (SBFI) measures Ontario’s competitiveness from the perspective of small businesses. For 2020, the SBFI score is -9, (on a scale of 100 to -100) indicating that the business environment poses some challenges for firms with fewer than 99 employees. However, through measures such as investment in online services and support for regulatory compliance, industry and government could improve that score.
“The results indicate that the Government of Ontario is on the right track by focusing on efforts to digitize government services, expand access to broadband, and cut red tape. However, more work remains to be done,” says Rocco Rossi, President and CEO, OCC. “Small businesses are powerful drivers of economic growth across Ontario: they constitute 98 percent of all businesses and 30 percent of the provincial GDP. Together, small businesses employ nearly three million Ontarians and represent over two-thirds of private sector workers. Given the share of the economy this sector represents, ignoring their competitiveness is like ignoring business competitiveness overall.”
The SBFI is intended to provide an assessment of the ease of business in Ontario across seven different metrics; this year the scores for three metrics were positive: the helpfulness of the Province in starting a business, the ease of licensing, and the delivery of useful training and networking programs from a variety of sources.
The SBFI also revealed that small business owners are eager to embrace more online services from government, especially with respect to regulatory compliance.
Carlo Spadafora, President of the Sault Ste. Marie Chamber of Commerce adds: “The Ontario Economic Report, including the Small Business Friendliness Indicator, is a useful tool to inform government on where to reduce barriers and increase investment to support business competitiveness across the province.”
Other highlights from the Ontario Economic Report include:
· The confidence gap, which measures the difference between business’ confidence in themselves and in Ontario’s economic outlook, widened in 2020 to near historical levels. Although organizational confidence remains high, business confidence in the broader economy dropped seven percentage points in 2020, explained in part by lowered growth expectations nationally and globally. Beyond this, challenges related to the costs of doing business, the high cost of living, and the province’s debt continue to be top of mind for OCC members
· Infrastructure investment, such as transportation and broadband internet, topped the list of business priorities for government, followed by reducing regulatory burdens, lowering the cost of living, and reforming business taxes.
· Challenges related to accessing financial capital, attracting and retaining talent and burdensome regulations continue to compromise the ability of many of Ontario’s community to compete effectively with other jurisdictions.
· Despite these challenges, Ontario’s principal economic indicators remain sound, albeit subdued, heading into 2020, but economic growth is expected to vary greatly across the province. The forecasts show employment and population growth in the Greater Golden Horseshoe and Ottawa surpassing other parts of Ontario, reinforcing a decade-long trend of imbalanced economic growth across the province.
In October of 2019, the Sault Ste. Marie Chamber of Commerce hosted a round table discussion with Hon. Prabmeet Singh Sarkaria, Associate Minister of Small Business and Red Tape. Many of the findings of today’s report were echoed by local Chamber member businesses that participated:
· The ability to recruit and retain talent, the ability to navigate red tape, and taxes compared to other competitor jurisdictions are among the factors critical to local competitiveness.
· A projected decrease in Northern Ontario’s population and employment growth, coupled with an aging population, could signal ongoing challenges in filling jobs, maintaining customer levels and expanding business operations.
The Ontario Economic Report was made possible by support from Hydro One.
Read the 2020 Ontario Economic Report HERE.