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Ontario Economic Report 2018: Input Costs Soar as Confidence and Projected Profits Fall

Posted 4 years ago on · Permalink

Ontario Chamber of Commerce reveals consequences of a climate that discourages growth

TORONTO, February 7, 2018 –  Today the Ajax-Pickering Board of Trade (APBOT), in partnership with the Ontario Chamber of Commerce (OCC) released the second annual Ontario Economic Report (OER). The report is a comprehensive analysis of data and emerging trends on the economic health of the province, and 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.

“Industry in Ontario 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,” said 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.”

Some of the 2018 OER highlights on the outlook of Ontario’s economy include:

  • Businesses are losing confidence in Ontario’s economy. In 2012, 47 percent of businesses reported they were confident in Ontario’s economic outlook. Today, that share has been halved, as only 23 percent of businesses 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 percent 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 percent vs. 13 percent). 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 percent 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 percent, contributing to employers’ on-going struggle to attract talent.

To view the full Ontario Economic Report, visit: www.occ.ca/ontario-economic-report.

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.

The Ontario Chamber of Commerce is Ontario’s Business Advocate.

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Established in 1955, the Ajax-Pickering Board of Trade (APBOT) is the voice of business in Ajax and Pickering, ON. With more than 700 members, APBOT represents an array of business sectors and small to large organizations. APBOT is part of the nation-wide network of Chambers of Commerce and Boards of Trade, as well as the Joint Chambers of Durham. For more information regarding the Ajax-Pickering Board of Trade, visit: www.apboardoftrade.com.

For more information, please contact:

Brooke Pollard, Policy & Communications Specialist, Ajax-Pickering Board of Trade

T: 905-686-0883 x 229 | E: bpollard@apboardoftrade.com