If there was ever a time to spend your dollars in Peterborough, it's now. #LoveLocalPtbo has always been our mantra, but now because of the COVID-19 pandemic, it means even more.
Our current situation in the city and county of Peterborough is one of tenuous stability. We’ve worked hard, our local businesses have worked hard. But we know in watching other parts of the province and country that it could change on a dime.
Over the past eight months, Statistics Canada has been conducting the Canadian Survey on Business
Conditions. This partnership with the Canadian Chamber of Commerce is designed to understand the ongoing effects of the COVID-19 pandemic as the economy moves through the various stages of recovery.
Most recently, information was released on how businesses are faring entering the fall.
Dr. Trevin Stratton, Chief Economist and Vice-President of Policy at the Canadian Chamber of Commerce states, “Today we learned 30% of businesses still operating in October no longer know how they can continue to operate under the existing conditions, and a further 11% indicate they can only operate for three more months.
The news is quite grim for 40% of Canada’s businesses looking forward, particularly for those businesses operating in sectors at the bottom of a K-shaped recovery.
We know that our economy will not recover until at least 2022, the most optimistic scenario assuming widespread vaccine deployment by then. The reality is we are in this for the long haul, and we need to start thinking long-term.
With finite public resources available, we need to look carefully at the return on investment of government spending. Some programs are more beneficial than others. Some policies will contribute more to economic growth. Let’s make sure federal spending is focused on quality over quantity.
Policy makers must be laser-focused on the nature of fiscal spending, and those programs must focus on addressing issues in specific sectors. The one-size-fits-all approach to support programs is not sustainable through 2022, and it may not be particularly useful at this stage of the pandemic.
Consider the following data points:
• Close to three-fifths (57.0%) of businesses in the accommodation and food services sector reported that they were unable to take on more debt
• Approximately one-third of businesses in the arts, entertainment and recreation (29.4%) and accommodation and food services (29.2%) sectors reported that they could continue to operate at their current level of revenue and expenditures for less than six months before considering further staffing
actions, closure or bankruptcy
• Over half of the businesses in the accommodation and food services (55.6%) and arts, entertainment and recreation (54.9%) sectors did not expect their revenues to be higher over the next three months than over the previous three months
• Over one-quarter of businesses in the arts, entertainment and recreation sector (28.9%) and almost one-quarter of businesses in the accommodation and food services sector (22.5%) expected to reduce their number of employees over the next three months, the highest proportions among all sectors With the second wave of the virus now in full force, keeping our fiscal powder dry for the longer run and tailoring supports for the most severely affected individuals and businesses should characterize the second wave of support programs.”
From what we are hearing from our Peterborough Chamber members we know that programs need to provide the stability that doesn’t exist right now. We know that costs such as increased insurance and the potential for increased taxes are weighing heavily along with the concern of having to take on more debt.
More results from the Canadian Survey on Business Conditions indicate the majority of employers are expecting to retain the same number of employees over the next three months. However, that statement doesn’t apply to industries hardest hit by the pandemic such as arts, entertainment and recreation.
So where there is a bit of light, there is also great concern. The amazing part is that you can help. You can help by supporting our local businesses, by safely visiting the wonderful gems in our city and county, and by following the safety protocols in place.
Together, let’s #LoveLocalPtbo
On November 5, 2020, the Government of Ontario released its 2020 Budget, “Ontario’s Action Plan:
Protect, Support, Recover.”
Budget 2020 contains both measures to protect against the immediate impacts of COVID-19 (including new funds for testing and reducing the surgical backlog) and measures intended to lay the groundwork for economic recovery (such as electricity and tax reforms).
“Ontario’s business community welcomes the budget. It is an impactful response to the current crisis, and demonstrates the beginning of a long-term plan for economic growth,” said Rocco Rossi, President and CEO of the Ontario Chamber of Commerce. “This budget addresses many of the actions we, on behalf of Ontario’s business community, have been asking for. We believe that when business prospers,
Key highlights include:
Reducing Costs of Doing Business
Laying the groundwork for long-term economic growth by advancing critical broadband infrastructure, smart taxes to enhance business competitiveness, efficient regulation, workforce training, and opportunities for public-private partnerships.
Reducing commercial and industrial electricity rates will make Ontario businesses more competitive and enable them to invest in recovery and growth. For years, Ontario businesses have paid more for electricity than most other jurisdictions in North America, and the pandemic has only increased electricity system costs.
Starting January 1, 2021, a portion estimated at approximately 85 per cent of high-cost wind, solar and bioenergy contracts will be funded by the Province, not ratepayers. This is expected to create an average reduction of 16% for Class A customers and 14% for Class B customers.
Business Education Tax Rate (BET) Reduction and Regional Equality
BET rates vary throughout Ontario; as a result, businesses in London, Waterloo, Hamilton, Toronto,
Windsor/Middlesex, and Kingston are paying higher taxes than those in other regions. The government has announced it will both reduce the BET rate and address regional variance within that rate, both of which the OCC has advocated for in the past. The City of Peterborough is at the same rate as London while the County of Peterborough rate is slightly less for commercial businesses over industrial tax class businesses.
Employer Health Tax (EHT)
The province has committed to making the threshold of $1 million permanent, meaning some businesses will no longer have to pay this tax. The decision to make the higher EHT threshold permanent is a welcome one that will free thousands of businesses from having to pay this tax.
The EHT exemption will provide an estimated $360 million in relief in 2021-22.
Reskilling is essential to the rapid re-employment of workers that were displaced during the COVID-19 crisis, particularly given the permanent restructuring expected in hard-hit sectors such as retail, hospitality, and tourism. Creating a common understanding and validation of micro-credentials for employers through the
development of a micro-credential framework will be critical to get people reskilled and back to work.
Small Business Tax Relief
The move to allow municipalities to target property tax relief specifically to small business is a creative and important tool to grant communities, given that small business has been hardest hit by the pandemic.
Broadband is a basic infrastructure requirement in today’s economy, but the ongoing pandemic has made it even more essential to public health and economic resilience. We are very pleased to see the government take this seriously with an additional investment of $680 million (for a total of nearly $1 billion) over six years.
“The Peterborough Chamber was happy to hear about a focus on broadband, electricity price improvements for businesses and making the higher tax threshold for the Employer Health Tax permanent,” says Stuart
Harrison, President & CEO, Peterborough Chamber of Commerce. “All of these changes will increase competitiveness for our local businesses.”