The 2020 Ontario Economic Report (OER) was released recently. The report provides three areas of measurement: business confidence, the small business friendliness index (SBFI), and economic outlook for the various regions.
“The OER is a useful tool to inform government on where to reduce barriers and increase investment to support business competitiveness across the province,” says Stuart Harrison, President & CEO, Peterborough Chamber of Commerce. “We’ve found that the confidence survey helps government understand its impact on business and we are looking forward to seeing how the measurables under the SBFI will help improve offerings for start-ups and growing businesses.”
Business confidence is measured by the confidence gap. The gap is the difference between business’ confidence in themselves and in Ontario’s economic outlook. In 2020, the gap widened to 37 points which is up from 31 points in 2018 and 2019. The Ontario Chamber of Commerce (OCC) says the main areas of broad concern around confidence include the cost of doing business, the high cost of living and the province’s debt. The survey from which the confidence conclusions are drawn also identified that those with low confidence were also concerned with the national and/or global economic outlook.
When asked how the government could strengthen the province’s competitiveness responding
businesses identified the top four areas:
While the group at the Eastern Ontario Regional Network (EORN) is moving forward with their cell gap analysis and federal and provincial money for system upgrades has been made available, ensuring connectivity for residents and businesses at commonly accepted upload and download rates will continue to be a challenge.
Meanwhile, on built infrastructure the city is facing a deficit of $1.194 billion and the county around $135 million over ten years.
When businesses were asked about the factors critical to their own competitiveness, a business’ ability to recruit talent, navigate regulation and red tape and their ability to innovate were the top three.
The OCC says the confidence survey also reveals a shifting attitude toward technology as a driver of confidence.
The Small Business Friendliness Indicator (SBFI)
In the OER, the SBFI measures Ontario’s competitiveness from the perspective of small business.
For 2020, the SBFI score is -9, (on a scale of 100 to -100). This indicates that the business
environment poses some challenges for firms with fewer than 99 employees. Seven different metrics are used to determine the SBFI score including:
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 an eagerness on the part of small business to embrace more online services from government, especially with respect to regulatory compliance.
Interestingly enough, navigating regulation was identified as the top barrier to starting a business in Ontario.
The OCC says the data supports a long-time advocacy goal of the Chamber network: that small businesses will benefit from a modernized, client-centric relationship with government, rather than complicated new initiatives, grants, or subsidies that tend to have low uptake and awareness.
Overall, the economy in Ontario is expected to slow with real GDP growth of 1.9% in 2020. The OER suggests that household spending will remain tepid as household debt will restrain expenditures. Commercial capital investments fell in 2019 and the authors of the OER suggest this is the result of concern for the future. On the labour market side, in 2019, job growth reached the highest it has been in 20 years and the unemployment rate approached a near 30 year low. That said, the economic outlook section also notes regional disparity and the majority of growth contained to the Greater Golden Horseshoe and Ottawa.
In the Muskoka-Kawartha Census Metropolitan Area (CMA) projections for 2020 are as
follows: the jobless rate will be 6.2%, up from 6.0% in 2019; employment will move from the negative to 0.6% and the population of the CMA will grow at a slightly slower rate of 1.2%, down from 1.3% in 2019.
Challenges related to accessing financial capital, attracting and retaining talent and burdensome regulations continue to compromise the ability of many of Ontario’s communities to compete effectively with other jurisdictions.
We hear these challenges from our members in the Peterborough business community along with the need for continued infrastructure investment that helps increase the economic capacity of communities such as built infrastructure and broadband.
The work of the Chamber will be to help inform the provincial policy landscape and encourage decision-making that makes our economy stronger for all.