Businesses lack confidence in future
Chamber of Commerce survey points to hikes in costs, wages
Businesses in the province don’t feel confident about the economy or their own futures and blame rising costs, taxes and the boost in the minimum wage, says a new survey by the Ontario Chamber of Commerce.
A quarter of businesses across the province not only expect lower profits this year, but many say they will continue to shed jobs for the next six months, and more than half don’t plan on making any new hires, the survey also found.
The chamber surveyed 1,046 businesses of all sizes across the province.
“Industry in our province is feeling the impact of the rising minimum wage and significant labour reforms, increasing U.S. and global competition, NAFTA renegotiations, consistent over-regulation, rising input costs and challenges in accessing talent,” said Rocco Rossi, president and chamber of commerce CEO, at Queen’s Park on Wednesday.
“Together, these factors are compromising Ontario’s path to continued eco- nomic prosperity.”
But the Ontario government counters that at a time of record employment and when GDP growth “has exceeded that of Canada and all G7 nations for the past three years, we’ve created more than 800,000 net new jobs, unemployment is at its lowest rate in 17 years, corporate profits are high and — as the report points out — business prosperity is at a 20-year high,” said Daniel Bitonti, spokesperson for Steven Del Duca, minister of economic development and growth.
“However, we know that we need to do even more.
“In particular, we appreciate the (chamber’s) recognition of the need for businesses to remain competitive.”
PC Finance Critic Lisa MacLeod, who continues to meet with small business owners, said low confidence levels are a worry.
“There’s been a basket of issues,” MacLeod said. “A lack of confidence in reinvesting . . . the rapid, recent increase in the minimum wage” and “hydro costs still remain of concern to Ontario businesses.”
“And that really hampers whether they want to expand or even stay open, in many cases,” MacLeoed said.
Rossi is also worried about tax changes south of the border that might make the U.S. more appealing to businesses. He said businesses feel bleak not only about the economy, but also regarding their own futures, with one-quarter projecting lower revenues — a rate twice that of larger businesses.
He also said Ontario’s job numbers are “hiding the sad fact that the share of people in the labour force is continuing to decline — meaning more and more individuals are simply removing themselves from the workforce, or giving up their search for employment.” New Democrat MPP John Vanthof has seen businesses “battening down the hatches,” and that jobs growth, while appearing strong, has meant a boost in part-time and precarious work, which in the long-term is not good for the economy.
Vanthof also said the Liberal government should have done a better job helping businesses prepare for workplace changes and the hike in the minimum wage — which his party has long called for — knowing they pose “a shock for some sectors.”
Bitonti noted that the province has cut red tape for businesses, and chopped electricity bills by about 25 per cent, also trimming companies’ tax rate from 4.5 to 3.5 per cent.
“In this time of significant transformation — as Ontario businesses respond to emerging customer demands and technological changes — we will continue to stand with our businesses as they adapt,” he said.