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Inaugural Ontario Economic Report says outlook for area economy is 'challenging'
February 11, 2017
A survey released today reveals local business may be confident when it comes to their future but more remain concerned about key economic issues, notably proposed government actions around Canada Pension Plan and cap and trade initiatives. The Sarnia Lambton Chamber of Commerce, which co-released the inaugural Ontario Economic Report, highlighted concerns over the economic climate in the province. The survey, produced by the Ontario Chamber of Commerce, includes references to several sets of data, including a Business Prosperity Index developed by the Canadian Centre for Economic Analysis and an Economic Outlook for 2017 prepared by Central 1 Credit Union. The survey projects a positive net migration of 1,300 for an area that includes Sarnia-Lambton and Windsor. The report cites an improved unemployment rate of 6.3 percent, down from 6.6 percent and a rise in housing prices, with the $183,000 median cost still the lowest in Ontario. But local businesses are said to be weary of investment, citing a combination of high risk and low confidence in the provincial economy, said Shirley de Silva, the Chamber's CEO. "Many of our members, particularly the small businesses, were shown to have the least amount of confidence in the economic outlook," said de Silva. "From a practical standpoint, even though businesses have more financial resources available to them than they have in the last 15 years, they are less willing to invest in production, which would serve to generate wealth and jobs." The Chamber's survey shows a relatively weak business climate, notably the result of a perceived weakness in exporting opportunities and a lack of government infrastructure, which at only 3 percent of GDP is lagging behind the recommended 4.5-5 percent of GDP, according to the Chamber report. The report's companion Business Prosperity Index also shows a drop in the generation of wealth generated from the production of goods or services. "What that tells is that Ontario businesses are less likely to earn income from actual business activity today than they have in the past," said the Chamber's de Silva. Ontario wide, the research shows that Ontario's economic climate is posing challenges to the businesses represented by members of the Ontario Chamber of Commerce, including those in Sarnia-Lambton. "Investment is being held back because of a high perception of risk," said Ontario Chamber of Commerce CEO Allan O'Dette. "We need immediate action in order for our province to continue to grow and prosper." O'Dette said Ontario's business prosperity is increasingly dependent on non-production, financial activities, with a 12 percent drop in production activities having taken place since the Great Recession. Locally, the Chamber, on behalf of its membership, has continued to voice caution around the effect of regulatory burden, high input costs and government policies, said de Silva. "The findings in this report reinforce this," she said. The Chamber, both locally and at the provincial level, will continue to prioritize workforce development, infrastructure, energy and health care as issues of key importance. "In particular, our members are concerned about access to affordable energy, and improvement in infrastructure through funding of local, jobs-generating projects," she added.READ MORE
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