Chamber questions where business growth will come from

Yesterday, the Ontario Government presented the first balanced budget since the 2008 recession. The Sarnia Lambton Chamber commends the Province for this achievement, but is concerned that new funding will place a tremendous fiscal burden on future generations and considerable pressure on future economic planning. Budget 2017 projects no deficits over the next three years, nor does it project any surpluses, or commit to paying down the $302 billion that Ontario owes in public debt.

The budget expects business investment to grow by 3.1% annually to 2020, and yet business investment has slowed and business confidence has fallen, as the Ontario Chamber of Commerce reported in its Ontario Economic Report. This is due to increasing input costs like electricity and Cap and Trade, as well as economic uncertainty around US trade policies.

Another concern is that a balanced budget was possible because of short terms gains – like selling Hydro One – and projected earnings from Cap and Trade. Assets can only be sold once, so this revenue isn’t sustainable, and Ontarians must wait and see how future rounds of carbon auctions pan out.

“The Chamber is pleased to see an additional $30 million per year for the Connecting Links fund, as this will help generate economic activity and help our local communities repair roads and bridges,” says Shirley de Silva, President & CEO.  “The Business Growth Initiative will be expanded by $650 million over five years to help small businesses scale into medium- and large-sized businesses. The government provided some clarity on how it plans to spend Cap and Trade revenues and reiterated its support for injecting financial literacy into the secondary school curriculum.


  • Ontario will not return to planned Corporate Income Tax cuts, jeopardizing tens of billions of dollars in potential capital investment and hundreds of thousands of news jobs.
  • There is no deficit over the planning period nor any plan for surplus. Ontario’s debt will rise by 21% in the next three years as a result of interest charges, with no plans to begin debt repayment.
  • 98% of all new jobs since the recession in Ontario have been full time, and 78% of those were in above-average wage industries. This positive economic activity by Ontario’s private sector demonstrates a clear commitment to good jobs.
  • Private sector investment is predicted to grow by 3.1% annually, to 2020, an amount that would outpace growth in real GDP and household spending.
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For Chamber President & CEO Shirley de Silva and Monica Shepley, the Chamber’s manager of advocacy and policy development, participating in a full day of panel discussions and talks about various issues of importance to members was an important exercise for a number of key reasons.

The second annual Advocacy Day, held on March 27 and organized by the Ontario Chamber of Commerce (of which your local Chamber is a member), included a look ahead to the 2018 provincial election as well as discussion around issues destined to be of local and provincial interest.

Those included cap and trade, electricity prices, red tape, and innovation, all issues that are acknowledged to have ongoing effects on the effectiveness and sustainability of business.

Shirley de Silva was able to meet with representatives from the Ministry of Environment and Climate Change, expressing concerns voiced by members over the impact the province’s plans around cap and trade are likely to have on local business.

Monica Shepley met with representatives of the Ministry of Infrastructure and Ministry of Transportation, with discussions largely focused on infrastructure funding. Among the topics discussed were the oversized load corridor and last year’s work on the Indian Road/Highway 402 overpass.

“We take advantage of every opportunity to keep our position on these issues in front of legislators and regulators,” notes de Silva. “The ongoing work is key to making sure those who develop policy know and understand what’s important to the future of our business community.”

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A policy resolution first put forward by a committee of the Sarnia Lambton Chamber of Commerce has become the basis for a pilot project being used to teach high school students the financial skills necessary to succeed in the new global economy.

It was the Economic Policy Development Committee that first proposed the initiative, which was taken up by the Ontario Chamber of Commerce. The committee first envisioned that financial literacy be taught as part of a mandatory Business and Commerce course. The Ontario Chamber had given its nod to the idea in 2013 and again in 2016.

The government’s action to start this pilot project in 28 schools is part of a promise to improve financial literacy education, which is very much aligned with what our Chamber had proposed.

Education Minister Mitzie Hunter, in making the announcement of the pilot project, said students “need to learn how to be resilient and adaptable in a world where the only thing that is constant is change.”

Four different subjects will be part of the pilot project, which involves 28 schools. Those subjects include financial literacy, entrepreneurship skills, digital literacy, and career and life planning. The feedback of teachers will be incorporated into a new curriculum design which will then be implemented across the province in 2018.

The news is also evidence of the impact the local Chamber has on improving the competitiveness of business, said President & CEO Shirley de Silva, congratulating those who worked on this file. “We’re rightly very proud of what our members do and this is certainly a great moment to remind ourselves of how we make an impact on an ongoing basis. This is proof positive that good ideas, especially those as impactful as this one, are worth pursuing.”

The Chamber welcomed the Minister’s announcement in this letter sent on April 4, 2017.

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Mike Schreiner, leader of the Green Party of Ontario, was in Sarnia this week to discuss issues that are important to this area in a roundtable with influential local leaders.

Michael Kooy, Chair of the Board of Directors, represented the Chamber during the discussion. He called on Mr. Schreiner to lend support to some of the key issues the Chamber is working on, including advocating for the Oversized Load Corridor, financial literacy curriculum in schools, and a realistic approach to climate change programs such as cap and trade. Other topics discussed include appropriate regulations, jobs and innovation.

Mr. Schreiner indicated that although the Green Party doesn’t currently hold any seats in the Ontario Legislature, they work every day with the government and opposition to influence policies.

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The Sarnia Lambton Chamber of Commerce continues to bring together members and elected officials so they can discuss matters that are important to business. The most recent example of this was a lunch hour discussion with MPP Bob Delaney, Parliamentary Assistant to Glenn Thibeault, Minister of Energy, on Friday, March 17 at the Chamber’s office.

Delaney spoke briefly to attendees about the Ontario government’s recently announced “Fair Hydro Plan”. Delaney then answered questions posed by Chamber members and heard their stories.

One of those attending was Kathleen Mundy, owner of several area Little Caesar’s Pizza locations and member of the Chamber’s Energy Committee and Board of Directors. “The concerns we have are around electricity costs that are such a proportionally high part of our costs and which impact on our bottom line, shrinking it to the point where there’s no fun in being a small business anymore,” said Mundy.

Shirley de Silva, the Chamber’s President and CEO, said Friday’s visit was the second involving political representatives in recent weeks, the first being from Andrea Horwath, head of the Ontario New Democratic Party, who visited at the end of February.

The Chamber will also meet with the Green Party of Ontario’s leader, Mike Schreiner, when he visits Sarnia-Lambton during an upcoming tour through southwestern Ontario. A Community Roundtable is being hosted by the local association of the Green Party of Ontario and the Chamber encourages members to attend.

The Community Roundtable will take place on Tuesday, March 28 at 1 p.m. at the Lochiel Kiwanis Centre. It is open to the public. Topics to be discussed include the state of the local economy, electricity prices, education and small business.

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Premier Wynne says that electricity prices are “unfairly high” and that current rate payers are bearing a disproportionate cost stemming from decades of energy mismanagement by previous governments of all stripes.

Many Chamber members would agree that electricity prices are too high. We’ve heard many stories about difficult choices, like whether to lay off employees or take out loans in order to pay the electricity bill.

So, when the Chamber heard that the government is cutting electricity bills by 25% (including the 8%  HST cut already announced in January), we wondered, does the plan go far enough to help struggling businesses?

The rate reduction, made possible my remortgaging the Global Adjustment will extend the period of electricity contracts from 20 years to 30 years. It’s estimated that $25 billion will be saved over 10 years, but another $14 billion will be paid in interest for the extended “mortgage”.

There’s additional relief coming for farmers, the less affluent and rate payers in remote areas.  The Industrial Conservation Initiative will be extended to mid-sized manufacturers. Energy conservation programs will continue.  Another significant promise is to freeze rates so they will not increase beyond inflation for 4 years.

Questions remain: is this a fair solution to “unfairly high” hydro rates? Is the NDP plan any better? What solutions will the PCs propose? The Chamber will be watching this issue closely now and until the next provincial election, currently scheduled to be held on or before June 7, 2018.

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The Ontario Chamber of Commerce, the provincial body representing all chamber members across the province, has written to the Premier about challenges it sees in the arbitration system that covers wages and benefits for emergency services such as police and fire throughout the province.

The letter points out that the cost of services have increased at over three times the rate of inflation annually since 2002, making those increases unsustainable.

The Ontario Chamber calls for the Premier to take immediate action. “Our principal concern is that the current system does not adequately consider the capacity of municipalities to pay,” said the letter, signed by Allan O’Dette, president and CEO of the Ontario Chamber of Commerce.

Sarnia Lambton Chamber of Commerce CEO Shirley de Silva said the issue of arbitration affects municipalities’ ability to pay for other essentials, like roads and bridges and to invest in economic development initiatives that will drive economic growth.

“We know from ongoing discussions with our members that the ability of a municipality to fund these essential services needs to be factored into any kind of fair and equitable system that is in place to deal with arbitration issues,” she said. “On that basis, we are encouraging the province to address this issue as soon as possible.”

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In separate letters to MPP Bob Bailey and MP Marilyn Gladu last week, the Chamber shared its priorities for consideration in this year’s provincial and federal budgets.

At the provincial level, investment in high speed broadband, allowing small business owners’ children access to student loans and reducing the public sector’s total compensation premium were highlighted as key solutions to improving productivity and economic growth. The “oversized load corridor” project was also mentioned in the letter, available here as a key infrastructure project that would help create local jobs and boost our economy. The full pre-budget submission can be accessed here.

The Chamber advised MP Gladu to consider 10 ways to build Canada’s economy, as recommended by the Canadian Chamber of Commerce in this report. Read the letter to MP Gladu here.

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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.

Click here to see report

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