Business leaders confident, cautious about economy

YorkRegion.com
January 31, 2014
By Sean Pearce and Chris Traber

While Ontario businesses are marginally more confident in the provincial economy compared to this time last year, more than half remain uncertain about the fiscal horizon, a new survey said.

The Ontario business confidence index in the report Emerging Stronger 2014, released by the Ontario Chamber of Commerce and Leger Marketing, seems to mirror York Region business attitudes, according to local chambers of commerce.

Regional enterprises were among the 2,200 Ontario businesses surveyed in the annual report. The study identifies the immediate steps government and the private sector must take to enhance Ontario’s economic competitiveness and spur job creation in the province.

Regular meetings among regional chambers suggest CEOs and their members believe it will be a positive year, Aurora Chamber of Commerce CEO Judy Marshall said. She underscored “believe”.

Ontario’s economy is relatively buoyant and residential and commercial real estate figures, a significant indicator, suggest a stable fiscal outlook, she said.

While 74 per cent of surveyed businesses are confident in their organization’s economic outlook, up two percentage points from last year, the Aurora cohort weighed in at 64 per cent.

Thirty-seven per cent of Aurora businesses believe Ontario’s economy is headed in the right direction, compared to 42 per cent of provincial respondents.

On the upside, 54 per cent of Aurora chamber members plan expansion in the next five, slightly more positive than the Ontario average. Almost six of 10 local businesses are confident in the Ontario economy, compared to 48 per cent of provincial enterprises.

The business community is hopeful, Ms Marshall said.

The swooning Canadian dollar will serve manufacturers well.

However, there are potential threats.

This week’s announcement to peg the minimum hourly wage to inflation is an issue.

What’s particularly vexing for small businesses is Ontario’s call to bump the current hourly rate of $10.25 to $11.

If the government opts for a major retroactive increase, it would shutter many small enterprises, Ms Marshall said.

The cost of borrowing could also be a storm cloud, as is the growing skilled labour shortage as workers age and retire. Approximately 30 per cent of Ontario businesses are having difficulty filling the skill gap, she said.

The survey’s results are largely reflective of realties for local businesses, especially considering many firms here participated in the exercise, Newmarket Chamber of Commerce president and CEO Debra Scott said.

For example, as suggested in the survey, several enterprises in Newmarket are struggling to attract employees with the right skillsets, she said, adding it’s an issue many companies face.

Going forward, innovation will be vital for all businesses to grow and find internal efficiencies, Ms Scott said. All businesses will need to examine new ways of doing things not just to compete locally, but on the world stage as well, she said.

Government must also play a role in helping businesses thrive and one way it can do that is to examine ways it can collaborate with business, Ms Scott said, citing the chamber’s SmartCommute program as a good example.

Another area that ought to be examined in the public sector is the arbitration system to ensure the need to compensate police, firefighters and other first responders, is balanced against the impact of doing so on the fiscal health of the community, she said, adding residents in many municipalities struggle to pay the tax increases that can result from the upward trend.

“Ontario businesses are confident in themselves and in their capacity to invest in Ontario,” Ontario Chamber of Commerce president and CEO Allan O’Dette said. “I think there’s cause to be cautiously optimistic. Business confidence levels are on the uptick, but they’re not great.”