Voice of Business: A Tale of Two Budgets

Both the federal and provincial governments have recently released their budgets and they could hardly be more different.

Ontario’s budget came in $10.7 billion under its initial projected deficit with projections of a balanced budget next year. Its debt to GDP ratio shrank. Driving this is higher revenue from inflation.

It’s in stark contrast to the federal budget where the deficit for this year is expected to increase by $6.6 billion. The plan to balance the budget by 2027-28 is gone, with no current projections or strategy for balancing the books. Our national debt to GDP ratio is increasing this year but is expected to decline later.

In the fiscal philosophy of spending when times are bad and saving when times are good, we’re getting some mixed messages regarding what times we’re in.

The Ontario Chamber of Commerce (OCC) has its analysis of the budgets. The highlights for Ontario include:

• Further steps to address labour market challenges by boosting immigration through the Ontario Immigrant Nominee Program and removing barriers to foreign credential recognition through the Ontario Bridge Training Program.

• Creation of additional pathways into health care jobs through the expansion of the dual credit program which will provide secondary students with opportunities to start their careers as nurses, personal support workers, medical laboratory technicians and paramedics sooner.

• Introduction of the Ontario made Manufacturing Investment Tax Credit to support local manufacturing companies in investing and expanding in Ontario, strengthening provincial supply chains.

• Investments in mental health through an additional $425 million over three years for mental health and addictions, including a five per cent increase in the base funding of community‐based mental health and addiction service providers funded by the Ministry of Health.

It comes up short in investing further in the healthcare system, supporting small businesses through scaling digitization funding and improving access to capital, climate adaption and mitigation strategies, removing interprovincial barriers to trade and labour mobility, and investing further in our supply chain.

For the federal budget, the OCC’s analysis pulls out a few highlights:

• Incentivizing investments in the green economy, with new refundable tax credits for clean electricity, carbon capture, and equipment to manufacture and process clean technologies and critical minerals; an expansion of the reduced corporate income tax rates for zero-emission technologies; and funding through the Canada Infrastructure Bank for major clean infrastructure projects.

• Advancing economic reconciliation by developing an Economic Reconciliation Framework, supporting Indigenous equity ownership of infrastructure projects, co-developing a First Nations-led National Land Registry to help realize economic benefits of First Nations lands, and implementing a co-developed Urban, Rural, and Northern Indigenous Housing Strategy.

• Mitigating supply chain challenges by introducing measures to support a National Supply Chain Strategy and developing transportation supply chain data that will help reduce congestion, improve efficiency, and inform future infrastructure planning.

• Supporting a resilient health care system through the New Canadian Dental Care Plan, funding for a renewed Canadian Drugs and Substances Strategy to help address the opioid overdose crisis, and an ongoing focus on data collection.

The federal budget fell short on addressing labour market needs, reforming employment insurance, fast-tracking broadband internet investments, modernizing the federal tax system, and committing to regulatory reforms for industries that include cannabis, hospitality, and tourism.

Both budgets tackle some of the key issues our business community is facing and both fall short in some crucial areas.

Whether we should be tackling the current inflation challenges and looming recession with a budget big on spending or using the “good times” of increased government revenue to reign in spending is a difficult question — though both governments are clearly showing where they stand on the issue. The next year is going to be difficult to predict in terms of our economy. It will be interesting to see how accurate current spending predictions are at the end of the fiscal year.

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Voice of Business: We Are All Ambassadors For Our Region and We Have a Lot to Showcase

The summer season will soon be upon us and it’s going to be a pivotal year for the tourism industry.

It’s an understatement to say the last three years have been especially challenging for the tourism sector. It’s not just the public health restrictions and shut downs that we went through — tourism, and the service and hospitality sectors more broadly, are facing some of the biggest hurdles in hiring and retaining their workforce. This is especially difficult in rural areas where there is little local workforce to draw from.

According to the State of the Ontario Tourism Industry Report from the Ontario Chamber of Commerce and Tourism Industry Association of Ontario, issues including access to labour, soaring debt, rural internet challenges, and a lack of public transportation connecting destinations have led to only four in 10 tourism operators forecasting profitability in 2024.

While this paints a bleak picture of the industry, our region has so much to offer. For the outdoorsy, we have a collection of beautiful lakes, rivers, and hiking trails that are the envy of many places across Canada and beyond. Downtown Peterborough offers a collection of culinary and cultural activities that punch well above our weight. Those looking to spend a few nights can choose between big hotels with all the amenities or quaint boutique hotels, resorts that are bustling with activity or secluded and serene, lakefront cottages, bed and breakfasts, or bring your own lodging with a camper or tent.

One particular gem that’s returning bigger and better is Peterborough Musicfest. Where else can you find a summer-long free concert series that has hosted the likes of Randy Bachman, Tegan and Sara, and Walk Off the Earth? Musicfest has a local economic impact of $5 million and brings in an audience of 150,000 over the summer. It’s a long-running hit with locals, but more than 1/3 of attendees report being from out-of-town.

It's not just big names and big crowds — it’s uniquely Peterborough. It’s right on the shores of Little Lake, the beautiful gathering place at the end of the rapids known as Nogojiwanong. It’s also in the heart of our city, just a few blocks from our vibrant downtown restaurant and shopping experience and close enough to inhale the sweet smell of oatmeal from Quaker. As a free music festival that aims big, it’s supported by our community through corporate sponsorships from local businesses, government grants, community fundraising initiatives, and private donations.

The 2023 Peterborough Musicfest Lineup has yet to be announced, but the team have already spilled the beans on two acts: Dwayne Gretzky on July 5 and Little River Band on July 26.

Our region has a many more activities that enhance our tourism sector. 4th Line Theatre is running two shows at their beautiful rural location near Millbrook. We have top-notch entertainment venues at Market Hall, Showplace Performance Centre, and the Peterborough Memorial Centre. You can immerse yourself in history at Lang Pioneer Village, Petroglyphs Provincial Park, Peterborough Museum & Archives and soon at a beautiful brand new Canadian Canoe Museum. We have beaches, wineries, breweries, distilleries, agricultural fairs, unique shopping experiences, art galleries, golf courses, agritourism, river cruises, and much more. Peterborough and the Kawarthas Tourism has a host of suggestions for things to enjoy here in our region.

We have so much to offer here in Peterborough and the Kawarthas. Let’s be intentional in investing here in our community when it comes to enjoying and promoting local. Tourism campaigns aren’t just something for marketing agencies — it’s something we can all do when talking with family, friends, colleagues, and our social media connections. We are all ambassadors for Peterborough and the Kawarthas and we have a lot to showcase.

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Voice of Business: Ontario Budget Must Focus on Business Predictability and Growth

Ontario needs to foster an environment that supports longer-term, sustainable economic growth.

That’s the message the Ontario Chamber of Commerce (OCC) is sending to the provincial government with its 2023 budget submission.

The recent Ontario Economic Report (OER) showed Ontario business confidence has dropped to a record low in 2023. Driving that are labour shortages, inflation, healthcare system vulnerabilities, and fears of a potential economic slowdown.

“We know from the OCC’s 2023 OER that many small businesses would like to see public policies that support their immediate financial and operational needs, while large businesses are more interested in broader workforce development and health care challenges,” said Rocco Rossi, President and CEO of the OCC. “What we are looking for in Budget 2023 are measures that support greater productivity and long-term, sustainable economic growth. That means we want to see the government continue to prioritize growth-enabling investments to address labour shortages, the health care crisis, and infrastructure deficits, and modernize regulations and government services in the year ahead.”

The budget submission groups recommendations to the Government of Ontario under the following categories: Sustainable Growth, Complete Communities, and Modernization.

Some key proposals include:

• Fostering an inclusive workforce and addressing labour market challenges by supporting innovative training and education models, boosting immigration, making regional immigration pilots permanent, continuing to remove barriers to labour mobility and foreign credential recognition, and adopting supplier diversity programs to create opportunities for entrepreneurs and businesses that support diversity and inclusion.

• Strengthening health system capacity and resilience by continuing to tackle the health human resources crisis, combating growing rates of mental health and addictions challenges, supporting the aging population, and continuing to address the backlog of surgeries and routine immunizations, as well as deferred cancer treatments, diagnostics, and procedures.

• Investing in growth-enabling infrastructure by continuing to accelerate broadband rollout across the province, building affordable housing and complete communities, expanding regional transportation connectivity, and investing in energy generation, transmission, and distribution infrastructure to support long-term growth and resiliency.

• Modernizing government services and regulations by building an integrated health data system, bolstering interprovincial trade, improving supply chain infrastructure and public sector procurement processes, and lowering administrative burdens on business.

The recommendations outlined in the OCC’s budget submission were developed with businesses, associations, post-secondary institutions, and chambers of commerce and boards of trade from across the province. See the full submission here.

Ontario's business community needs a clear and predictable path forward to support economic recovery and growth. We want to see the government direct sufficient resources towards the hardest-hit sectors, while laying the groundwork for a sustainable and inclusive economy.

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Voice of Business: The Government Needs to Re-evaluate the Repayment Terms of the CEBA Program

Loans and grants were a lifeline for businesses three years ago when the pandemic hit. Now, the path to repayment is proving challenging.

Many businesses borrowed from anywhere they could — banks, credit unions, the government, family, and personal finances — as rain day funds weren’t deep enough to deal with years of public health restrictions.

One program in particular offered tangible help early on in the pandemic — the Canada Emergency Business Account (CEBA), which offered a total of $60,000 in interest-free loans for small businesses and not-for-profits with up to $20,000 eligible for loan forgiveness.

In 2021, the Peterborough and the Kawarthas Chamber of Commerce had its policy resolution “CEBA Loan Forgiveness For Hardest Hit Businesses” endorsed by chambers and boards of trade from across Canada. We pushed for at least a two-year deadline extension, keeping the forgivable portion available to all businesses that continue to have operations impacted by ongoing COVID-19 public health restrictions, and allowing businesses that continue to have operations impacted to be exempt from incurring interest prior to the balance of their loan being due. Otherwise, those businesses hit the hardest would get the least out of the program (interest on their loans and no forgivable portion) while putting the government in the awkward position of having to collect from the very businesses it pledged to support with this measure.

In January 2022, the federal government extended the deadline by one year. That means businesses will be expected to pay back two-thirds of their loan by Dec.31, 2023 or they will become ineligible to get a portion of their loan forgiven and begin to accrue interest at 5% before coming due December 31, 2025.

A recent CBC article titled “Only a fraction of CEBA loans have been repaid as businesses call for deadline extension” claims only 13% of the 900,000 businesses have repaid their loan in full. In total, $5.7 billion has been repaid of the more than $49 billion in loans issued.

A lot has changed since those initial loans were issued in 2020. The optimists among us figured we would be through the worst of the pandemic and its public health restrictions in a matter of weeks or months. Three years later and we finally seem to be through the worst of it but have been hit with continued supply chain and labour bottlenecks and challenges, the highest inflation in a generation, soaring interest rates, and the looming threat of a recession.

Given all that has unfolded, our 2021 policy resolution may not have gone far enough.

We do need to encourage those who have come through the last three years in decent financial shape to pay back their loans. There are more than $43 billion in outstanding CEBA loans out there and it’s to the benefit of all taxpayers that those who are able to repay it do so. And this program is just one part of the massive, multi-government spending program that helped people, businesses, and non-profits make it through an unprecedented global crisis. Our governments have accrued massive amounts of debt and we need to do what we can to pay back what is owed.

But we need to set criteria to support those hit the hardest. The result of the current design of the program is that the most vulnerable businesses will also get the least benefit from it, resulting in significant interest incurred and the requirement to pay back 100 per cent of the principal — dragging out their recovery even longer.

This government has acknowledged the disproportionate impact on social demographics including women, ethnic and racial minorities, and First Nations. A larger number of people in these demographics depend on the hardest-hit businesses for employment and those who own businesses tend to have less financial backing to weather a financial crisis like COVID-19. The hardest hit business sectors include food service, hospitality, tourism, arts and entertainment, retail, and personal service. Many faced the most significant public health restrictions, were least likely to have access to capital, and continue to bear the brunt of our workforce shortage.

Adding to this struggle is the mental health crisis many business owners are facing. Prolonged social restrictions, struggle to repay debt, and a less optimistic recovery are weighing heavily on many people who have invested significant time and money into their businesses.

The federal government needs to re-evaluate the repayment terms of the CEBA program. Businesses hardest hit over the last three years require a longer interest-free loan period and a larger debt forgiveness program.

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Voice of Business: Reducing Barriers to Regional Cooperation Is Key to Reaching Our Goal

No municipality works in isolation — we all have neighbours and it’s imperative that we work together toward common goals.

Business, life, and recreation don’t stop at political boundaries.

The Peterborough and the Kawarthas Chamber of Commerce have long been advocates for regional cooperation. One barrier we are working on is relating to how we track job creation for the province.

We have a resolution that we have submitted to the Ontario Chamber of Commerce titled Accounting for economic outcomes in regional collaboration projects. We first submitted it three years ago but it has largely gone unaddressed and so with the support of other Ontario Chambers, we’re pushing for this again.

Jobs created during collaborative regional economic development projects are only attributed to the municipality in which they are geographically located.

The 2019 report from the Ontario Chamber of Commerce titled The Great Mosaic – Reviving Ontario’s Regional Economies, states:

“Ontario’s economy is undergoing a period of rapid change. Twenty-first century globalization, urbanization, and technological transformation are challenging the status quo and redefining what it means to be competitive. Given these and other pressures, Ontario’s overall prosperity will increasingly depend on the strength of its regions.”

It’s fitting to start a discussion around how to then calculate economic impact. Municipalities impacted by A Place to Grow: Growth Plan for the Greater Golden Horseshoe is bound by provincial legislation to have official plans, the land needs assessments, and zoning by-laws in place that detail how each municipality is going to achieve the pre-determined milestones of jobs and residents per hectare. Those results are then reported to the province.

And while these plans and processes are necessary, they don’t account for the fact that more and more economic development is collaborative and crosses geographic lines. One example can be found in the City of Peterborough. The City has contributed significant dollars to infrastructure at the regional airport that lies just outside its geographical boundary. The combined investment by the City, County and local township has resulted in the number of jobs increasing from 50 to over 300 over the past decade. The question becomes how is the outcome of those investments (jobs, new economic opportunities, etc..) accounted for in growth targets? Right now, the outcome falls to the municipality in which the tangible asset exists – therefore, we are back to geographical boundaries even though it is a regional collaboration.

This disconnect between investment and reporting rules is a barrier to regional economic development because the value of the investment is diminished when the result is not recognized. To resolve this issue and encourage more regional collaboration that will benefit all of Ontario, we ask that government amend the reporting rules and allow all municipalities to account for the jobs they have helped create through regional projects.

The Growth Plan document identifies a need for complete communities with the following paragraph in section 2.1:

“To support the achievement of complete communities, this Plan establishes minimum intensification and density targets that recognize the diversity of communities across the GGH. Some larger urban centres, such as Toronto, have already met some of the minimum targets established in this Plan, while other communities are growing and intensifying at a different pace that reflects their local context.”

This allowance will encourage more collaboration across geographical lines by municipalities and help regions invest in projects that will benefit their area and the province as a whole. It will also more accurately reflect the local context of the urban-rural mix in the outer ring municipalities. These outer ring municipalities also address issues such as transit and conservation issues across geographical lines, yet recognition of the impact of regional economic development on multiple municipalities does not happen.

Continuing in 2.1 is the following:

“…consider opportunities to better co-ordinate our collective efforts across municipalities to support their contribution to economic growth and improve access to transit.”

If this call is to be realized to its maximum potential then there has to be allowance to recognize the impact of jobs created and economic impact when municipalities work together.

Our recommendation to the Government of Ontario is to develop a mechanism that allows for multiple municipalities who have invested in a regionally significant project to account for jobs created proportional to financial contribution when reporting to government

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Voice of Business: Keeping Passenger Rail Service On Track

Passenger train service to Peterborough is closer to reality now than it has been since it ceased in 1990.

Getting here didn’t happen easily or quickly and we are still years away from having shovels in the ground.

Our Chamber of Commerce has been a fierce advocate for its return for well over a decade. Our Chamber has been integral in the process, including funding the creation of the Shining Waters Railway Corporation. Our team, both staff and volunteer board and committee members, have put many years into researching and developing the business case behind the proposal and laying out the logistical hurdles we would need to jump to get there. People like Dick Crawford, Jim Hill, Stuart Harrison and the late Tony Smith worked tirelessly with our leadership over the years, including former MPs Maryam Monsef and Dean Del Mastro, former MPP Jeff Leal, and former Mayors Darryl Bennett and Diane Therrien.

The original plan was to connect the Peterborough area to Toronto with a line terminating at the rail yard in Havelock. That all changed in 2016 when VIA Rail entered the conversation, proposing High Frequency Rail (HFR) not just to Toronto, but to Ottawa as well. That proposal would grow to include Montreal, Trois-Rivières, and Quebec City.

On Thursday, Minister of Transport Omar Alghabra came to the Peterborough and the Kawarthas Chamber of Commerce office to announce the next phase of development — beginning the Request for Qualifications (RFQ) process.

As per Transport Canada: The purpose of the RFQ is to identify and qualify up to three top candidates who will be invited to participate in the Request for Proposals (RFP) process, anticipated to begin in summer 2023. The procurement process will help select a private developer partner to work in collaboration with VIA HFR, the newly created subsidiary of VIA Rail, to design and develop the High Frequency Rail project.

And:

The High Frequency Rail procurement process is designed to encourage innovation, provide flexibility, and identify the optimal solution for the project. Therefore, RFQ respondents will have the flexibility to consider alternatives to meet or exceed the project results described in the Request for Qualifications. This would include opportunities to increase speeds beyond 200 kilometers per hour on some segments of the High Frequency Rail project, if it is cost effective to do so.

As Minister Alghabra stated, this is the largest infrastructure project. It will cost billions of dollars to build and it will take years before trains arrive.

Progress on this portfolio is exciting and the enthusiasm surrounding it is contagious.

However, announcements on this subject also elicit skepticism. The return of passenger rail service to Peterborough has been generating headlines for the last 15 years. There have been overly optimistic projections on when rail service would return. People are understandably a bit frustrated that it hasn’t happened yet and a little disillusioned as to whether it will happen at all.

What is missing from that narrative is that the champions of this project essentially spent a decade drumming up interest in connecting passenger rail to Peterborough and seeking out willing partners within the rail industry and within our government. It took years of research, planning and meeting with industry players to get this to the point where the industry would take over and lead it. This is exactly what happened when VIA Rail jumped in back in 2016.

We now have willing partners with VIA Rail and VIA HFR driving the train with the support and endorsement of municipal, provincial and federal government leaders across Ontario and Quebec. This project going forward is bigger in scope and service than what we started out with. We are focusing on mostly electric trains that will even further minimize our carbon footprint. We are looking into the merits of making sections high-speed, taking passengers at speeds beyond 200 km/h. This project will provide frequent service to communities from Toronto to Quebec City on a reliable schedule that dedicated passenger tracks afford. Travel time between Ottawa and Toronto may be as low as 3 hours and 15 minutes.

This project is now far bigger than a commute from Peterborough to Toronto — it’s going to serve 19 million people in Canada’s most densely populated corridor. It will dramatically reduce carbon emissions, cutting 12.5 Million tons of tCO2e, the equivalent of a car-pool reduction of 2.8 million vehicles.

We’re moving forward and it’s exciting!

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Voice of Business: Five Key Areas the Federal Budget Needs To Target

The Government of Canada is expected to release its 2023 budget in the coming weeks.

The Canadian Chamber of Commerce has put together its submission aimed at breaking down barriers and improving the competitiveness of Canadian businesses.

In his letter to Finance Minister Chrystia Freeland, Canadian Chamber of Commerce (CCC) President and CEO Perrin Beatty writes:

“The Canadian Chamber urges the government to focus its budget on the imperative for growth driven by the private sector: we cannot borrow our way to prosperity. The government’s role must be to ensure an environment that encourages private sector investment, and to foster the conditions for economic growth. Many of the measures included in our submission, including regulatory reform and dismantling internal barriers, will cost little or nothing now but will generate future wealth for our society.

In the aftermath of the pandemic, our international competitors continue to outpace us. In the areas where it must use tax dollars, the government must distinguish between spending and genuine investment: the bar must be whether an initiative will generate economic growth and create a higher standard of living for Canadians. Decisions we make in 2023 will determine whether future generations will enjoy the opportunities and prosperity we have been so fortunate to inherit. Our ability to respond to today’s health crisis or tomorrow’s climate emergency will be determined by whether we have built good jobs and robust growth across our economy.”

The proposals in the CCC’s submission fall under five categories:

• Building Trade-enhancing Infrastructure

As geopolitical tensions continue to disrupt global supply chains, Canada faces both an opportunity and an obligation to export our abundant natural resources. However, our inadequate trade-enabling infrastructure impedes our ability to get goods like food, fuel, fertilizer, and critical minerals to our domestic manufacturers, ports of export, and international partners.

• Easing the Burden of Doing Business

Developing a closer partnership with business need not cost the government anything, but it will help draw much-needed investment to Canada. Similarly, we must modernize the tax system to make it simpler, more efficient, and fairer. Our submission includes a series of low- and no-cost measures that can promote economic growth.

• Transitioning to Net-Zero

For Canada to become a global leader in producing and exporting sustainably produced energy, carbon dioxide-removal technologies, clean fuels, critical minerals, and sustainable goods, the government must implement and sustain investment and production tax credits alongside a trade corridors strategy that addresses supply chain concerns. Our goals of “friendshoring” ring hollow if we cannot demonstrate that Canada is a reliable business partner to our friends and allies.

• Attracting and Retaining Talent

With one million job vacancies, Canada needs a coherent plan to attract and retain a Twenty-first Century workforce, including through targeted supports for traditionally underrepresented workers. This plan must link our broader immigration targets to the skilled talent employers need right now, as well as to how we attract, retain, and provide international students with pathways to work and permanent residency.

• Enabling an Innovative Economy

To maintain a competitive edge that stimulates growth in emerging sectors, the government should capitalize on our innovative advantages in Artificial Intelligence, cybersecurity, digital health, clean tech, and clean fuels by modernizing research and development processes, and by stimulating product development and commercialization.

Check out the Canadian Chamber of Commerce Pre-Budget Submission for the list of recommendations.

We are heading into 2023 with record low confidence in our economy. Inflation is slowing along with the overall economy. How our governments invest in areas like climate change, innovation, workforce development, trade, and taxation will set the course for our economy and the resiliency of our local business community for years to come.

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Voice of Businesss: Businesses Are Optimistic About Themselves But Lack Confidence In the Economy

Coming out of few rocky years and into another year of economic uncertainty, business confidence has dropped to a new low according to the Ontario Chamber of Commerce’s (OCC) seventh annual Ontario Economic Report (OER).

“Ontario business confidence has dropped to a record low in 2023. Labour shortages, inflation, health care system vulnerabilities, and forecasts of an economic contraction are dampening confidence in the province’s economic outlook,” said Rocco Rossi, President and CEO, OCC. “Only 16 percent of organizations surveyed have confidence in the economy. This is down from 29 percent last year. Promisingly, most businesses feel confident they can withstand these headwinds and continue to grow in the year ahead.”

The Ontario Economic Report is an interactive report with regional and sector-specific data on business confidence, public policy priorities, regional forecasts, and timely business issues such as employee health and well-being, climate change, succession planning, diversity and inclusion, reconciliation, and remote work.

Key highlights of the report include:

• Business confidence has dropped to a new low, with only 16 per cent of organizations expressing confidence in the outlook of Ontario’s economy in 2023 (down from 29 per cent in 2022).

• Inflation and labour shortages are primary concerns for organizations.

• Despite low confidence in the economy, 53 percent of businesses are optimistic about the outlook and growth prospects of their own organizations, as high employment rates and population growth should prevent a sharp decline in consumer spending.

• Small businesses want governments to prioritize policies and programs that support their immediate financial and operational challenges, while large businesses are more interested in broader workforce development and health care issues.

• Labour shortages are directly impacting most employers and 87 per cent of large businesses. Shortages are especially acute in education, construction and accommodation and food services.

• Businesses appreciate the importance of employee health and well-being, diversity and inclusion, economic reconciliation and climate action – but there are notable gaps in addressing them.

After experiencing two years of employment growth of 2.4 per cent in 2021 and 3.8 per cent in 2022, employment in our region of Muskoka-Kawarthas is forecasted to grow by only 0.2 per cent next year. For our region, 51 per cent of businesses reported feeling confident in their own organization, 32 per cent were neutral and 13 per cent were not confident. These numbers show an increase in confidence in their own organizations over 2021 when 18 per cent reported not being confident. Despite this optimism, local businesses feel less confident in the Ontario economy than the provincial average.

Locally, our top 10 policy priorities are:

• Invest in broadband internet infrastructure – 50 per cent

• Reduce/simplify business taxes – 44 per cent

• Encourage Ontarians to buy/travel locally – 44 per cent

• Invest in workforce development – 35 per cent

• Address health care system capacity – 34 per cent

• Support businesses with energy costs – 32 per cent

• Strengthen local supply chains, industries, and manufacturing – 31 per cent

• Expand/improve access to mental health and addictions programs and services – 27 per cent

• Enhance access to credit/capital – 25 per cent

• • Support businesses with technology adoption – 22 per cent

“This year’s OER makes it clear that leaders in the public and private sectors must invest strategically in productivity, resilience, and long-term growth,” said Claudia Dessanti, Senior Manager, Policy, OCC. “Unsurprisingly, labour shortages continue to dominate as a source of concern directly impacting most employers and 87 percent of large businesses. Shortages are especially acute in specific sectors such as education, construction, and accommodation and food services.”

The seventh annual OER offers unique insights into business perspectives across Ontario. It is informed by data from the annual Business Confidence Survey (BCS) and economic forecasts for the year ahead. The BCS was conducted online from Oct.18 to Nov. 30 last year, attracting responses from 1,912 organizations across Ontario.

Check out the Ontario Economic Report here.

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Voice of Business: It’s Time to Take a New Look at Getting Goods to Market

When all is running well, supply chains operate largely invisible to consumers.

Most of the time the massive choreographed dance of production, ships, ports, rail, trucks, planes, warehouses, couriers, border crossings, delivery systems, and 820,000 Canadians works relatively seamlessly, moving $1 trillion in goods. Your local business either already has the product you’re after or is able to get it to you in short order.

But all that changed in recent years as the words ‘supply chain’ entered our common lexicon as we talked with businesses, friends, and co-workers. We shared the common frustration of not being able to get the products we want when we want them.

Some of what led to these challenges has largely been resolved, like public health shutdowns and closed borders. Like many things, the pandemic accelerated issues the industry was already facing. Meanwhile, the world changed dramatically.

A report titled ‘A time of renewal for Canada’s supply chains’ from KPMG and the Ontario Chamber of Commerce delves into the challenges facing the industry and how it can get back to invisibly running in the background.

The report notes that current risks for governments and businesses include:

• Chronic underinvestment in supply chain modernization

• Continued risk-laden dependence on single suppliers

• The need to innovate amid soaring goods and services costs

• Evolving and ever-increasing consumer expectations

• Ongoing labour shortages and skills gaps

KPMG’s 2022 Global CEO Survey reveals a total of 55 percent of leaders agreed or strongly agreed that supply chain risks will have an impact on their business over the next three years.

One key area they highlighted is that governments need to collaborate with each other in new ways to reshape supply chain capabilities and mitigate risk in the global digital economy. This includes innovative trade agreements, investments in infrastructure, and the re-orienting of supply chains amid over-reliance on individual nations such as China.

Nearly three quarters of global CEOs agreed that access to capital for new investments in their supply chain is having an impact on their business. The report makes continued references to the need to spend time and money on innovation. Rather than putting band-aids on the current system, we need to take a hard look at new ways to provide consumers with the goods they want.

The industry is moving away from a ‘just-in-time’ to a ‘just-in-case’ mindset. Saving money through single-supplier relationships has made the supply chain rigid, resulting in inefficiency and vulnerability.

The report pushes the need to foster and accelerate digital technology adoption to increase supply chain visibility, become more efficient, manage rising costs, and meet consumer expectations.

There are also issues around people’s expectations. Without some serious investment and innovation, our supply chain is struggling with the flexibility, speed, and reliability necessary to meet the standard that Infinite choice and instant delivery have set.

Like many sectors, the supply chain network is struggling to attract and retain workers with the skills they need. Answers lie in upskilling, reskilling, and automation.

Our economy and the standard of living we have come to enjoy require that the public and private sectors modernize our supply chain through innovation and strategic investments. These issues aren’t going away on their own. The time to invest is now.

Read the full report online.

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Voice of Business: First-in-a-Generation Labour Market Shift Leaves Jobs Vacant

Workers hold a level of bargaining power not seen in a generation as labour shortages are creating pressure on wages, working conditions and benefits. Many employers and employees alike have not encountered a labour market shift like this. Employers will need to continue to be flexible in negotiations in order to fill vacancies.

For the last 40-odd years, employers held the market over employees as inflation rates soared during the 1970s and 1980s and industries found cheaper alternatives through offshoring, especially after China joined the World Trade Organization in 2001. Because of these shifts, workers struggled to find jobs and wages were suppressed as employers held most of the bargaining power. As a result, companies found it easier to hire and retain. That is not the case, however, in today’s working environment.

According to Statistics Canada’s December Labour Survey, more Canadians are working or actively seeking work. The rate of workers aged 15 or older has been rising year-over-year by about 3 per cent, the unemployment rate dropping by 0.1 per cent to 5 per cent, and employment increasing by 0.5 per cent. Regardless of these statistics, more than one-third of Canadian employers are expected to face labour shortage issues in the next few months to years due largely to the rapidly aging working-age population.

As our aging workforce begins to retire, job vacancies in our country are at an all-time high. Despite the trends in our neighbouring country to the south, Canada’s workforce has not seen the same ‘Great Resignation’ trend. More than 1 in 5 workers in Canada are between 55-64 and from 2016 to 2021, the number of those 65 and older increased by 18.3 per cent to 7 million according to another Statistics Canada report. Our labour market shortage isn’t caused by the ‘Great Resignation,’ but rather by the ‘Great Retirement.’

Employers and industries that are struggling to fill vacancies will need to adapt their reopening and rehiring plan to offer more lucrative and competitive wages and benefits. The early pandemic shifted the mindset of workers as mass layoffs and hiring freezes caused many to reevaluate their work and worth. Now, according to this article from Ranstad, these are the top items employees are seeking in the post-pandemic world:

• Flexible work-life

  • Having the ability to set their own schedules

  • 2-3 working from home days

• Recognition and reward

  • Celebrating ‘small wins’ and showing appreciation for the employee

• Opportunity for growth

  • Additional training following years of pandemic working

  • Salary increases

  • Shifting of responsibility

• Resources for remote work

  • Funding or resources provided for home office setups

• Empathetic Leadership

  • Accommodative and supportive leadership with a focus on mental wellbeing

• Safe workspaces

  • PPE and health and wellness programs to keep teams happy

• Workplace culture

  • Collaborative projects

  • Team building initiatives

  • Effective communication

Luckily for employers, there are still tons of options and assistance for hiring and training staff in our increasingly post-pandemic economy and employment agencies across Peterborough and the Kawarthas are eager to help fill voids.

Content provided by the Peterborough and the Kawarthas Chamber of Commerce.

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