Ontario Chamber of Commerce report says businesses 'lack confidence' in economy

A new report from the Ontario Chamber of Commerce (OCC) paints a gloomy picture of the Ontario economy, arguing that businesses are increasingly "risk-averse" and afraid to reinvest their money.

The 2017 Ontario Economic Report, the first of its kind from the OCC, polled the chamber's members about how well they are doing and how they perceive the economic landscape around them.

It found that though about 60 per cent of members are confident in their own organization, only a quarter feel confident about Ontario's economic outlook.

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"There's more prosperity — liquid assets — than there has been in the last decade or so," said OCC vice-president of policy and government relations Karl Baldauf. "But [businesses] are not investing it because they are concerned about the state of the Ontario economy."

Speaking on CBC Radio's Metro Morning, Baldauf explained that a protracted period of slow growth was contributing to what he described as a "general malaise."

"We all thought that by now we'd be moving beyond that two per cent growth that we've [been] experiencing. But we're not."

Baldauf ran through a number of other reasons why businesses aren't feeling confident, among them the uncertainty of a "transitional" economy.

"We know we want to get to more of a technology-driven, knowledge-based economy, but it's not happening as quickly as many had hoped, and because of that uncertainty that exists, businesses are holding on to their capital," he said. 

Meanwhile, he said, those same businesses are paying more and more for "input costs" like electricity.

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"The experience that many households have with the rising electricity rates — they are amplified for many businesses." 

Baldauf also noted that political changes, such as the recent boost to the Canada Pension Plan, take their toll because they create a "cycle of uncertainty" in which businesses are less likely to hire new people.

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The OCC report mentions three possible avenues for turning around the "diminished profitability" and "sluggish market activity" they found.

First, Baldauf said that Ontario needs to focus on the problem of "jobs without people" through education and skills training. Second, he said, there needs to be more investment in infrastructure.

The third policy avenue identified by the OCC is healthcare, which Baldauf says needs a boost from the province. 

"There is not enough investment happening by our public health care system into Ontario's innovative health care solutions," he explained.