Ontario businesses hopeful about own future but not the province’s economy

Allan O'Dette, President and CEO of the Ontario Chamber of Commerce, seen here in August, said on Feb. 7, "Diminished profitability, lower labour market participation, and sluggish market activity … have resulted in a risk-averse atmosphere."

Businesses are not confident about the province’s economy despite optimism about their own individual future, the Ontario Chamber of Commerce has found.

In its annual report released Tuesday at Queen’s Park, the business lobby notes there is a “confidence gap between our members’ organizational and provincial economic outlooks.”

“Our business confidence survey revealed that Ontario businesses continue to be cautiously optimistic about their own organizations’ economic future, but less so about that of the province,” said Allan O’Dette, president and CEO of the chamber, which represents 60,000 members.

“This perception is bolstered by the results of the new business prosperity index, which suggest vulnerabilities in the economy,” said O’Dette.

“Despite projections that Ontario will lead Canada in economic growth in the coming years, diminished profitability, lower labour market participation, and sluggish market activity … have resulted in a risk-averse atmosphere in which businesses are disinclined to grow production.”

Indeed, only 24 per cent of chamber members surveyed last fall are “confident” in the province’s economic outlook.

At the same time, 41 per cent of those polled were “not confident,” 34 per cent were neutral, and 1 per cent didn’t know.

However, 62 per cent of members were bullish about their own organization’s prospects with just 12 per cent responding that they were “not confident,” 25 per cent neutral, and 1 per cent unsure.

That’s according to an online poll of 773 members conducted by Fresh Intelligence between last Oct. 25 and Nov. 30.

“If OCC members are largely optimistic about their own organization’s economic outlook, why are they so pessimistic about that of the province? One reason is direction and governance: only a minority of OCC members believe that a number of major government policies and initiatives will have a positive impact on their organization,” the 42-page report stated.

“Ontario business is in a delicate position: OCC members are unsure of the stability of the wider provincial economy and critical of the impact government policy will have on their organization,” it continued.

“A number of day-to-day challenges, particularly hiring and electricity costs, are directly impacting their ability to invest and grow. Without an environment that allows business to act on their organizational confidence, broader confidence in the economy will be slow to arrive.”

The chamber’s findings come as Ontario’s political leaders are already beginning to gear up for a provincial election on June 7, 2018.

Premier Kathleen Wynne acknowledged there is a “contradiction” between individual businesses’ feelings and their overall outlook.

“As businesses thrive, Ontario thrives; jobs are created. Ontario is leading economic growth in the country this year,” Wynne said at Sunnybrook Hospital.

“Our unemployment rate has been below the national average for … 20 months in a row. It’s not as even as we would like it to be (across the province), but we are working on exactly the things that that the Ontario Chamber of Commerce has identified.”