In its Ontario Economic Report, the Ontario Chamber of Commerce outlines the difficult economic environment to be faced by businesses and consumers in 2017.
“Our research shows that Ontario’s economic climate is posing challenges to the businesses we represent and Ontarians more broadly,” said Ontario chamber president Allan O’Dette in a Feb. 7 news release. “Investment is being held back because of a high perception of risk. We need immediate action in order for our province to continue to grow and prosper.”
The chamber reports that while total business prosperity has increased since 2000, prosperity is being generated from asset and liability management rather than the production of goods or services.
Ontario enjoyed an average 2.6 percent real GDP growth rate between 2000 and 2006, but wealth generated from goods and services production actually declined by 12 percent during that same period.
Since the 2008 recession, production activities have fallen a further 12 percent. The chamber claims this means Ontario’s business prosperity is increasingly dependent upon non-production, financial activities.
Increased costs associated with production, regulation and housing have resulted in weak market and labour force activity. Businesses are operating in a risk-averse environment in which they are disinclined to grow production by investing or hiring.
“For many years, the voice of Ontario business has cautioned that regulatory burdens, high input costs, and government policies not attuned to innovation have hampered economic growth,” said O’Dette. “The findings in the OER reinforce this, and indicate that there are also structural issues impeding our province’s potential.”