Business confidence hits new low, says Ontario Chamber of Commerce survey

Small businesses, more vulnerable to rising costs, were less optimistic about 2023 than large ones, according to a new survey, with the Ontario Chamber of Commerce citing the withdrawal of government COVID-19 support as a key factor.Fred Lum/ The Globe and Post

Just 16 percent of Ontario businesses say they have confidence in the year ahead, according to a new poll that cites concerns not only about inflation, labor shortages and a possible recession, but also about the state of the province’s healthcare system.

The Ontario Chamber of Commerce says the result is the “most pessimistic outlook” it’s seen since it began tracking business confidence in the broader economy in its annual survey a decade ago. The most recent data includes responses from 1,912 OCC members, including businesses and nonprofits, and was conducted October 18 through November 30.

The number of companies expressing confidence has fallen sharply from the comparable figure the group released 12 months ago. At the time, 29 percent of companies expressed optimism about the year ahead as COVID-19 restrictions were eased in fall 2021, only to be later derailed by the launch of the more transmissible Omicron variant.

The statistics are part of the OCC’s annual economic report, due to be released on Tuesday. It forecast a slowdown that began before the Bank of Canada began raising interest rates last year and says Ontario’s gross domestic product will shrink 0.4 percent in 2023. Unemployment will also rise, according to figures from the Bank of Montreal. And housing starts — a key Ontario government goal — will fall by 22 percent.

All of this contrasts with recent talking points from Ontario’s progressive Conservative government. Premier Doug Ford regularly points to labor shortages as a by-product of his administration’s economic success, pointing to $7 billion a year in taxes and fees he has cut to make the province more attractive for investment.

Most of the reasons for the bad mood among companies are obvious: 78 percent cite the rising cost of living as their main concern, and 64 percent cite labor shortages. However, 46 percent said they were also concerned about Ontario’s healthcare system, which is struggling with staff shortages, emergency room closures and longer wait times for patients

The provincial government recently announced a plan to use more private clinics for publicly funded surgeries, and the chief ministers and prime minister are meeting on Tuesday to negotiate a new healthcare funding deal.

Claudia Dessanti, senior manager of policy at the OCC, said defining healthcare would help build business confidence, adding that it will be a key item on the chamber’s agenda at meetings with the province.

“It used to not necessarily be a big business issue,” she said in an interview, adding that health care was obviously a concern for many at the height of the pandemic. “From this report and survey alone, it is clear that addressing capacity bottlenecks must be a top priority.”

The Ontario government has been briefed on the report and Economic Development Secretary Vic Fedeli is expected to comment remotely upon its release. In an email statement, Mr Fedeli said the government will continue to listen to business owners.

“As we navigate global economic uncertainty, we know there is more work to be done,” he said.

According to the survey, small businesses, which are more vulnerable to rising costs, were less optimistic about 2023 than large ones, with the OCC citing the withdrawal of government COVID-19 support as a key factor. Only 14 percent of companies with fewer than 99 employees stated that they were confident about the coming year.

However, as is often the case with this survey, the OCC says many companies are still confident in their own ability to succeed, despite a lack of optimism overall: 53 percent said they were confident in their own organizations, if not theirs of Ontario, Prospects for 2023.

The survey also asked respondents about paid sick leave, a point of contention for the government amid the pandemic. According to the survey, 64 percent of respondents offer paid sick leave. But sick days were less common in smaller companies and in certain sectors including food, housing, transport and warehousing. Ontario’s three temporary government-covered sick days expire in March, and the OCC warns that the Ford government should consult with affected companies about changes, such as: B. the transfer of the costs of these sick days to employers.

Regarding climate change, the survey shows that two-thirds of organizations agree that sustainability or climate change mitigation is a priority, but only 52 percent said they feel ready to meet environmental or emissions reduction targets.

Source: www.theglobeandmail.com