According to a new survey, small businesses, more vulnerable to rising costs, were less likely to feel optimistic about 2023 than large ones, with the Ontario Chamber of Commerce citing the withdrawal of government COVID-19 supports as a key factor.Fred Lum/The Globe and Mail
Just 16 per cent of Ontario businesses say they have confidence in the year ahead, according to a new survey that cites their concerns about not just inflation, labour shortages and a possible recession, but also the state of the province’s health care system.
The Ontario Chamber of Commerce says the result is the “most pessimistic outlook” it has seen since it started tracking business confidence in the overall economy in its annual survey a decade ago. The latest data come from the responses from 1,912 OCC members, including businesses and non-profits. The survey was conducted from Oct. 18 to Nov. 30.
The number of businesses expressing confidence is down sharply from the comparable figure the group released 12 months ago. Back then, 29 per cent of businesses expressed confidence in the year ahead, as COVID-19 restrictions eased in the fall of 2021 only to be later derailed by the arrival of the more-transmissible Omicron variant.
The statistics are part of the OCC’s annual economic report, which is set for release Tuesday. It predicts a slowdown, which began even before the Bank of Canada began raising interest rates last year, and says Ontario’s gross domestic product will shrink by 0.4 per cent in 2023. Unemployment will also rise, it says, citing Bank of Montreal numbers. And housing starts – a key goal for Ontario’s government – will sink 22 per cent.
It all contrasts with the recent talking points of Ontario’s Progressive Conservative government. Premier Doug Ford routinely points to labour shortages as a byproduct of his government’s economic success, pointing to what he says are $7-billion a year in taxes and fees he has cut to make the province more attractive to investment.
Most of the reasons for the sour mood among businesses are obvious: 78 per cent point to the rising cost of living as their prime worry, and 64 per cent cite labour shortages. However, 46 per cent said they were also concerned with Ontario’s health care system, which has struggled with staff shortages, emergency-room closings and increased wait times for patients
The provincial government recently announced a plan to use more private clinics for publicly funded surgeries, and the premiers and the Prime Minister are meeting Tuesday to hash out a new health care funding deal.
Claudia Dessanti, senior manager of policy at the OCC, said fixing health care would help boost business confidence and added that it will be a key item on the chamber’s agenda in meetings with the province.
“Previously, it wasn’t a big business issue necessarily,” she said in an interview, adding that health care was obviously a concern for many at the height of the pandemic. “Just from this report and this survey, it’s clear that addressing the capacity shortfalls needs to be a top priority.”
The Ontario government has been briefed on the report, and Economic Development Minister Vic Fedeli is expected to provide remarks remotely at its release. In an e-mailed statement, Mr. Fedeli said the government will continue to listen to business owners.
“As we navigate global economic uncertainty, we know there’s more to do,” he said.
According to the survey, small businesses, more vulnerable to rising costs, were less likely to feel optimistic about 2023 than large ones, with the OCC citing the withdrawal of government COVID-19 supports as a key factor. Only 14 per cent of business with fewer than 99 employees said they felt confident about the coming year.
However, as is often the case with this survey, the OCC says many businesses still feel confident in their own ability to succeed, despite a lack of optimism overall: 53 per cent said they were confident in their own organizations, if not in Ontario’s, prospects for 2023.
The survey also asked respondents about paid sick days, a point of contention for the government in the pandemic. The survey says 64 per cent of respondents offer paid sick leave. But sick days were less common in smaller businesses and in certain sectors, including food, accommodation, transportation and warehousing. Ontario’s three temporary, government-covered sick days are due to expire in March, and the OCC warns that the Ford government should consult with affected businesses about any changes, such as transferring the cost of these sick days to employers.
On climate change, the survey showed two-thirds of organizations agreeing that sustainability or climate action is a priority, but only 52 per cent said they feel prepared to achieve environmental or emissions-reductions goals.