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The high cost of living, inflation, housing affordability, and rising operational costs top the lists of concerns for Ontario businesses, according to the Ontario Chamber of Commerce’s (OCC) most recent Ontario Economic Report (OER). 

The report shows a significant rise in business confidence over the course of 2024, climbing from a historic low of 13% to 26% by year’s end. Despite this improvement, confidence remains historically low and fragile, with 48% of businesses expressing a lack of confidence in the economy. Affordability and the cost of living continue to be the most pressing concerns for businesses.

The survey, conducted between October 15 and December 2, 2024, gathered insights from 1,714 respondents representing a diverse range of industries, regions, and organizations.

The results show that when U.S. tariff threats are on the table, business confidence drops dramatically to just 15%, almost erasing the last year’s gains, according to the OCC’s separate tariff survey in early February. This recent research also shows that with tariffs in play, six in ten (60%) business decision makers would lack confidence in Ontario’s economic outlook.

“I may not use the word fragile describing the confidence level and instead use the word tempered,” says Cambridge Chamber of Commerce President and CEO Greg Durocher. “People's optimism for the future of business in the short term is tempered by the impact of Trump’s tariffs. I think most people in business realize that the impact of any decision is probably going to be short term. Whether or not tariffs are long term isn't the issue, it’s the impact of tariffs. So, after a period time, the marketplace settles down and people get used to whatever is the new reality.”

Ontario’s economic outlook varies

Confidence in Ontario’s economic outlook varies significantly across industries, with the information and cultural industries sector reporting the lowest level of optimism at just 17%.  Businesses in this sector cite high operational costs, shifting consumer behaviour, declining advertising revenues, and mounting pressures from technological disruption, global competition, and regulatory challenges as key drivers of their pessimism.

The retail (18%), non-profit (20%), utilities (21%), and accommodation and food services (22%) sectors follow closely, reflecting the impact of declining consumer spending amid heightened cost-of-living pressures.

The agriculture sector, while showing a slight improvement over last year, also remains among the least confident sectors (22%). Concerns in this sector centre on extreme weather events, trade and supply chain barriers, and growing labour gaps and succession planning challenges as a significant portion of the workforce approaches retirement.

By contrast, confidence is strongest in the mining (56%), finance and insurance (40%), and administrative and waste management services (40%) sectors. This could be explained by the strong demand for critical minerals supported by Ontario’s Critical Minerals Strategy, rising sustainability initiatives the finance sector’s ongoing resilience, and growth driven by fintech advancements. These sectors demonstrate adaptability and the ability to capitalize on emerging opportunities.

Survey respondents remain optimistic

Regionally, most of Ontario’s regions outside the GTA saw a significant reduction in confidence compared to the previous year.

Confidence is lowest in Stratford-Bruce Peninsula (19%), Northeast Ontario (21%), and the Greater Ottawa Area (21%), where in addition to concerns surrounding high costs and housing affordability, businesses are disproportionately sensitive to government policies and investments and have suffered more extreme weather events than other regions.

Confidence is highest in the Greater London Area (34%), a significant rebound from last year (9%). This resurgence is likely fueled by strong consumer demand, and domestic manufacturing capacity and supply chains, including the announcement of the Volkswagen EV battery plant in St. Thomas.

Despite the challenges, respondents report relative optimism about their own business growth prospects. Nearly half (49%) express confidence in their own future, citing factors such as strong consumer demand, innovation, and improved inflation management, something that doesn’t surprise Greg.

“I think that you'll find that there's going to be a growth and optimism because many sectors in Canada are going to strengthen as a result,” he says. “We’ve never been the ‘buy Canadian’ kind of a nation and the U.S. has always had buy American programs in place because we’ve always understood we were a player in the global market.”

He says there are initiatives created by the Provincial and Federal governments to encourage Canadian businesses to look at other, more reliable markets, rather than depending on the American market.

European Union agreement key

“Why we perceive the U.S. market to be unreliable right now is because anything that the American government does that impacts the trade with their nation is exponential in our case because 80 per cent of our GDP goes to the United States,” says Greg. “So, we're vulnerable to every whim of the U.S. government. For us to get more reliable sources, we need to diversify so we need to have relationships in the European Union.”

He notes the Canada-European Union Comprehensive Economic and Trade Agreement, which Canada signed in the fall of 2016, has been underutilized. 

“I think it stands to reason that we have not served ourselves well by not really looking seriously at the European Union for economic trade,” says Greg, noting this happened primarily because of our expectation the U.S. would always remain a reliable trading partner.

“We need to understand what the reality of this is going to be going forward and whether we do get aggressive when it comes to find other trading partners.  And if Canadians continue to buy Canadian that will really impact the U.S. exponentially because we do consume a lot of American products.”

Click here to read the report.

Report highlights: 

• Business confidence in Ontario’s economy has doubled in the past year, rising from 13% to 26%, but a majority of respondents (48%) lack confidence in the economy. 
• High costs remain the top concern for businesses, with 78% citing the cost of living, followed by inflation (62%), housing affordability (57%), and rising operational costs (51%).
• Simplifying or reducing business taxes (42%) is the most frequently cited policy solution to improve economic conditions, followed by affordable housing (32%), health system capacity (30%) and workforce development to solve labour shortages (29%).
• While businesses recognize the economic importance of technology adoption, environmental sustainability, diversity and inclusion and Indigenous reconciliation, businesses report a need for support and guidance in seizing these opportunities.
• Businesses report being ill-equipped to support workers and communities through mental health and addictions challenges. For example, while 71% of businesses recognize the importance of mental health and well-being to their success, only 41% have formal mental health strategies.
• Business leaders are confident in their ability to adapt to ongoing trade tensions between the U.S. and Canada with nearly half (48%) reporting confidence, while 32% are neutral and only 15% expressing a lack of confidence. 
• Ontario’s post-pandemic recovery faces significant headwinds, including potential U.S. tariff threats, geopolitical instability, lagging productivity, affordability challenges, and rising unemployment.

While the recent 30-day postponement of U.S. President Donald Trump’s tariffs and Canada’s retaliatory measures came as welcomed news to businesses, the lingering presence of these threats remain prompting the Chamber network to act using a variety of tactics, including advocacy, negotiation, education and promoting partnerships.

Trump’s demand for 25 per cent blanket tariffs on all Canadian goods, with the exception of a 10 per cent tariff on Canadian energy, and Canada’s proposed retaliatory tariffs on $155 billion of U.S. goods, has sent economic shockwaves through both nations prompting calls for action on both sides of the border.

To clearly map out the vital importance of the trading relationship between the two countries and the risks businesses face, the Canadian Chamber of Commerce’s Business Data Lab has introduced the Canada-U.S. Trade Tracker —a new tool designed to illustrate the ties between the two economies. It notes that $3.6 billion in goods crosses the Canada-U.S. border daily, generating a $1.3 trillion annual trade relationship.

"A 30-day delay means more time for Canadian businesses and governments to drive home the point that tariffs make no sense between the two closest allies the world has ever known,” said Candace Laing, President and CEO, Canadian Chamber of Commerce, in a release. “The Canadian Chamber, our network and businesses across the country will spend every day of it fighting hard to secure this historic, robust trading relationship. Raising the cost of living for Americans and Canadians with these taxes is the wrong move. Canada and the U.S. make things together, and we should in fact be building on that.”

Call to dismantle interprovincial trade barriers

It is a sentiment echoed by her colleagues at the Ontario Chamber of Commerce who have rallied their members, which includes the Cambridge Chamber, in a show of unity and strength and targeted actions including supporting a unified call for Canadian premiers to quickly dismantle interprovincial trade barriers and the creation of a business and trade leadership coalition.

Called the Ontario Business & Trade Leadership Coalition (OBTLC), it aims to unit leaders from key trade-dependent sectors to champion business-driven solutions, advocate for effective government policies, and solidify Ontario’s position as a global leader in trade.

“President Trump has claimed the U.S. doesn’t need Canada – but we are here to show just how invaluable we are. Ontario businesses are stepping up to safeguard our economy and reinforce our global competitiveness,” said Daniel Tisch, President and CEO of the Ontario Chamber of Commerce, in a release. “The Ontario Business & Trade Leadership Coalition represents a united response – a coalition of industry leaders committed to resilience, collaboration, and growth.”

BestWR brings business groups together

But the fight to ward off economic turmoil caused by these tariff threats has also been ramped up locally, says Cambridge Chamber of Commerce President and CEO Greg Durocher, through the revival of a unique partnership created during the pandemic to assist businesses.

“We created the Business Economic Support Team of Waterloo Region (BestWR) during COIVD-19 consisting of organizations that are fundamentally engaged in the economic activities through business in the region and have brought it back as a support mechanism for local businesses with respect to trade,” he explains. “It was created during the pandemic, but this is now really about a united force of business organizations helping local businesses navigate these turbulent trade waters.”

Besides the Cambridge and Greater Kitchener Waterloo Chambers, BestWR also includes Waterloo EDC, Communitech and Explore Waterloo Region.

“We are engaged right now with regional municipalities to create opportunities whereby we can offer a support role in helping local businesses find local or Canadian suppliers, or to expose local businesses to the products they currently manufacture or sell and may be able to find Canadian customers for,” says Greg, noting BestWR also has strong federal and provincial connections which they will use to assist businesses.

“We have the insight to be able to tap into key levers within provincial government and within the federal government to have input on what potential supports those governments may need to provide businesses to keep them moving through this turmoil.”

Ask the Expert returns

As a further measure to assist, both the Cambridge and KW Chambers have revived their online tool 'Ask the Expert'.

These weekly Zoom calls - created during the pandemic to provide business leaders with current information – will now provide an opportunity for manufacturers and businesses in the region who export to the U.S. to ask questions.

“We will invite various experts to take part in the one-hour call, and hopefully get some answers to their questions and help them keep their business humming along and doing the things they need to do to support their employees,” says Greg.

'Ask the Expert' will take place every Thursday, between 9-10 a.m.

“This all about businesses,” he says. “And how do we navigate the turbulent challenges ahead and make it a win for Canadian businesses.”

The Chambers have also revamped the chambercheck website (which offered timely resources for businesses during the pandemic) to provide a growing list of trade-related resources to inform and assist businesses.

Reasons for businesses to remain confident and optimistic:

Economic Resilience

Canadian businesses have demonstrated remarkable resilience in the face of past economic challenges. Our diverse economy and strong trade relationships beyond the United States provide a buffer against potential disruptions.

United Response

The Canadian government, provincial leaders, and business organizations like your local Chamber of Commerce are presenting a united front in response to this threat. This co-ordinated approach strengthens our negotiating position and demonstrates our commitment to protecting Canadian interests.

Potential for Internal Growth

For years the Chamber network has been encouraging the government of Canada to remove interprovincial trade barriers and unlock the economic prosperity lying dormant in these archaic policies. This situation presents an opportunity to address long-standing interprovincial trade barriers and by removing them boost Canada's economy by up to $200 billion per year, potentially offsetting the impact of U.S. tariffs.

Mutual Economic Interests

It's important to remember that the proposed tariffs would also significantly harm the U.S. economy. American businesses and consumers would face higher costs and reduced competitiveness, which could lead to pressure on the U.S. administration to reconsider this approach. 

Time for Preparation

With the proposed tariffs not set to take effect until at least March 1, there is time for diplomatic efforts and for businesses to prepare contingency plans as we work our business contacts and channels to influence key stakeholders in the U.S.

Leveraging Canadian Assets

Canada continues to highlight its valuable assets that are strategically important to the U.S., including:

• Energy resources
• Critical minerals
• Nuclear power capabilities
• AI research excellence
• Lumber and building materials
• Automotive
• Agriculture

By emphasizing these assets, Canada is demonstrating that doing business with us is not just beneficial but strategically smarter than alternatives.

Government Support

The Canadian government has a track record of supporting businesses during trade disputes. We can expect measures to be put in place to assist affected industries if the tariffs are implemented.

The pandemic has created many new shifts, especially when it comes to how millions of Canadians now spend a typical workday.

Even before this latest provincial stay-at-home order took effect April 8 requiring all those who can work from home to stay there, a recent Labour Force Survey indicated that 3.1 million Canadians were already working from home temporarily due to COVID-19 as of February 2021.

And for those working in their home office - which can translate into a spare room, the kitchen table or even the couch- trying to stay healthy can be difficult, especially when it comes to nourishment and physical activity.

“I think some people are working extra hard at home. They’re not having separation of home and work and don’t stop to eat, so they’re not nourishing themselves as well as they should be,” says Janet Jacks, founder of the highly successful Ontario-based organic food and supplement retailer Goodness Me! Natural Food Market. “And other people, because the food is nearby and there are little breaks, they go and grab something and are snacking a lot.”

Janet says there has been a shift from the when the pandemic began, and Ontario went into its first lockdown in March of last year.

“In the beginning, people were so anxious to eat well and improve. I really sense that people took an interest in eating better food,” she says, noting the popularity of the home baking trend last year. “But I feel like people are tired and although in their mind they know they want to eat better; they just feel like it’s not always easy.”

Shane Gray, owner of Rio Nectar Eatery in Cambridge and Guelph, agrees and says many people are even busier at home, whether with work or new hobbies, so eating healthy doesn’t appear to be an option.

“People are still grabbing fast food and choosing less healthy options because I’m also finding we’re getting fatigued quicker,” he says, adding the pandemic has left many feeling unbalanced. “As human beings, we need balance and we’re all off balance right now.”

That’s why scheduling is so important, says Ashley Viljoen, Regional Manager for Anytime Fitness.

“First and foremost, the best advice I can give someone is stick to a schedule just like you would on a workday,” he says. “If you normally work to 9 to 5, make sure you work 9 to 5. If you used to go to the gym from 5:30 p.m. to 6:30 p.m., still make the time to get out and exercise and be active during that time.”

To ensure its members remain connected, Anytime Fitness has been offering online coaching to encourage them to keep up with their routines and stay in the best physical shape they can be, especially with the threat of COVID-19 variances. 

“We have a team of coaches that look after them and provide them with online workouts,” says Ashley, explaining it was something the company was looking at prior to the pandemic and expects will continue. “We’re trying to find a market that’s going to accommodate everyone at the end of the day.”

He says working out a home doesn’t require a great deal of equipment or space.

“You don’t need a whole apartment to enable you to do a workout,” says Ashely, noting even canvas shopping bags and water bottles or cans that can be adjusted for weight can work for an ‘at home’ training session. “All our workouts that we’ve based it on have been based on functional body weights and exercises.”

Staying active, says Shane, who is a parttime paramedic and fitness enthusiast, is vital and urges people to get out of their home office and move around.

“Go for a quick walk, do something,” he says. “It’s not just important for your physical health but overall mental health.”

But when it comes to eating, Shane suggests prepping meals ahead of time using non-processed meats like chicken or beef that can be quickly heated up is a great option during a busy workday.

“Most meals when you prep them can sit for about three days in the fridge, so now you’ve got something there you can throw in the microwave and eat,” he says, adding eating ‘clean food’ is important for a healthy lifestyle.

Janet, who opened her first store in 1981, couldn’t agree more and says eating healthy will manifest itself into being more productive at work.

“If we could feel more energetic and feel like we’re sleeping better and have more energy for other things it is more self-motivating,” she says, noting the staff at Goodness Me! can offer some great nutritional advice.

10 pieces of advice from Janet Jacks regarding healthier eating while working at home:

1. Create a hydration plan.

“When we are thirsty, we tend to sometimes misinterpret that as hunger and we’re eating when our body is really saying please drink something.”  She recommends keeping a container of green tea or ginger tea, or even lemon water around. Also, if water is too ‘boring’ try throwing in some cucumber slices. She says ginger tea is especially cleansing and very detoxifying. “Whatever it might be, we need a plan to keep us hydrated because will be more clear-minded and have more energy and our body will work better.”

2. Watch what you put in your grocery cart.

“When you’re shopping, stock up on real food options, use fresh whole foods.” This includes things like raw cheeses, avocados, nuts, olives, easy vegetables, Bok choy, naturally fermented pickles, tuna and salmon. She recommends sauteing some Bok choy or cabbage in a frying pan for a few minutes and enjoying it with a plate of vegetables is a quick and easy lunch.

3. Plan for leftovers.

“Some people are great at using leftovers, and others will see them languish at the back of the fridge and they will end up being thrown out. I think you should even plan for it.” She says leftovers quite often are good for one person, which is great for lunch. She suggests cooking some hearty crockpot or Instant Pot meals that will provide leftovers. Or at dinner, she says cook extra vegetables so you will have some left for lunch the next day. “You can eat these things cold and they are very good, or you could warm them up quickly.”

4. Keep boiled eggs handy.

“Just have some in a bowl in the fridge. They’re so hearty and so healthy. All you need is a little bit of salt and you’re good to go. They’re great for snacking or lunch.” Also, she says they provide a great source of protein.

5. Make or buy soup.

“I know we’re coming into warmer weather, but a pot of soup is like planned leftovers. Having a big pot of soup in the fridge actually improves with sitting and you can just take out what you need. It’s so fast and hearty. What’s not to like?”

6. Each meal should have balance.

“Every time you eat, try to avoid grabbing a cookie and think about I need protein and fat and some kind of vegetable. If I’m going to eat a cookie, it could for dessert as part of that meal.” She refers to this thinking as foundational nutrition and says meal portions are not as important as balance.

7. Utilize flexible hours.

“We have these flexible hours which are a great way to try intermittent fasting. It can be a very healthy mechanism. You eat your meals within a more compact window, rather than spread out.” She compares this to the way farmers eat breakfast after they finish their morning chores, suggesting people who work at home could eat their first meal later in the morning after they start work leaving only a few hours before they consume dinner. As a result, she says if they don’t snack in the evening, they could wind up with at least 10 hours or more between their next meal. “That way you give your body more chance to use what you’ve eaten and process everything. Often people feel better when they do this.”

8. When you eat, just eat.

Janet says taking the time while eating to stop and savour your food, is important for digestion.

“You allow your digestion to have more power. Take a breath and enjoy the colours and the flavours of your food. Sometimes we eat and don’t even know what we just ate.”

9. Focus on food with a function.

“Food should taste delicious, but also have a function in the body. Think about food as nourishment that lowers stress or builds immunity, or soothes and restores and rebuilds your digestive system, or keeps inflammation at bay because that’s the root of disease.” She says knowing what foods can help your body is important. “When you’re shopping, rethink food. Respect food and while eating it, think this is taking care of my body while I’m enjoying it.”

10. Remember and recall.

“Quality food speaks volumes, and you can feel the difference.”

For more information or tips, visit https://goodnessme.ca, https://rionectar.ca and https://anytimefitness.com