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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.

Debating policies to create evidence-based solutions that will benefit the business community and province’s economic growth played an important role at the Ontario Chamber of Commerce’s recent 2024 Annual General Meeting and Convention in Timmins.

Approximately 100 delegates representing Chambers provincewide made the trek north, including Cambridge Chamber of Commerce President and CEO Greg Durocher and incoming Board Chair Murray Smith.

“Ensuring businesses have the legislative backing and supports they need to succeed and prosper is at the core of what Chambers and Boards of Trade do and the policies approved at this event assists our network in creating a roadmap to make that happen,” says Greg. “The conference also provides a great opportunity to connect with other Chamber leaders and share ideas and best practices.”

This year, 28 policies were approved by the delegates covering a wide variety of issues that can directly affect businesses including labour, education, healthcare, transportation, infrastructure, manufacturing, and housing.  These policies now become entrenched in the Ontario Chamber of Commerce’s policy ‘play book’ to guide its ongoing advocacy work at Queen’s Park.

The AGM, held April 25-27 and referred to as A Northern Experience, featured sessions related to the creation of a more prosperous business climate for success in Ontario’s north surrounding labour and supply chain issues touching on the needs of the growing EV market in the southern part of the province. Guest speakers included Minister of Mines the Hon. George Pirie, plus representatives from the mining and renewable energy sectors.

Another session focused on the OCC’s Economic Reconciliation Initiative, created in partnership with the Canadian Council for Aboriginal Business, and provided delegates the opportunity to share challenges and opportunities with OCC representatives that they have regarding building relationships with Indigenous Peoples and businesses in their communities.

The OCC will now review their findings and report back to the Ontario Chamber Network with feedback and potential solutions.

Economic growth imperative

The need to create economic growth was at the heart of a video message shared with delegates from Canadian Chamber of Commerce President & CEO Perrin Beatty, who urged the government to modernize its regulatory framework.

“Requiring federal regulators to apply an economic and competitive lens would encourage manageable regulations and reduce the interprovincial trade barriers affecting over 1/3 of Canadian businesses,” he said, adding doing this would ‘fortify’ Canada’s economic foundation. “Modernizing our regulatory framework would cost the government little or nothing at a time when Canadians and businesses from coast to coast are struggling with affordability. The government should be looking to relieve financial burdens wherever possible.”

Beatty also stressed the need for strategic and long-term investment in infrastructure to create a “resilient network” of gateways and corridors. 

“As the world increasingly needs what Canada can provide, it’s critical that Canadian businesses are able to get their goods and services to market reliably,” he said. “If we have learned anything from 2023 is that supply chains are only as strong as their weakest link.”

As well, Beatty also called on the need for the government to provide financial supports, like the CEBA (Canada Emergency Business Account) program during the pandemic, that require more tailored, strategic, and innovative solutions.

“The issue isn’t about how to bail out small businesses but how to build them out,” he said, adding collaboration between the Canadian and Ontario Chambers of Commerce, as well as local Chambers, is needed to make change happen. “The work of the Canadian and Ontario Chambers, and the rest of the Chamber network has never been more important than it is today. Canada has never more greatly needed what we as a network of Chambers can offer.”

Click here to see the OCC Policy Compendium.

Cambridge Chamber policies approved by Ontario delegates

The AGM provides an opportunity for Chamber leaders to come together to discuss and debate key policies that shape the Ontario Chamber of Commerce’s (OCC) advocacy agenda for the coming year. The Cambridge Chamber presented three policies which received overwhelming support from delegates:

• The first policy calls for the Province, in consultation with municipalities, police boards, and businesses communities, to use economic analysis principles when it comes to current and potential crime diversion programs that could reduce crime and in turn make it safer for businesses to operate. As well, the policy recommends that underperforming programs that don’t adequately serve communities of all types be identified and that funding be prioritized accordingly, and that the efficacy of these programs be evaluated in the context of other wrap-around services available in each community. Also, the policy calls for the implementation of a system to measure the long-term impacts of these program investments and insists municipalities continue to use Special Constables in urban areas instead of fully sworn officers to reduce tax burdens.
• The second policy, which the Cambridge Chamber co-sponsored,calls for the establishment of timelines for the Province’s new Building Ontario Fund (formerly the Ontario Infrastructure Bank) to commence investments into projects. It also calls for a strategy put in place to ensure these investments in major projects are in municipalities and regions across Ontario.
• The third policy, which the Cambridge Chamber co-sponsored, recommends the Province initiate a major review of provincial-municipal fiscal arrangements to ensure cost-effective program delivery and maintenance/expansion of infrastructure.

The weight of responsibility can be overwhelming for business leaders.

They are constantly under pressure to drive growth, manage teams, make critical decisions, and ensure their organizations’ long-term success, which is something Debra Burke, Head of Client Success at H2R Business Solutions says has only been magnified in the recent years.

“Since the pandemic, some things have really changed. They changed during the pandemic and somewhat again since then,” she says, referring to a rise in negative conflicts which can lead to a toxic environment and even workplace investigations. 

“We’re seeing an unbelievable amount of those kinds of problems coming into play in organizations and have leaders coming to us because they’ve never had to deal with them before but are dealing with them much more often.”

She says employees have become more empowered with information, and that many are dealing with mental health issues and feeling ‘angry’.

“They may not be working with the same expectations in their jobs that they used to and for some people, there are more challenges as they deal with downsizing, and shifts,” says Debra, adding bigger workloads, and hybrid work situations could be adding to these stresses since they may no longer ‘align’ with what an employee wants.

As a result, she says many leaders are now seeing more employees who are willing to take employers to court, or a human rights tribunal, or filing a report with the Ministry of Labour.

“Leaders who may never really had many people issues to deal with are now finding they are faced with all kinds of these things just to keep the business going,” says Debra. 

She says the challenges can vary between the several generations of employees that are now in the workplace, noting there are still many benefits of having a multi-generational workforce despite potential issues.

Leadership can be isolating

“For a leader, becoming someone who has to manage all these things that come to play and the nuances and potential conflicts, plus the lack of time and resources, it’s very challenging,” says Debra. “When someone says being a leader can be a very isolating place, they are not wrong.”

She says leaders must first watch for warning signs and realize they don’t have all the answers.

As the demands of leadership continue to mount, it is vital for leaders to discover effective strategies to ease their burden and navigate their roles successfully, which Debra says can start with better communication.

“As a leader, you have to get comfortable with communicating. Employees want messaging and they want to hear it from the owner, CEO, or an executive,” she says, adding that a communication breakdown is often the key cause of any conflict, and that lack of management training could be the root cause. “When you do a job well and get promoted to management, that doesn’t necessarily mean you’re going to be a good people manager.”

As well, Debra says leaders can benefit from expert support from others who may have experienced the same issues they are facing, even those outside of a leader’s particular industry.

“I’m not a big fan of coaching for your own industry. You can receive a lot of benefits from working with a diverse support group,” she says. “Even if you feel like you’re an introvert CEO or leader, you might be really surprised how much that support is going to mean to you.”

And while some companies and industries are dealing with tight budgets, Debra says investing in training can pay off big time for a leader professionally and personally, as well as the organization.

“Those things are going to trickle down through an organization in powerful and impactful ways,” she says.

Several strategies to lighten the burden of leadership

Delegation and empowerment

Many leaders fall into the trap of trying to do everything themselves, fearing that no one else can handle the responsibilities as well. However, effective delegation distributes the workload and fosters team development and growth.

By entrusting capable team members with tasks and responsibilities, leaders can free up valuable time and mental energy to focus on strategic decision-making and higher-priority matters. Delegation is not just about offloading tasks but also about giving team members the opportunity to contribute and grow.

Building a support system

Establishing a support system of mentors, advisors, or fellow business leaders can provide valuable guidance and emotional support. Sharing experiences and seeking advice from those who have faced similar challenges can be invaluable.

Additionally, leaders should foster a culture of open communication within their organizations. Encouraging team members to share their thoughts and concerns can lead to more collaborative problem-solving and reduce the burden on the leader.

Embracing technology and automation

Automation can handle routine tasks, data analysis, and reporting, allowing leaders to focus on strategic initiatives. Investing in technology solutions that align with the organization’s goals and processes can significantly reduce the administrative burden on leaders. Moreover, data-driven insights can aid in making informed decisions and staying ahead of market trends.

Setting realistic goals and expectations

While ambition is essential, setting achievable goals and expectations is equally crucial. Unrealistic targets can lead to stress and burnout, as well as erode team morale. Leaders should work with their teams to establish realistic objectives and timelines. This approach fosters a sense of accomplishment and helps prevent the exhaustion that can result from chasing unattainable goals.

Continuous learning and development

Continuous learning and professional development are essential for effective leadership. Leaders should invest in their own growth by attending seminars, workshops, and courses relevant to their industry. Also, encouraging team members to pursue their own professional development can contribute to the organization’s success and ease the burden on leaders.

The following piece is one of several that appears in the special summer edition of  our INSIGHT Magazine celebrating Cambridge’s 50th anniversary as we recognize just a few of the people, businesses and institutions that have made our community great.

As dignitaries gathered for the ground-breaking ceremony of Toyota Motor Corporation’s much anticipated Cambridge assembly plant on May 6, 1986, the Waterloo Record reported that four windsocks painted to look like fish hung outside the tent where officials had gathered.

Called ‘koinobori’ or carp streamer, Toyota Motor Corporation’s late president Dr. Shoichiro Toyoda explained the significance of the gesture, noting the fish is known as one that fights its way, even up a waterfall.

“The carp streamer is used as a symbol of vitality for parents who wish good health and strong development for their children,” he was quoted at the time. “We have hoisted the koinobori here in the hope that our company will grow to become a business appreciated and respected by everyone as a whole.”

Nearly 40 years later, it’s clear this ‘hope’ for success has manifested as Toyota Motor Manufacturing Canada Inc. continues to be a major industry and economic leader, and community partner for Cambridge and southwestern Ontario as a whole.

From the moment the first Corolla rolled off the assembly line at its Cambridge facility shortly before 10 a.m. on Nov. 30, 1988, the company has continually succeeded creating hundreds of new jobs over the years through the expansion of new product lines.

Cambridge was selected from over 40 municipalities in Canada for the plant and federal government incentives were a consideration. Former Cambridge MP Chris Speyer, quoted in an article in the Dec. 12, 1985, edition of the Cambridge Reporter announcing the news, said there were incentives in the contract to encourage Toyota to buy Canadian parts and that the provincial government would contribute $15 million over five years toward a program to train Ontario workers.

“I’m extraordinarily proud of our community that Toyota would choose us to locate such a major enterprise. This is the happiest day of my political career,” he told the Reporter, before describing the “tremendous positive impact” the plant would have on the local economy, noting the average salaries at that time would range from between $25,000 to $30,000.

“Just think of what that means to housing in our area, to shopping and small business as well as the spin-off effect by other industries locating within our area in order to service Toyota,” said Speyer.

The Cambridge plant was expected, in the beginning, to produce 50,000 cars a year with the capacity to reach 100,000 when market conditions permitted, providing work for 1,000 employees.

In a Reporter article published a year before the plant opened, it was reported that a progress report indicated it would provide 1,000 direct manufacturing jobs that would result in another 2,000 new jobs in the automotive and service industry.

To date, TMMC now employs more than 8,500 people across its three production lines in Cambridge and Woodstock. In Cambridge alone, its North and South plants encompass three million square feet on 400 acres located at the corner of Maple Grove Road and Fountain Street North.

The company, which has won numerous awards recognizing it as a ‘top employer’ and ‘greenest employer’, continues to thrive and evolve.

In August of last year, it marked a special anniversary when a red Lexus NX 350h hybrid electric luxury SUV, rolled off the line in Cambridge representing the 10th million vehicle produced by TMMC.

“Today’s milestone speaks to how far Toyota’s manufacturing operations in Canada have come over the past three decades,” said TMMC President Frank Voss in a press release at the time. “In 1988, the year we opened our first plant in Cambridge, our team members built 153 Toyota Corollas and it took over 11 years to produce our first 11 million vehicles. Today, we’re Canada’s largest automaker and leading maker of electrified vehicles, building half a million Toyota and Lexus vehicles for the North American market every year. Our world-class team members have been trusted to build some of the most popular vehicles in North America and that’s something we’re very proud of.”

The pain at the pumps consumers continue to feel as prices climb above $2 a litre won’t be dissipating anytime soon, warns Dan McTeague, President of Canadians for Affordable Energy.

“The problem is a shortage of oil,” says the former Liberal MP and long-time energy ‘watchdog’.

He says Russian President Vladimir Putin knows the world is vulnerable right now and has made it geopolitical and weaponized oil supplies in Europe through the invasion of the Ukraine, which has only magnified the issues already facing the other two major energy links in the world – namely Canada and the U.S. and OPEC (Organization of the Petroleum Exporting Countries).

“We’ve completely destroyed the Canada/U.S. relationship,” says Dan, referring to the political decision to ‘kill’ proposed pipelines in North America and notes that OPEC, which cut oil production to keep prices at a certain level, is looking towards Asia and markets of the future.

As well, factor in a slowdown of world economies during the two years of the pandemic which resulted in a decrease in the demand for oil, resulting in oil companies putting a stop on drilling for new supplies or slowed, or even stopped, some refineries. Now, these same companies continue to have a tough time ramping up production to keep pace with demand.

It’s a dire situation, which Dan says he discussed in the fall of 2021 in an interview with Driving.ca, long before Russia launched its Ukrainian invasion. In the article, one of the things he points to is the introduction of the Trudeau government’s Clean Fuel Standard (CFS) which he bluntly referred to as ‘another tax dressed up as a clean-air credit’ that is going to cost average Canadians even more at the pumps. The CFS is set to be introduced Dec. 1 of 2022.

Taxes, of course, remain one of the largest components of fuel prices in Canada accounting for at least 34% of the average pump price.

Breakdown of gas taxes in Ontario:

• Federal excise tax - 10 cents/ per litre
• Federal carbon tax - 11.1 cents/ per litre
• Ontario tax - 14.7 cents/ per litre
• GST/HST - 22.9 cents/ per litre.

This translates into a total amount of 58.6 cents/per litre worth of taxes in Ontario, on top of the base price of which near the end of May was 139.6 cents/ per litre. On average, this is in line with many provinces, except for Alberta which is 29 cents/per litre and Manitoba at 43.8 cents/per litre. Overall, Canadians are paying an average of 51.2 cents/per litre of taxes.

But is there a solution? Ideally, supply and demand would have to become more balanced which could be accomplished in several ways:

• The war in Ukraine ends and countries begin buying Russian oil again;
• OPEC ramps up oil production;
• Other oil producers increase production;
• People start driving less;
• Society as a whole embraces greener energy solutions that don’t involve oil.

Dan believes the world is still a few decades away from turning fully away from oil and natural gas.

“We’ve got to get real about building pipelines again,” he says, adding we need to be more realistic when it comes to our current energy needs.

He says as it stands, there is not much business operators can do as they continue to deal with disrupted supply chains and expenses, especially around transportation costs.

“I think food costs are the next shoe to drop because of course fuel affordability is gone, and with it now comes everything else,” says Dan.

The climate crisis is a growing threat to businesses and individuals around the world, but Ontario is well positioned to lead in the global green economy. 

The  Ontario Chamber of Commerce’s (OCC) and Cambridge Chamber of Commerce realize this and developed the OCC’s latest policy report: The Climate Catalyst: Ontario’s Leadership in the Green Global Economy. 

The report offers a window into how organizations in Ontario are confronting climate change and what policymakers can do to encourage more sustainable investment and innovation.

“We must be ready to tackle the challenges of climate change head on,” said Cambridge Chamber of Commerce President and CEO Greg Durocher. “We already feel the impacts of changing temperatures and climate in our region. While it does pose a threat to communities across Canada and the world, this is an opportunity for us to leverage Ontario’s skilled and innovative labour force to develop concrete solutions to decarbonize our economy and drive us towards a green, clean economy.”

“As Ontario emerges from the COVID-19 pandemic, we would be remiss to forget about the other systemic threat: climate change,” said Rocco Rossi, President and CEO of the OCC. “Its impacts are already being felt across Ontario as extreme weather events disrupt livelihoods, infrastructure, access to natural resources, and community well-being. While confronting climate change is a historic challenge, it also elicits opportunities for innovation, job creation, economic development, and local leadership.”

The main policy recommendations in this report can be summarized under the following themes: 

1. Minimize uncertainty. Improve predictability around climate policies and long-term energy procurement. 
2. Mobilize clean energy solutions. Use flexible regulation, risk-sharing partnerships, tax incentives, and Indigenous-led projects to accelerate investments in a suite of low-carbon energy technologies. 
3. Support cleantech. Invest in research and commercialization, expand skills training, and de-risk private financing for clean technology.
4. Strengthen climate adaptation. Coordinate strategies across levels of government, make tangible commitments and investments, and advance Indigenous reconciliation. 

“Organizations across Ontario are investing in the kinds of innovation that will advance both decarbonization and long-term economic recovery,” said Claudia Dessanti, Senior Manager of Policy of the OCC. “Our members are uniquely positioned to tackle the climate crisis with made-in-Ontario solutions in all sectors that are a win-win for both the environment and the economy.”

Read the report: https://bit.ly/3Dn2tfg

Lots of controversy over pipelines to carry oil these days. Is it safe, if we don't do pipe, what will happen? Are there better alternatives? You decide.