The fourth annual Ontario Economic Report (OER), released today by the Thunder Bay Chamber of Commerce and the Ontario Chamber of Commerce, reveals areas of opportunity where both business and government can focus to create an environment more conducive to small business success.
Small businesses are powerful drivers of economic growth across Ontario: they constitute 98 percent of all businesses and 30 percent of the provincial GDP. Together, small businesses employ nearly three million Ontarians and represent over two-thirds of private sector workers.
The Small Business Friendliness Indicator (SBFI) is a new tool which measures Ontario’s competitiveness from the perspective of small businesses. For 2020, the SBFI score is -9, (on a scale of 100 to -100). This indicates that the business environment poses some challenges for firms with fewer than 99 employees. However, through measures such as new supports for regulatory compliance and investment in online services, industry and government could improve that score.
“The results indicate that the Government of Ontario is on the right track by focusing on efforts to digitize government services, expand access to broadband, and cut red tape. However, more work remains to be done,” said Rocco Rossi, President and CEO of the Ontario Chamber of Commerce.
The Small Business Friendliness Indicator is intended to provide an assessment of the ease of business in Ontario across seven different metrics. The 2020 results indicate that respondents find it particularly difficult to start a business, hire a new employee, and comply with regulation, but also offers positive scores on ease of licensing and available training and networking programs. The SBFI also revealed that small business owners are eager to embrace more online services from government, especially with respect to regulatory compliance.
“The Ontario Economic Report, including the Small Business Friendliness Indicator, is a useful tool to advise government on where to reduce barriers and increase investment to support business competitiveness across the province,” says Charla Robinson, President of the Thunder Bay Chamber of Commerce.
Other highlights from the Ontario Economic Report include:
- The confidence gap, which measures the difference between business’ confidence in themselves and in Ontario’s economic outlook, widened in 2020 to near historical levels. Although organizational confidence remains high, business confidence in the broader economy dropped seven percentage points in 2020, explained in part by lowered growth expectations nationally and globally. Beyond this, challenges related to the costs of doing business, the high cost of living, and the province’s debt continue to be top of mind for OCC members.
- Infrastructure investment, such as transportation and broadband internet, topped the list of business priorities for government, followed by reducing regulatory burdens, lowering the cost of living, and reforming business taxes.
- Challenges related to accessing financial capital, attracting and retaining talent and burdensome regulations continue to compromise the ability of many of Ontario’s community to compete effectively with other jurisdictions.
- Ontario’s principal economic indicators remain sound but subdued heading into 2020 with economic growth expected to vary greatly across the province. The forecasts show flat employment and population growth in Northwestern Ontario, reinforcing a decade-long trend of imbalanced economic growth across different regions of the province.
The Ontario Economic Report was made possible by support from Hydro One.
