Submission to the 2024 Ontario Pre-budget Consultations

The Chamber made a presentation to the Standing Committee on Finance and Economic Affairs and sent a written to the Ministry of Finance with local input to the upcoming Provincial budget.

Submission to the 2024 Ontario Pre-budget Consultations

Jan 31, 2024 | News, Provincial Advocacy

The Chamber made a presentation to the Standing Committee on Finance and Economic Affairs and sent a written to the Ministry of Finance with local input to the upcoming Provincial budget.

The Thunder Bay Chamber of Commerce represents 800 Member companies with over 20,000 employees in the Thunder Bay area.

This year’s provincial budget comes at a critical juncture as Ontario’s business community continues to grapple with inflation, labour shortages, supply chain disruptions, and broader economic uncertainty. Budget 2024 must address Ontario’s productivity gap by focusing on measures that not only support immediate growth but also lay the groundwork for sustainable long-term investments. This will require policies that generate economic efficiencies, reduce red tape, break down silos, and support innovation. We encourage the Government to consider the fulsome list of recommendations made in the Ontario Chamber of Commerce’s pre-budget submission as important steps to bolster economic well-being, growth, and recovery across the province.

Labour Shortages
Labour shortages are being felt across the province, but particularly in Northern and Rural areas where population growth is limited. Northern Ontario specifically is experiencing a demographic shift and a population decline that is fueled by natural aging, low fertility rates, a rising life expectancy and an increase of out-migration. Population and migration trends to 2016, suggest that Northern Ontario needs 50,000 newcomers by 2041 in order to sustain current population levels and our labour needs.

The federal Rural and Northern Immigration Pilot Program (RNIP) has proven highly successful in attracting new people to Northern Ontario specifically, and to rural and northern Canada generally. Ontario should learn from and mirror this success through the allocation of Ontario Immigrant Nominee Program (OINP) spots for Northern and Rural Ontario communities. We urge the Provincial Government to ensure that the Ontario Immigrant Nominee Program addresses labour market challenges by allocating 3,000 nominee spots to Northern Ontario.

International Student Cap
International students are vital contributors to our economy, working part-time jobs that help reduce labour shortages, contributing to the diversity and vitality of our communities, and reversing declining population trends in the North. We are very concerned that the federal policy to cap international student permits could have significant negative impacts to our two post-secondary institutions by limiting recruitment of international students, exacerbating financial pressures on both Lakehead University and Confederation College, and reducing the breadth of sustainable programming options.

Non-Resident Speculation Tax
Another barrier to immigration is the 25% Non-Resident Speculation Tax that applies on the purchase or acquisition of an interest in residential property located anywhere in Ontario by individuals who are not Canadian citizens or permanent residents of Canada. We are concerned about the unintended consequences that this tax may have on efforts by Thunder Bay employers to attract skilled foreign workers.

Currently, participants in the Ontario Immigrant Nominee Program, refugees and spouses of Canadian citizens can apply for an exemption to this additional tax, yet there is no exemption offered to skilled foreign workers arriving through the Federal Rural and Northern Immigration Pilot (RNIP). RNIP is delivered in Thunder Bay, Sault Ste Marie, Sudbury, North Bay and Timmins, allowing eligible employers to make full-time permanent job offers to skilled foreign workers who can help fill identified labour shortages in the community.

We urge the Provincial Government to ensure that the Non-Resident Speculation Tax exemption is immediately expanded to include participants in the Rural Northern Immigration Pilot as well as those awaiting permanent resident status (eg: Afghan Initiative and Ukrainian Initiative arrivals) and post-graduation work permit holders living in our communities.

Taxes & Red Tape on Alcohol
We support the efforts of Ontario Craft Brewers to achieve a more competitive and lower tax environment for craft brewers in Ontario. We call on the Government to eliminate the beer can tax and implement a new beer tax structure that establishes lower, progressive tax rates for microbrewers; higher production volume thresholds for reaching maximum tax rates; and consolidating multiple existing taxes into one overall tax.

In addition, Ontario’s alcohol policies and processes add significant costs to local restaurants and bars. As restaurants rebound from the pandemic and a deteriorating economy, we need the LCBO to be more supportive of the hospitality sector by updating policies to allow imported alcohol to be stored in the region and reinstating store to store transfers for businesses outside of the Greater Toronto Area.

Forestry continues to be a major contributor to our economy providing direct and indirect employment to thousands of hardworking men and women in our region. High inflation, rising interest rates, workforce shortages, protectionist trade policy, and declining or stagnant market segments represent significant and challenging headwinds for the forest sector.

We support the implementation of Ontario’s Forest Strategy and the recommendations of the Ontario Forest Industries Association which focus on key competitiveness measures including those that take steps to: Prioritize biomass and pulpwood market development; and improve forest road infrastructure by increasing funding to $75 million per year.

Procurement Processes
The Government is continuing to move forward to implement a centralized procurement model through the creation of Supply Ontario. While we support efforts to improve the efficiency of procurement, we have concerns about the unintended consequences of further centralization to local communities. Large provincial contracts cannot effectively be fulfilled by regional suppliers which could result in large contract awards being made only to national or multinational distributors, thereby damaging regional suppliers & economic development.

As outlined in the recent Ontario Chamber of Commerce report “Power of the Purchase Order”, there are numerous steps the government can take to drive better outcomes, including:
• Adopting Value-Based Procurement across the public sector by defining objectives of procurement to include lifecycle costs, innovation, economic development and other long-term outcomes;
• Improving access to procurement for small and local businesses by centralizing information and reducing administrative barriers;
• Implementing regional procurement hubs;
• Establishing a supplier diversity policy; and,
• Working with the Government of Canada on its efforts to improve access to procurement for Indigenous businesses by leveraging partnerships.

Northwestern Ontario is home to hundreds of active mining projects representing Billions in mineral value and will have a significant impact on the economy of the Northwest and the Province as a whole. The mining industry stimulates and supports economic growth both in large urban centres and in rural and Indigenous communities.

Mineral deposits are often located hundreds or thousands of kilometres from road, rail, energy and technology infrastructure; as a result, companies are faced with costs of hundreds of millions of dollars in order to simply access their mining claims. The costs to establish the required infrastructure are frequently too prohibitive for private-sector investment alone. Federal and Provincial financial support is needed at the front end to make these projects happen: we know that the return on investment in tax revenues and economic growth will more than offset these costs in the decades to come.

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