Rising costs and recruitment challenges are the biggest barriers Canadian businesses expect to deal with over coming months.
The Canadian Chamber of Commerce Business Data Lab’s analysis of the Canadian Survey on Business Conditions (which surveyed 17,695 businesses) found 50% of businesses singled out rising input costs as an obstacle for their business for the next three months. Four out of the top eight obstacles listed are related to rising costs, including insurance and transportation. Three of those top eight obstacles are related to labour challenges, including recruiting and retaining skilled employees. Supply chain challenges round out the list of most pressing obstacles for business.
To deal with workforce challenges, businesses are offering more. Over the next three months, 45% of businesses expect to increase wages for existing staff, 24% expect to increase wages for new hires and 6% expect to offer signing bonuses or incentives. Other popular solutions include flexible scheduling, professional training, and increased benefits.
The accommodation and food service cited the least optimism and topped the list in its workforce struggles with 65% of businesses citing a shortage of labour force as an obstacle. This sector is also leading the way in wage increases, with 58% anticipating they will increase wages, including 32% who expect to raise wages by 10% or more.
Despite pressures of rising costs, access to the funds to do it adds to that challenge, with 28% of businesses in the accommodation and food service sector reporting that they cannot take on more debt.
With a workforce that is increasingly looking for flexibility in working hours and working from home, the food and accommodation sector offers the least flexibility due to the nature of what they do.
News that Ontario is moving ahead with the federal government on a $10-a-day childcare plan is a welcome relief for young families and businesses alike. The first step is a 25% reduction in child care fees effective April 1.
Women have been disproportionally affected by COVID-19 in terms of being employed in the most vulnerable and hardest hit sectors (like accommodation and food service) as well as taking on significant childcare issues.
The Ontario Chamber of Commerce has been advocating that women’s participation in the labour market is a precondition of our economic recovery and future prosperity. Offering affordable childcare is a significant step to easing costs for young families and making it more accessible for parents to take on a larger role in the workforce.
The Ontario Chamber of Commerce also states that to make the childcare agreement viable, the childcare sector needs an adequate supply of qualified workers. This includes recognizing foreign credentials, enhancing online training, fast-tracking in-school credentials, and developing financial support for underemployed populations to access training opportunities.
Affordable childcare will offer families help while having positive effects on access to labour – but more support is needed for our hardest hit businesses. It’s apparent that some business sectors are going to be dealing with the economic effects of COVID-19 for some time.
What is lower down on the list of obstacles facing businesses is customer demand. People still want to dine, travel, shop, and renovate. We have a significant role to play as consumers to spend our money locally, including patronizing local restaurants and attractions. We can help our local businesses recover and thrive.
After two long years, tourism is set to return to the Kawarthas.
Our region has been in an awkward situation for the last two years for our summer tourism season. The messaging has been stay home, but people were limited in their recreational options and flocked to the region from across Ontario. Many of those who were able to open and offer activities did well, but many others were forced to close or significantly scale back their offerings.
Through it all, our borders remained closed to all but essential travellers and people willing to stay long enough to go through the self isolation process.
As of April 1, fully vaccinated visitors to Canada will no longer be required to take a COVID-19 test unless selected for random testing. Partially or unvaccinated travellers will still need to follow applicable testing criteria.
Though many Canadians will take advantage of relaxed border restrictions to travel beyond our borders, many have established new hobbies, traditions, and a love for Ontario offerings. Capitalizing on this, the government of Ontario is offering the Ontario Staycation Tax Credit. This offers 20% back on eligible 2022 accommodation expenses up to $1,000 per individual or $2,000 per family. This includes hotels, motels, resorts, lodges, bed-and-breakfasts, cottages and campgrounds — all of which can be found right here in the Kawarthas.
The Canadian Chamber of Commerce is currently advocating for a similar program from the federal government for domestic tourism that includes hospitality activities like dining. Time will tell if this is included in the upcoming federal budget.
All of this opportunity comes at a time when nearly all public health restrictions have been lifted. Venues are free to sell out to capacity crowds, restaurants can host a full Friday night compliment, and recreational activities can resume. We’ll see the return of sports tournaments, concerts, and cultural events.
And this time around we can openly welcome our visitors.
This is the summer many of our businesses desperately need.
According to Peterborough and the Kawarthas Economic Development, our region welcomes more than 3 million visitors annually who spend approximately $365 million at local tourism-related businesses.
Despite the influx of tourists, it’s going to take time to rebuild. While capacity limits can be lifted at the stroke of a pen, filling back up to capacity isn’t so easy. Staff have moved on to jobs that still offered a steady paycheque while the tourism industry was mostly shut down. Hiring an all-new fresh team is daunting and comes with big challenges. Chefs need to learn a new menu, administrative staff have to learn what products to order and booking staffing levels, and reactional activity providers need to learn the ropes before instructing customers. And there isn’t exactly a large pool of people waiting to get trained and jump into the tourism and hospitality industry.
On top of that, many business owners are already financially stretched to the limit from trying to survive the last two years that buying inventory, hiring staff, and investing in their facilities is challenging. Many will have to start all over again building their customer base, which takes time and money.
At the end of the day, many business operators are simply exhausted and the busy season hasn’t even begun.
All this to say that relaxing health and travel restrictions is a big move for many local businesses, but it’s by no means the end of their challenges. It’s going to take intentional, targeted investment and continued supports for our hardest hit businesses, including tourism and hospitality, to be able to thrive for years to come.
Priorities for the federal budget
Budgets are investments in priorities and the federal government is expected to release its updated priorities in coming weeks through the 2022 budget.
Chambers of commerce and boards of trade from across the country have worked alongside the Canadian Chamber of Commerce on recommendations for the upcoming federal budget.
The pre-budget submission includes a range of topics, from unlocking the potential of legal cannabis to tax reform. Here are some of the highlights:
In a time when our economy, public services, and population are going online and depending on digital like we’ve never seen before, the Canadian Chamber of Commerce reports that Canada spends about half as much per-capita as G7 peers like the UK and France when it comes to cyber security. Just as bridges and border crossings impact our supply chain and national security, so too does our digital infrastructure.
The CCC is calling on the Government of Canada to invest $1 billion in the cyber security of our infrastructure, supply chains and businesses. They would also like to see the government invest $300 million to accelerate the commercialization of cybersecurity products ands services and invest $200 million in building our cybersecurity workforce.
Industry and government need to work together on our path toward a sustainable net-zero future. The CCC is recommending the government:
• Accelerate the wide scale deployment of carbon capture, utilization and storage
• Support transitionary measures, like extracting biofuels from waste
• De-risk critical minerals supply chains, including investments in supporting infrastructure like small modular reactors and site-specific clean water solutions
• Champion a hydrogen ecosystem
Our innovation needs are wide-ranging and extend beyond the traditional tech sector. We’re looking for investment in a life-sciences strategy to improve the health of Canadians and prepare us for any future health crisis.
To be ahead of the curve on innovation, we need to invest in digital infrastructure. This means investing in broadband internet access for everyone and more access to 5G internet in rural and remote communities.
We also need to make sure our innovation is protected through updated data and privacy legislation.
Immigration has long played a critical role in our communities and our economy. The CCC is asking the government to decentralize the immigration selection process and support local solutions built by communities to address community workforce needs, streamline the temporary foreign worker program process, and facilitate integration of foreign-trained workers into the labour force to maximize
The CCC recommending the federal government provide debt relief for hard-hit small and medium-sized businesses. This includes extending repayment terms and forgiving interest for the Canada Emergency Business Account (CEBA), the Business Credit Availability Program (BCAP) and the Highly Affected Sectors Credit Availability Program (HASCAP).
They’re also asking the government to support domestic tourism through new tax incentives and rebates for travel and hospitality activities to encourage families to travel within Canada in 2022.
The full pre-budget submission is available at chamber.ca.
War in the Ukraine is sending world economies for another roller coaster ride as we’re slowly rebuilding from the devastation of COVID-19 and years of public health restrictions.
Inflation has been the hot topic for the last few months and judging by the price of gas, it could have a longer and deeper impact than originally forecasted. We’ve gone from less than $1 a litre in March of 2020 to nearing $2 this week.
The events in the Ukraine are incredibly tragic.
Canada has been growing its trade with Ukraine over the last few years, especially since the signing of the Canada-Ukraine Free Trade Agreement in 2017. We export a significant amount of fish and seafood, machinery, vehicles and parts, meat, and electronics with a growing export of aerospace products and wood pulp. In return, we’ve been importing steel, electronics, and vegetables. In 2019, Ukraine supplied 26% of our apple juice and 6% of our snow skis.
In total, the Government of Canada values trade between our two counties at about $340 million and it’s all essentially on hold.
It’s significantly lower than the $1.5 billion in business we do with Russia, to whom we export aircraft, machinery, and electronics and import energy, rubber, iron, copper and fertilizer. We’ve brought in sanctions against Russian products, but it’s not so simple to find new suppliers. Fertilizer producer Nutrien Ltd. is expecting a global shortage of fertilizer, impacting crop productions around the world.
Both fall well short of our $700+ billion trading relationship with the US, but the implications will be felt across sectors in our economy. Russia is the second largest oil exporter in the world and sanctions and import preferences mean demand for more ethically sourced oil is driving prices throughout the roof everywhere.
Add to this an increase in fuel demand as many areas scale back COVID-19 health measures leading to more travel to visit friends and family, in-person work at the office and visiting clients, and the resumption of recreational travel and tourism.
We need fuel to farm, mine, and manufacture goods. We need fuel to transport retail goods to your local store, fresh produce to restaurants, and supplies for local makers. There’s hardly a business not dealing with the effects of high fuel prices, let alone the rest of the inflation-related issues.
The timing of this crisis is challenging for our economy and our local business, but it’s important to remember the human side. More than 1.5 million people have left Ukraine as refugees with more likely to come. The Government of Canada has pledged its assistance in placing people. Much like the influx of Syrian residents a few years ago, it’s likely our community will host another round of refugees.
While our hope is that our world leaders will successfully avert another world war, a global economic crisis is well underway. World economies are so intertwined that even products we produce and consume domestically (like gas) are subject to the whims of global markets. The resilience of our local business community is once again coming to the forefront to take on the next global crisis.
After more than a decade of healthy electricity supply, concerns are mounting that Ontario is entering a period of electricity shortfalls.
Demand is growing. Our population is increasing, up 5.8% over the last 5 years. Factoring the drop in immigration due to the pandemic, something that should pick up again when things return to normal, and the coming years should see even more growth. This is compounded by the growing electricity demands of everyday life as well as climate conscious decisions like more electric vehicles and a move away from natural gas heating.
As demand increases, the supply side is facing its own challenges. The Pickering Nuclear Generation Station is planned to be fully retired by the end of 2025. Other investments in nuclear refurbishments, renewed contracts, and resources are needed in the near future.
The Independent Electricity System Operator is forecasting capacity to fall short of demand by the mid-2020’s with the gap widening from there. They estimate the province will need to find 12 gigawatts of power of over the next 20 years.
A recent policy statement from the Ontario Chamber of Commerce called Addressing Ontario’s Growing Electricity Needs lays out how critical the situation is. Regardless of what route we go to supply that capacity, it takes years to plan and develop not only the power generation, but also the transmission and distribution infrastructure.
Additionally, the Province is planning to achieve zero-emission electricity generation, which will have to include phasing out natural gas-powered plants. The Province is currently looking into options to pick up capacity like biomass and hydroelectric generation, including new contracts for small hydroelectric projects.
The Ontario Chamber of Commerce states that given the time it takes to operationalize electricity infrastructure, it is imperative that Ontario continue taking steps today to secure reliable, affordable, and sustainable resources for future generations. Relying on importing electricity won’t be able to meet all our capacity needs and there’s volatility with other regions forecasted to need additional supply as well.
Having sufficient and affordable electricity is critical to the economic success of our province. Industry and have made significant investments in electrification, especially in resource extraction and manufacturing.
There are also opportunities for our businesses as we reinvest in electricity generation and transmission. The OCC is advocating with the Ontario Government to ensure local businesses will be an integral part of these investments. They’re calling on the Province to continue consulting with industry to ensure there is a competitive and transparent process for contracts that leverages existing assets where possible.
While the government has been making steps to address these issues, the timeline is getting tight. It’s time to make the investments we need to secure reliable, affordable, and sustainable electricity that both people and businesses need.