Steeling for a fight...
Business likes certainty. However, sometimes the only certainty is uncertainty. Business doesn’t want to operate in a stagnant environment, but rather one in which a business can flourish. An environment that offers certainty that they will have support through effective and evidence-based public policy that allows them to grow, to not be burdened by extensive red tape, to employ residents in their community and to benefit the economy.
That is not the world business is operating in today. Today there are trade tensions that are threatening to derail what has been built up over the past 30 years. The intertwined economies of Canada, the US and Mexico should be celebrated, not dismantled.
To further this cause, the Canadian Chamber of Commerce, and by association your Peterborough Chamber of Commerce, has initiated a campaign called Keep Trade Free. The mission of the campaign is to advocate for freer trade within North America and around the world, as well as to ensure a successful renegotiation of NAFTA for continued economic prosperity for Canada, the U.S. and Mexico.
In a recent 5 Minutes for Business publication, the Canadian Chamber of Commerce’s Director of International Affairs Mark Agnew talks about how there are a lot of elements businesses have no control over in the current situation, but there are a few bright spots. One is refocussing on NAFTA with the Mexican presidential election over; and the second is to tackle our own interprovincial trade barriers and regulations that hold us back from truly being competitive.
In our local municipal circle, Douro-Dummer Mayor J. Murray Jones has been saying for years, “we’re all in this together” as a reason to work together across municipal lines and present a united front for the
Peterborough region. Simply put, the same concept applies to NAFTA.
As the coalition identifies there are some key facts about trade and the situation we’re in:
aluminum, Canada’s retaliatory measures in response to the U.S. tariffs, and now potentially the use of safeguard measures by our federal government to limit steel dumping.
For example, some of our members are telling us they are caught up in a situation that could have significant lasting impacts. The challenge is that Canada doesn’t manufacture some of the various products being considered for safeguard. This potentially limits Canadian business' access to products in certain industries, such as construction. Already tariffs and retaliatory tariffs have led to increased costs and prices; in some instances, up to 25%.
Another concern is that contracts Canadian companies have with U.S. companies are still in effect, so these tariffs end up hurting businesses on both sides of the border.
Earlier this week, the Trump Administration also announced that a report examining potential tariffs on the auto sector would not be ready for the end of August, and no new timeline for the report’s release was given.
The end result is that protectionism on top of protectionism doesn’t help anyone.
The provincial government has announced that they intend to introduce a combination of online and regulated private retail to address the upcoming legalization of cannabis. It’s a move that is supported by the Chamber Network. The Ontario Chamber of Commerce (OCC) has advocated for a private-sector, licensing-based, and locally-oriented approach for the distribution of recreational cannabis since commitments for legalization were made by the federal government in 2016.
“We would like to stress that safety and social responsibility must be the first and overwhelming priorities of any distribution system, taking into account larger concerns about the underground economy, health and safety, and the administrative impact on municipalities,” says Rocco Rossi, President & CEO, Ontario Chamber of Commerce. “We look forward to continuing to work with the government during their consultation process with all stakeholders to ensure this approach is carefully designed to grow Ontario’s economy and build shared prosperity for all.”
Ministers Vic Fedeli and Caroline Mulroney state that under the new plan private retailers will have to follow a series of provincial rules, such as prohibiting the sale of cannabis to anyone under the age of 19.
Online sales will begin immediately following the legalization on October 17th, with the private retail model to follow on April 1, 2019. Leading up to that date the government will be conducting a series of consultations. Consultations will include municipalities, Indigenous communities, businesses, law enforcement, and public health advocates. The consultations will also be used to determine specific rules including the types of eligible businesses that will be able to sell cannabis, the roles of municipalities and First Nations and how to protect children.
Ontario is not the first province to go this route; Manitoba, Saskatchewan and Alberta are also choosing to implement a private retail model, while the private retail model has yielded economic benefits in several US states.
In the 2016 approved policy resolution, the submitting chamber details the economic benefits to Colorado and Washington since they legalized cannabis. In 2014, Colorado retailers sold $386 million USD of medical and $313 million USD of recreational marijuana, totalling nearly $700 million USD in sales. These sales generated $63 million USD in tax revenue and an additional $13 million USD collected in licenses and fees. The state’s Department of Revenue projected that marijuana sales in the state would exceed $1 billion USD in 2016.
Blueprint Letters for Making Ontario Open for Business
In July, the OCC wrote to each provincial Cabinet minister, outlining a blueprint to execute over the next four years that will help make Ontario open for business. In these letters, we asked that the current plan for distribution be re-evaluated prior to the October 17 legalization date, and that the government consider the following principles in the process of policy design:
Recreational cannabis use will not be allowed in any public spaces, workplaces or motorized vehicles. The province is also planning to give municipalities a one-time window to opt-out of permitting a physical
cannabis store within their boundaries.
The Peterborough Chamber of Commerce has held several sessions on marijuana and the workplace and the responsibility of employers and employees. A recap of a panel from our 2017 Business Summit is available on our YouTube channel – Peterborough Chamber.
We would like to hear from our members and business community about their thoughts on the
Reach us at: email@example.com
The core work of the Chamber is to represent our members, but just as significant is to be the catalyst that strengthens our entire community. We believe that a strong business sector lifts everyone up and makes the community a better place to live, work and play. We may advocate for our members, but that advocacy affects everyone – other businesses, community groups and charities, all three levels of government through fair taxation, and the poorest among us. A strong economy provides for a strong community.
Recently, we were asked if our messaging to government had changed since the election and the Conservative Party winning the majority. As the advocacy group for business, our message will continue to centre around four pillars:
These pillars set the course for our advocacy during the provincial election and we anticipate they will fuel our discussion during the upcoming municipal election campaign.
At the provincial level, Ontario is in a time of transition, the government that guided us through almost a decade and a half is no longer in power. It’s an adjustment period as we learn and understand the position of Premier Ford and his government. The main messaging is around improving life for Ontario’s residents, which is not dissimilar to the goal of the previous government, but from a different path.
Since the return of the legislature on July 9th there have been commitments of improved trade between provinces as a result of the Council of Federation meetings and continued connections made to our trading partners to the south.
There are more discussions to be had and most likely, there are still changes to come, just as there would had the election results been different. This is where the Chamber commitment to our four pillars benefits our advocacy as we are dealing policy not politics.
Already there have been a number of significant changes from the cancellation of the cap and trade program to the management changes at Hydro One to a re-examination of the sexual education curriculum. And most recently, the cancellation of the Basic Income Guarantee trial in Lindsay, Thunder Bay etc. which was an eyebrow raiser. It’s not immediately clear what the benefit is of cancelling this program before it’s complete - a short three-year trial, which we are almost half way through.
As a society, we are measured by how we can effectively empower our most vulnerable, and we need to consistently ask ourselves how we measure up. This was a good opportunity to look and gain data on a possible alternative to the existing social safety net, which we think we can all agree needs to be improved. We’ve now lost that opportunity to a vague promise of “something different within 100 days”. At this point, it’s impossible to say whether or not that “something different” will pan out to be a better solution and that uncertainty presents valid cause for concern for many.
The Chamber network fought hard against Bill 148, which many viewed as the business community against the lowest income earners. The truth of our argument, which is well documented, was that we thought it was unfair for the business community to share the entire burden of lifting our most vulnerable up. We recommended three things: a longer runway for the implementation of Bill 148, the completion of the Basic Income Guarantee study, and income tax measures to help low income earners.
Basic Income Guarantee may not have proven to be the right solution, but cancelling the trial guarantees that the option is off the table. The Chamber published an election platform for the Provincial election that called for an evidence-based approach to public policy. Cancelling a trial before it’s finished certainly doesn’t meet that criteria.
The importance of evidence-based public policy should not be lost on anyone. Just as a business doesn’t move forward on a project until it has examined the pros and cons, the possible outcomes, and the various ways to achieve the end goal, so too should the public policy that guides government decisions. This belief is what elevates government decisions above politics, but it requires certainty, consistent thought and a clear and well-communicated path.
Trade is the subject of much debate. Perhaps given the past 18 months that’s an understatement, but from the renegotiations around NAFTA to recent discussions at the Council of the Federation around
interprovincial trade to CETA and CPTPP agreements, not only the act of trade, but the core value of why we trade is being called into question.
How do we incorporate values in the midst of looking for solutions to continue with and expand the integrated economies of the world? The values question adds another layer to the debate and the truth of the matter is that both the trade itself and the reason why we look to trade in the first place are intended to achieve the same goal – prosperity. Many technologies such as the Internet, social media platforms, e-commerce and more have created connections that were beyond imagination even just a few decades ago. These connections and technologies allow for easier and faster trade, but then what is the human impact? And how do we adjust training and skills to adapt to a changing reality?
The International Chamber of Commerce (ICC) has been formulating a position on why #TradeMatters for a while now. ICC Secretary General John W.H. Denton AO, in an interview with MSNBC, spoke to why trade was encouraged over 40 years ago, identifying that multi-lateral, non-discriminatory trade in abundance achieved the desired prosperity for effort. The challenge today, he went on to say, is that “talk of the aggregate benefits of trade was of little comfort to someone who has lost their job or is working for less" and that he is “genuinely worried about those who are no longer in favour of the open economy. Investing in skills and development is only part of the answer. It also requires looking at what the jobs of the future are, and how you prepare people for lifelong learning to participate in that is not just a government issue. It should obsess businesses everywhere.”
It’s an interesting perspective that encapsulates the debate around trade as a whole and separates the role of country from the actual act of trade.
The ICC also writes the following:
“Evidence shows that well over 80% of job losses in advanced economies are not due to trade, but increased productivity through technology and innovation. As the world’s largest business
organization ICC urges governments at the national level to work with business to shape policies and
partnerships that address labour market dislocations.”
Labour market questions are of huge concern to communities of all sizes. In Peterborough city and county there are businesses who are unable to find the workers they need and this inhibits growth, competitiveness and prosperity.
Through our Leaders Lunch series which is focused on market access, the Peterborough Chamber has found itself bringing together local business leaders as well as educators and institutions around building and providing a workforce that can help those businesses interested in trade stay competitive in our global economy.
“There is an issue that we are confusing job losses as a consequence of trade or as a consequence of shifts in economic power or from technological advances,” Mr Denton said in the MSNBC interview. “Decisions about how you skill people up to confront new realities of new jobs that are being created are domestic issues.”
Since the recession of 2008 diversifying our trading partners has been a focus of our federal
government. This is seen with the signing of CETA and CPTPP. And while there has also been
considerable discussion around upskilling and the skills mismatch, that discussion in the context of trade has not been as loud. It is a good place to start though. If as a country we are encouraging more trade with new partners, having an understanding of the job requirements those new trade agreements could foster is crucial. If technology has sped up the time it takes to produce a widget then what are the skills required of
employees in the new process? How do they fit in? What is the willingness and ease of returning to school to ensure business competitiveness and relevance?
The fact that the US tariffs on steel and aluminum and the reciprocating measures from these countries
(except Japan) is in the billions - $37B on China, $13B on Canada, $8B on the European Union, $3B on Mexico, and $2B on Japan - highlights the prosperity that has been created through trade, but what’s missing is the human impact. From a blog by the US Chambers of Commerce we know that the
integration of economies goes beyond monetary value to the millions of jobs currently dependent on trade.
The question should not be how to scale back or adjust the amount of trade to achieve prosperity, but how to encourage a workforce that can meet the trade demands that the world wants to see.
International Chamber of Commerce Blog