Our economic recovery is going to require attention and investments to specific business sectors. We have been advocating for years for changes to taxation and regulation for our local breweries, distilleries, and wineries. Now is the time for the Government of Ontario to take a new look at these local businesses and their connections to local retail and food service businesses. We have several resolutions on the books, including one with the Ontario Chamber of Commerce titled “Changes to Alcohol Retail in Ontario Need to Support Local Industry and Jobs in the Wine and Grape Sector.” Recently, Jeff Leal penned a guest column for iPolitics highlighting some of the current issues facing with wine and grape industry. We’re going to let Jeff explain it here as a guest columnist. Excerpts from “Canada’s award-winning grape and wine industry is at risk” — Aug. 9, 2021 Jeff Leal is a former City of Peterborough councillor (1985 – 2003), Member of Provincial Parliament (2003 – 2018), and Ontario Minister of Agriculture, Food and Rural Affairs (2013 – 2018) After many months of patience and caution, it seems Ontario is slowly emerging from the pandemic — and its businesses are trying to seize opportunities to make up for lost time, as the federal relief programs that buoyed them begin receding. But as a former provincial cabinet minister, I have a few words of advice for leaders in Ottawa at this critical juncture: While urgent triaging and government relief have been essential for the last 18 months, complex sectors will require a closer look, and precise help to ensure their contributions to our economy remain secure for the future. In fact, one sector has been on my mind on the most: grape and wine producers, and the small and medium businesses whose purely Canadian wine the sector depends on for its continued growth in Canada. Allow me to explain. One of the things that struck me during my time as Ontario’s minister of agriculture is how much agriculture contributes to the provincial economy, not to mention the country. In 2014, its contribution to the GDP was roughly $37 billion, and more than 800,000 people were employed in what is a very dynamic and innovative sector in Ontario. A fraction of the population is feeding the vast majority of the province, yet the importance of the agricultural sector is often overlooked. Ontario has one of the most diverse agricultural sectors in the country today, including the dynamic segment that is Ontario’s grape and wine industry. Over the last 40 years, VQA 100 per cent Ontario grape-based wine has cemented my home province’s international reputation for growing unique grapes and producing award-winning wines that the best experts in the world recognize for their importance and quality. It’s a very competitive industry, and the margins are challenging. On the shelves here at home, Ontario’s best bottles are competing against products from jurisdictions with established and excellent industries in their own right: the United States, Australia, New Zealand, and Europe (with a slightly accelerated influx, thanks to the Canada-European trade deal). Furthermore, they’re competing against behemoth companies that import juice to blend with a low ratio of Canadian grapes, which is often confused as local product. The agreement at the World Trade Organization last summer to end Canada’s excise-tax exemption on 100 per cent Canadian-grown wine came when the focus was on the pandemic and keeping everyone afloat. But the reality of Ontario’s wine sector is that the legacy of past trade agreements means smaller businesses enjoy fewer advantages on their own home turf. A replacement program is critical, but it needs to be rooted in equity, not equality. Canadian leaders have an obligation to support, in a very direct way, our smaller producers — to make sure they continue to thrive and are completing the research and development that’s so important for the future of the many businesses that make up our sector. The wine segment of Ontario’s agricultural economy is constantly evolving, and it’s incumbent on governments to do their part to ensure that locally grown wines continue to enjoy the sterling reputations they have around the world. There’s been a legacy of investment in land and vineyards, both by Ontario growers ($684 million), and by the federal ($17.3 million) and provincial ($18 million) governments. Without forward-looking, long-lasting, planned investments, the next generation won’t have a domestic grape and wine industry to work in. So, while we slowly shift back to normal, let’s not forget the details. The federal government needs to continue supporting the smaller players in the industry — the ones with the smallest margins, who contribute enormously to their local economies, and whose futures are critical to the sector as a whole. My parting advice: Take the time to get it right. Ontario farm families who produce 100 per cent local grapes and wine, and their communities, are counting on it. In the meantime, we can vote with our dollars and look for the VQA label when grabbing that bottle to enjoy this summer. Your local businesses have been through a lot over the last year-and-a-half. And the pandemic isn’t over. It’s going to take strong leadership, both locally and nationally, from the government of Canada to see to the end of this health crisis and move us toward a future where people, businesses and communities can thrive. This election is the ideal time to take a hard look at what is the best path to get us there. The Canadian Chamber of Commerce has put forward its own platform as a guide to assist candidates in understanding the needs, issues and opportunities at the forefront for the business community. Check it out at chamber.ca. Canadians must collectively decide which party offers a plan that has what it takes to grow: 1) Finishing the fight against COVID 2) Getting the fundamentals right 3) Creating 21st century opportunities Job One: Finishing the fight against COVID Though some things seem “back to normal,” many small enterprises and business in the hardest-hit sectors, including tourism, travel and hospitality, will not recover until public health restrictions are lifted and economic activity returns to normal. Until that time comes, these fellow Canadians require ongoing support. Helping the hardest hit businesses includes creating a replacement program for the Canada Emergency Wage Subsidy and the Canada Emergency Rent Subsidy. We’re asking the federal government to introduce debt relief by forgiving interest payments on COVID-related government backed loans for small and medium-sized enterprises (SMEs) in the hardest-hit sectors. Job Two: Getting the fundamentals right COVID-era recovery programs, while important, were not designed to address the fundamental problems plaguing Canada on infrastructure investment, regulatory burdens, taxation, SME competitiveness and internal trade barriers. SMEs are Canada’s biggest employers and our next parliament must ensure there is an appropriate environment to help our entrepreneurs grow and create jobs. Supporting Canadian entrepreneurs includes: • Modernize the tax system so it works for SMEs • Develop a Small Business Net-Zero Strategy • Continue facilitating the secure digitalization of SMEs • Investing in infrastructure, including the National Trade Corridors Fund • Speed up the Indigenous reconciliation process • Create new opportunities for diversity-owned business and those with diverse workforces to access federal contracts • Remove tax barriers for childcare expenses • Investing in building an inclusive, productive workforce • Create flexible, accessible, navigable upskilling and reskilling options • End the regulatory patchwork and interprovincial trade barriers that separate Canadians Job Three: Creating 21st century opportunities Canada must ensure the types of jobs and opportunities people want are being created here. To do this, we need to invest in cybersecurity, privacy protection, and broadband internet. We need to invest in a net-zero future including a strategy that allows businesses to compete successfully, including a strategy for low carbon exports, common standards for sustainable finance, and work with our trade partners on carbon offsets. Canada can serve as a model to the world on reaching net-zero through targeted investment programs and smart regulation, including championing our agriculture sector to be a global leader in the fight against climate change. Our businesses would benefit from expanded market reach, including a renewed relationship with the U.S., increased agriculture exports, and a focus on multilateral trade efforts on key issues. This last year-and-a-half has also shown us that we need to invest further in healthcare, including implementing a national life sciences strategy and creating a strategy for value-based healthcare. Federal Election It has been less than two years since the last federal election, but a lot has changed. Everyone wants to be done with this pandemic and rebuild our communities and economy, but there are different paths and methods to get us there. This is an opportunity to reflect on where we’ve been, where we want to go, and work with our local candidates to shape the future we want to build. Governments spend a lot of money. Our federal and provincial governments spend in the hundreds of billions of dollars annually. Even the City of Peterborough spends hundreds of millions.
A lot of that spending goes directly into government resources like staffing, but a significant amount goes to outside purchases through the procurement process for everything from major construction projects to catering. How we see the value of that spending is changing as the governments move toward social and sustainable procurement processes. The government procurement process typically follows a very direct set of evaluation criteria that seeks the best value-based price and the bidder’s previous experience with similar projects. It’s a process designed to minimize costs and maximize output. For the most part, it’s what people expect our government to do with hard-earned tax dollars. But there’s a growing movement that the value of our spending isn’t just dollars and cents. Changing how we spend can increase our quality of life and address social, cultural, economic, and environmental issues. It’s not a new concept. However, it’s not so simple for governments to pick and choose who they buy goods and services from. We have strict rules for government spending that take into account international trade agreements, interprovincial agreements, industry regulation, and government policy. It’s encouraging to see the City of Peterborough hosting public engagement sessions on a new social procurement process. The next information session is online on Aug. 16 from 11 am to 12:30 pm (more details at connectptbo.ca). The City invites people to: Join the conversation on how the City of Peterborough can use social procurement to leverage its existing purchasing activities to contribute to the success of the community’s economic, environmental and social goals. Social procurement can help shape an inclusive, vibrant, and healthy community. Social procurement can create new revenue streams for local businesses and social enterprises, leverage local know-how and assets, and facilitate new ways of working together for community benefit. The federal government has been exploring options for years, including a comprehensive study to look into its own opportunities for socially responsible procurement launched last year. The Government of Ontario launched its own Social Enterprise Strategy back in 2016. Municipalities across the country have begun to follow suit. It’s not about charity. It’s about taking a good look at the current “lowest bidder” system and realizing that we can do things better. For local businesses, this offers a new opportunity to compete on municipal contracts. No one knows our community like its locals when it comes to addressing specific needs and opportunities. The City of Peterborough is not able to legally prefer local bidders — government policy dictates this, plus we have trade agreements that require a level playing field for everyone. But those local businesses who are willing and able to adapt can get a leg up on the out-of-town competition by either taking on social enterprises themselves or partnering with our vast network of local non-profits and charities. It’s important that we engage with the City to provide meaningful input. Efficient and effective spending should be the priority for government — but it’s time to re-evaluate and expand our idea of what that means. We can build a stronger, more vibrant community when we use our resources to work toward a more inclusive set of goals, aspirations, and ambitions. It’s time to include social procurement in government policy. Property taxes isn't the most exciting subject, but it’s one that affects us all in various ways. It’s also a system in need of an overhaul. Municipalities across Ontario have made public statements over the last year regarding the impact of COVID-19 on their budgets. The weaknesses of the current system have been brought to light through this crisis. The Ontario Chamber of Commerce recently issued a report titled Better Budgets: Bolstering the Fiscal Resilience of Ontario’s Municipalities. It lays out 14 recommendations for the Province of Ontario for overhauling the property tax system. The full report is available at occ.ca. This pandemic has hit all levels of government in different ways, but the challenges for municipalities is that they are structured and governed by the Province, which has left them inflexible and vulnerable to market fluctuations. And the market has fluctuated. Federal Accountability Office of Ontario figures show municipalities across Ontario are facing a budget shortfall of $4.1 billion in 2020 and an additional $2.7 billion in 2021 due to lost revenue and increased costs. Despite cost-saving measures and reserves, it’s believed municipalities don’t have the revenue to absorb the costs of this health crisis nor are they allowed to run the deficits needed to make up the difference. Stuck between a rock and a hard place, municipalities are being forced to make some difficult budgetary decisions that likely aren’t to the benefit of the community. Municipalities depend on attracting and retaining businesses to maintain their financial health and sustainability. Businesses depend on municipal investments in transportation, utilities, housing, facilities, and the local labour market. The property tax system was meant to share the costs based on the services used. Larger properties would be used by larger families or businesses. However, there is a disconnect in the real estate market between the resale value of land from its actual economic value to the community. A hot real estate market drives up taxes regardless of whether municipal service costs go up. Businesses require a level of stability to flourish, especially when it comes to large financial considerations. The current property tax system is unpredictable for commercial properties, with taxes varying significantly throughout a four-year assessment increment period. Speeding up the assessment appeals process, creating more frequent assessments, or partially indexing assessments to a benchmark like inflation could increase confidence. Business confidence leads to more investment, which leads back to greater tax revenues for the government. The current commercial property tax assessment system assigns value based on the highest and best use for the property. That means it doesn’t matter if the current businesses on a property happen to be a small café and a hair studio — they’re paying the taxes of a commercial office tower that the site is zoned for. The report from the Ontario Chamber of Commerce outlines numerous other recommendations that impact the effectiveness of the property tax system, including: • A review of user fees, permits, licenses and fines to better reflect changes in demand • Reforming the arbitration system for police services to include the capacity of municipalities to pay • Improving accountability with the Municipal Accommodation Tax • Reviewing the transfer system and cost-sharing programs • Adhering to a pay-for-say principle when deciding what level of government is responsible for funding the service • Having municipal governments issue modified accrual budgets at year-end • Identifying and championing opportunities where municipalities can work together with shared needs and priorities There is only one taxpayer, regardless of which government body is collecting it — but how we are taxed is just as important as the amount. How we are taxed ensures that we are all paying our appropriate share. It should maximize efficiency for the taxpayer. It should also make sure government organizations have the funds and tools they need to do their job effectively. Effective and efficient government should always be the goal when collecting our tax dollars. Municipal governments are by far the most hands-on in our day-to-day life. The flaws of the property tax system are going to impact the services in our community, hold back business investment, and ultimately, hold back our economic recovery. |
AuthorThe Peterborough and the Kawarthas Chamber of Commerce acts as a catalyst to enhance business growth, opportunity, innovation, partnerships and a diverse business community. Archives
October 2024
Categories |
Copyright Greater Peterborough Chamber of Commerce. All rights reserved.
175 George Street North, Peterborough, ON, K9J 3G6 Phone: (705) 748-9771 | (705) 743-2331 Home | Calendar | Site Map | Privacy | Accessibility |