Ontario Chamber of Commerce – 2023 Ontario Economic Report
- Economic Development continues to provide businesses with advisory services through direct business strategy consultations and corporate calls, seminars and events, and assistance to businesses expanding in Vaughan
- Business confidence has dropped to a new low with only 16 per cent of organizations expressing confidence in the outlook of Ontario’s economy in 2023
- Inflation, supply chain issues and labour shortages continue to be the primary concern for business
- While business confidence in the economy is low, 53 per cent of business owners are optimistic about the outlook and growth of their own organizations
- At a provincial level Ontario’s economy is forecasted to decrease by 0.4 per cent in 2023
- All regions of Ontario saw moderate-to-strong growth in both population and employment in 2022 and are expected to see continued growth in 2023.
The Ontario Chamber of Commerce released its annual Ontario Economic Report on February 7, 2023, which provides unique insights into the perspective and experiences of businesses across the province. The 2023 OER reveals the effects of prolonged economic uncertainty and a shifting business landscape. The report focuses on labour shortages, inflation, and business confidence. The OER is driven by data collected through the chambers business confidence survey and regional economic forecasts.
Business Confidence and Growth
Business confidence has dropped to a new low with only 16 per cent of organizations expressing confidence in the outlook of Ontario’s economy in 2023. While business confidence in 2021 saw a slight uptick in business confidence, the drop in 2023 represents a widespread consensus that Canada’s economy is expected to slow throughout 2023. Inflation, supply chain issues and labour shortages continue to be the primary reason for low business confidence.
While business confidence in the economy is low, 53 per cent of business owners are optimistic about the outlook and growth of their own organizations
While business confidence at the provincial level has waned, the confidence of business owners in the growth of their own businesses holds steady with 45 per cent of organizations saying they grew in 2022 and 53 per cent expecting growth in 2023. This improved growth highlights a rebound in consumer demand and spending from earlier stages in the COVID-19 pandemic, even as low confidence in the broader economy suggests an awareness of the headwinds they are up against.
Labour shortages and skills gaps are continuing to damper business confidence. While labour shortages have been noted across the economy, sectors in which they are most pronounced included mining, utilities, educational services, construction, and accommodation and food services.
Smaller organizations are less likely to report shortages than larger ones (49 percent vs. 85 percent), likely because they have fewer spots to fill by virtue of their size.
Skills gaps in Ontario’s labour market are being driven by several factors – including an ageing population, immigration backlogs and increased demand for skilled trades labour to support housing and other infrastructure development projects. In the accommodation and food services sectors, many workers have retrained during the pandemic and entered new industries. In the health care sector, shortages are both a cause and a consequence of burnout within an overstrained system. skilled trades labour to support housing and infrastructure development projects.
56 percent of organizations expect to face a labour shortage over the next year and 66 percent expect to see shortages in their sectors.
Labour shortages were highlighted as being nearly twice as common in organizations that are operating mostly or fully in-person compared to those that are operating remotely (59 per cent vs. 31 per cent). This is driven partly by sector-specific variations (e.g., construction and restaurants are necessarily in-person and reporting large gaps) but may also reflect shifts in jobseekers’ preferences towards more virtual and hybrid working arrangements.
Vaughan Economic Development
Vaughan Economic Development remains committed to business retention, expansion, and attraction efforts that focus on a variety of industries to encourage further diversification of Vaughan’s economy. Economic Development continues to provide businesses with advisory services through direct business strategy consultations and corporate calls, seminars and events, and assistance to businesses expanding in Vaughan. In coordination with the Corporate and Strategic Communications department, Economic Development will continue to promote services, programs, and initiatives that support Vaughan businesses as they navigate changes in the economy. Economic Development offers a suite of programming tailored towards supporting new and existing businesses:
- B2B Industrial Tour – Vaughan-based companies with 20 employees or more and operating within the industrial facility sector, such as a warehouse, factory or distribution centre, can register to be matched with a company to tour each other’s facilities and share operational best practices, policies and business challenges.
- Better Your Business – The Better Your Business program is designed to increase awareness of the resources available to help Vaughan’s business community improve their processes, practices and policies and ensure they are socially and environmentally responsible.
- Better Your Business | Tourism Diversity Program – Tourism Vaughan provides up to 24 tourism-related businesses with an opportunity to plan and develop more inclusive and diverse tourism products, services and experiences.
- Talent City Vaughan – The program helps residents and Vaughan-based businesses access and undertake opportunities to enhance workforce skills. Talent City Vaughan provides micro-grants of up to $10,000 for eligible non-profit community and social service organizations delivering skills development and training to Vaughan talent.
- Starter Company Plus – The Vaughan Starter Company Plus program is designed to help businesses start, grow, or expand. Qualified program participants will receive tailored training and mentorship and will also have the opportunity to apply for a provincial grant of up to $5,000.
- Summer Company Plus – Access mentorship from Vaughan’s business community, tools, services and workshops to make your goals a reality. This is your opportunity to get up to $3,000 in provincial grant funding to kick-start your business. Apply now to the Summer Company program that prepares young entrepreneurs with a pipeline of tools, skills, connections and resources required to succeed.