After a steep 5.6 per cent drop in provincial GDP growth last year, the Ontario Chamber of Commerce predicts a "moderate" 4.8 per cent rebound in 2021 fuelled by expectations of a vaccination rollout and a re-opening of the economy.
That was one of the highlights in the chamber's annual Ontario Economic Report released on Jan. 28, highlighting the year that was 2020 and what lies ahead.
“The current health and economic crisis have had a considerable negative impact on our economy," said chamber president-CEO Rocco Rossi in a news release.
"Only 21 percent of businesses are confident in Ontario’s economic outlook—a historic low—reflecting the stark reality in which businesses continue to grapple with the financial and logistical challenges of operating under a pandemic."
This year’s report said those businesses that require considerable face-to-face contact have been the hardest hit, namely the accommodation and food services; arts, entertainment, and recreation; and retail sectors.
The chamber's findings indicate that employment growth declined throughout the province with women, lower-income, racialized, new immigrant, and younger Ontarians suffering the biggest job losses. Every region of the province felt the impacts of the recession, though some considerably more than others.
“No business, region, sector, or demographic should be left behind in the pursuit of economic recovery and growth," report co-author Daniel Safayeni said in the release.
"Support programs and pro-growth policies should be targeted toward those experiencing the most pronounced challenges. A focus on re-skilling as well as widespread access to broadband infrastructure and capital will be necessary to the revival of small business and entrepreneurship as well as an inclusive and robust economic recovery.”
The report said the pandemic has had a disproportionate impact on small businesses and entrepreneurs as well as specific regions, sectors, and demographics, highlighting the major vulnerabilities and opportunities Ontario will face in the year ahead.
Among the chamber's findings from 2020, only 21 percent of respondents in its survey of members expressed confidence in the province's economic outlook. Less than half of Ontario businesses (48 percent) are confident in the outlook of their own organizations over the next year.
Small businesses are more pessimistic about Ontario’s outlook than larger ones. Only 20 percent of small businesses expressed confidence in Ontario’s economy, compared to 27 percent of medium and large businesses.
Many survey respondents said their organizations shrank between April and September as employment growth declined throughout the province in 2020, with 47 percent of organizations indicating they let employees go due to COVID-19.
“The prolonged nature of the crisis, rising case counts, and uncertainty around vaccine deployment timelines have taken a toll on employers and Ontarians across the province. Yet, Ontario has a proven track-record of resilience and recovery. Our long-term prosperity will depend on all levels of government, business, chambers of commerce and boards of trade working together toward economic recovery,” said Rossi.
