Entries in 2014 (3)

Wednesday
Jan282015

Economic Outlook 2015: Strong growth in 2014 means modest growth in 2015

After a strong 2014, economic growth in Peterborough is expected to slow over the next two years, according to a new economic outlook from the Greater Peterborough Chamber of Commerce and the Credit Unions of Ontario.  

Economic conditions in Peterborough exhibited surprising strength last year, as residential and non-residential investment surged and total employment grew by 9 percent. As a result, the unemployment rate dropped slightly in 2014 to 8.3 percent. 

On balance, employment growth is forecast to ease considerably following last year’s strong growth, with forecast gains of 1.0 percent in 2015 and 1.8 percent in 2016. Growth will be underpinned by a general improvement in economic conditions in the province and higher tourism levels. Unemployment is expected to decline slightly to 7.8 percent by 2016. 

According to the outlook, job creation in the area is forecast to record modest growth over the next two years as non-residential construction activity begins to taper off. While the investment flows of previous projects in the broader region should continue to benefit the economy, the value of non-residential building permits is expected to decline this year by about 30 percent before recovering in 2016.

Stronger U.S. demand and a weak Canadian dollar should buoy the region’s manufacturing sector, while tourism-related industries such as accommodations and food services, are expected to benefit from increased visits from outside the region.

“The challenges faced by Peterborough businesses in the past number of years have forced some companies to reach into other segments of the economy to fill in space left by traditional clients”, says Stuart Harrison, President and CEO, Greater Peterborough Chamber of Commerce. 

Some recent developments bode well for Peterborough’s future prospects. The new Nordia call centre opened in November 2014 and management plans to hire about 400 people in the first 12 to 18 months of the facility’s operation. Minacs, another call-centre operation in the city, will also be hiring another 60 people in the coming months. In addition, the GE Canada plant in Peterborough has won a tentative contract from TransCanada Corp. to build electric motors for the Calgary-based company’s Energy East pipeline project. The contract win for the plant follows the $65 million modernization of the facility over the past five years and is expected to create 250 jobs at its Peterborough facility and across its local supply chain over a two-year period. 

“It’s anticipated recent and long-term investments in transportation will have a positive economic impact on the Peterborough area”, adds Harrison. “The announcement of the construction of the 407 to the 35/115 expected to start in the fall and further growth at the Peterborough Airport will continue to open Peterborough to new markets and introduce new markets to Peterborough.”

Population growth, which is primarily attributed to net positive flows of people from other parts of the province, is forecast to rise to 0.7 percent in 2016. 

On the housing front, sales in Peterborough are forecast to increase to approximately 1.9 percent in 2016. Demographically driven demand and low interest rates have generated a stable environment for the regional housing market, which should help home prices rise moderately over the forecast horizon. 

Key Facts and Highlights:

 

  • Population growth, which is primarily attributed to net positive flows of people from other parts of the province, is forecast to rise to 0.7 percent in 2016. With more retired people moving into the area, less interprovincial outflow, and improving employment growth, total net migration is seen rising above 3,000 persons in 2016.
  • Housing sales in Peterborough are forecast to increase to approximately 1.9 percent in 2016. Demographically driven demand and low interest rates have generated a stable environment for the regional housing market, which should help home prices rise moderately over the forecast horizon.
  • Unemployment is expected to decline slightly to 7.8 percent by 2016 compared to 8.3 percent last year. 

 

 

 Download the full Economic Outlook  

Comment through the "Peterborough Chamber" group of LinkedIn.
Wednesday
Dec032014

Policy Forum 2014: Creating a cohesive culture of entrepreneurial success

How to channel the energy of a group of people dedicated to their community is the challenge we face in Peterborough.  There is no doubt of the existing enthusiasm and passion for Peterborough.  A recent forum held by the Young Professionals Group (YPG) of the Peterborough Chamber of Commerce with 45 business and community leaders proved that fact.  The group drew the conclusion that the main goal of forums such as this is to bring some or many of the ideas to fruition.  

The forum, held at the Holiday Inn Peterborough Waterfront, was based on a Don Tapscott article published in the Toronto Star on Friday, October 17, 2014.  In the article Tapscott, who is also the Chancellor of Trent University, a best-selling author and considered one of the leading thought leaders in the World, identified seven key areas to improve the functionality of a municipality.  Those areas are: 

  1. Promoting Entrepreneurship to Achieve Prosperity 
  2. Open Government
  3. Turning Public Safety Inside Out
  4. Rethinking Transportation 
  5. Creating a Sustainable City
  6. Transforming Social Services
  7. Reinventing Local Democracy

Each table at the YPG Policy Forum consisted of six or seven people including a table lead to guide discussion. Each table wrote down their ideas and then presented them to the entire room. There was also opportunity for some overall comments before closing for the evening.  Over the next several weeks we’ll detail those discussions for you, identify what is currently happening in those seven areas and opportunities for action.  

This is a fluid political time in Peterborough’s history with a new term of city and county council getting underway, a recent provincial election that saw the province move from a minority government to a majority government, and a general election slated for next year that will see the number of ridings increase across the country, including several new ones for the Peterborough area.  

From an economic standpoint, this is a geographical area evolving from more than a century of large manufacturing to a community that has a more diverse economic base with a more advanced manufacturing core.  As a community, we are also working to decipher employment patterns that have emerged showing a 6% swing in unemployment rates from spring to fall each year.  While one can rightly question the accuracy
of the numbers, Chamber community partner, Peterborough Economic Development (PED) has identified through their strategic planning process that one possible way to temper the unemployment rate swing is to focus and foster a culture of entrepreneurship.  It makes sense, as the entrepreneurial spirit is the backbone of Peterborough and all the other communities in Ontario.  It is the backbone of the Chamber of Commerce, which gives those entrepreneurs a voice to government and their communities.  Economists across the country, including those at the Canadian Chamber of Commerce, have identified that the majority of job creation in the next five years is going to happen through companies with five employees or less.  

With an eye on entrepreneurship, here is what came of the roundtable discussion with table lead, local entrepreneur and PED Board Member Michael Skinner.  

Four trends surfaced during this discussion:

  1. Attitude
  2. Collaboration
  3. Youth 
  4. Servicing Entrepreneurs

Attitude:  

The community must realize that the chance of a large company descending on Peterborough with hundreds of jobs waiting to be filled is not likely to happen. From this realization, the attitude of the entire area can then focus on entrepreneurship. The group also identified a need for a more positive attitude to partnering with other groups to breakdown silos, and the willingness to change and adapt to the times. Ultimately, the group reiterated the call that fostering entrepreneurship can lead to solutions for economic challenges.

Collaboration: 

The group revealed that next week there will be a youth entrepreneurship funding announcement for Trent & Fleming.  The Cube at the Greater Peterborough Innovation Cluster (GPIC) is connecting resources at Trent, within the community through the Peterborough Region Angel Network (PRAN) and established businesses and budding entrepreneurs.  The group identified the need for better connection between MPs and MPPs and business, and between agencies with any ties to the entrepreneurial world. 

To that point, the Greater Peterborough Chamber of Commerce is currently starting the planning process for a Business Summit in 2015 with a focus on the entrepreneur.  

Youth: 

From their notes the group has identified this demographic as a resource to be tapped.  Not only will there be the funding announcement mentioned above, but through a dedicated effort to encouraging entrepreneurship there is opportunity to have Trent and Fleming students choose Peterborough to start their business instead of taking their education and leaving the area.  There is more opportunity for mentoring, more opportunity for groups such as Junior Achievement (JA) to reach into high schools and infuse students of all ages with the entrepreneurial bug.  Trent University has also included youth entrepreneurship as a pillar of its strategic plan.  With Fleming College and Trent University both looking to attract international students, the Conference Board of Canada study that shows Peterborough has the highest number of immigrant entrepreneurs in the county is a valuable resource to use as a draw to schools and the Peterborough area. 

Servicing Entrepreneurs:

To create this culture of entrepreneurship the table discussion zeroed in on the importance of centralizing all information related to the sector.  They agree it could be a virtual space, a physical space, a combination or both.  They would like to see a centralized calendar for networking and mentoring events as they believe networking and mentoring are “essential to the entrepreneurial formula.” Centralization of the many planning documents that would affect a person looking to start a business was also on the minds of the group. The current host of plans is available on the City of Peterborough website at the following address: http://www.peterborough.ca/Business/Studies.htm. The group would also like to see more encouragement of entrepreneurs in all areas of Peterborough, from downtown to the Lansdowne and Chemong business corridors. They identified the Bears' Lair competition as a program that is currently highlighting new and budding entrepreneurs.  The Community Futures Development Corporation (CFDC) was also identified as a resource for entrepreneurs to tap into. 

Interestingly enough, the end vision on entrepreneurship has deep roots in what is currently happening in the Peterborough area. We are seeing collaboration between many of the groups mentioned (the Chamber, Trent, Fleming, PED, GPIC, Junior Achievement, CFDC), however, the time is right for a more coordinated and defined strategy - a strategy that presents a united front, reinforcing the commitment to entrepreneurship success.   

Next week: Open Government and Reinventing Local Democracy.  

Comment through the “Peterborough Chamber” group of LinkedIn. 

Tuesday
Nov182014

OCC Rapid Policy Update: Our take on the Government's 2014 Fall Economic Statement

 

On Monday, November 17, 2014, the Government of Ontario released its 2014 Ontario Economic Outlook and Fiscal Review, which provides an update on the government’s finances and progress on key commitments since the release of the 2014 Budget. In October, the province’s unemployment rate declined to 6.5 percent, its lowest rate since 2008. The province has also seen real gains in GDP, exports, and household consumption since the beginning of the year.

The government remains committed to eliminating its budget deficit by 2017-18. It continues to project a deficit of $12.5 billion for the 2014-15 fiscal year, with significant reductions in the deficit thereafter.

The government plans to meet this target despite a substantial decline in revenue. Projected revenue for 2014-15 is $509 million less than previously forecasted in the 2014 Budget. With projected government expenses declining by $208 million since the 2014 Budget, the government is using $300 million from its reserve fund to make up the difference. 

 

Path to a Balanced Budget

In the Fiscal Review, the government highlighted the four key components of its plan to reach a balanced budget by 2017-18. These are:

1. Reviewing and transforming programs

The government's annual program review savings targets remain at $250 million for 2014-15 and $500 million for 2015-16 and 2016-17.

OCC Position: The government expressed willingness to pursue “other tools” to meet its goal of balancing its books by 2017-18. We feel that a more robust program review and more ambitious targets are required prior to any revenue increases.

2. Managing compensation costs

Government has negotiated zero or minimal salary increases in recent agreements with public sector unions.

OCC Position: We support government's efforts to hold the line on public sector salaries. 

3. Ensuring everyone pays their fair share of taxes

According to government figures, the province generated over $380 million in additional revenue in 2013-14 by enhancing the integrity of the tax system. The government is taking action to tackle the underground economy. This includes: 

  • Pilot programs to strengthen compliance in high-risk sectors
  • Working with the federal government to identify new measures to curtail corporate tax avoidance
  • Stepping up efforts to curb contraband tobacco by establishing oversight of raw leaf tobacco, effective Jan. 1, 2015

OCC Position: We support a crackdown on the underground economy and on tax evaders.

4. Unlocking the value of provincial assets

The Premier’s Advisory Council on Government Assets will present its final recommendations in advance of the 2015 Budget. The Council is investigating how to generate the most value out of the LCBO, Hydro One, and OPG.

OCC Position: We support government's efforts to deliver more value from provincially owned assets, but these efforts should be expanded to more government assets in a regularized (not one-off) process. 

 

The Federal Funding Gap

In his address to Provincial Parliament, the Minister of Finance called on the federal government to reform the federal transfer system to treat Ontario fairly. The gap between what Ontarians pay in federal taxes and what they receive in federal funding and transfers is $11 billion, or $850 per Ontarian. He stressed that more of the money that comes to the federal government from Ontarians should be reinvested back into Ontario.

Specifically, the Minister called on the federal government to match the province’s $1 billion commitment to Ring of Fire investment, and increase federal investment in public transit.

OCC Position: We strongly encourage the federal government to reform fiscal transfers and programs that shortchange Ontario, such as Employment Insurance.

We also encourage the federal government to match the provincial investment in the Ring of Fire and to invest more in productivity enhancing infrastructure, such as transit.