2022 Ontario Economic Report

The Ottawa Board of Trade and the Ontario Chamber of Commerce (OCC) have released the sixth annual Ontario Economic Report (OER) providing regional and sector-specific data on business confidence, policy priorities, and economic indicators, which together provide a unique view on the hurdles ahead. Findings from the OER will help policymakers develop a strategy for the province’s long-term economic recovery and growth. 

Key insights from the 2022 OER include:

• Business confidence increased in 2021 from a record low last year, amid progress on vaccinations and reopening. Overall, 29 percent of Ontario businesses are confident in Ontario’s economic outlook and 57 percent are confident in the outlook of their own organizations.

• More pessimism is observed in smaller businesses, those located in border regions, organizations led by women and people with disabilities, and businesses in the arts, entertainment, and agricultural sectors.

• Business conditions also improved this year, with 38 percent of organizations reporting they had shrunk in 2021, compared to 56 percent the previous year.

• Most sectors (62 percent) are facing labour shortages and expect to continue facing them over the next year.

• The business community’s main policy priorities this year are business taxes and electricity costs. Small businesses are more preoccupied with financial support such as commercial rent relief, while larger businesses are more focused on long-term infrastructure, regulatory, and workforce development issues.

• Remote work arrangements are expected to partially continue in 2022. While most organizations are optimistic about technology, capital costs and access to digital skills are pervasive barriers to technology adoption at the organizational level.

• Most businesses value employee health and well-being as well as diversity and inclusion, yet fewer organizations have formal strategies in place to support these objectives.

• Ontario’s economic indicators began to see some positive momentum in 2021 after hitting a record low in 2020. Real GDP rebounded by 4.2 percent and is expected to grow another 4.1 percent this year. Meanwhile, employment grew 4.9 percent and is forecasted to see 4.2 percent growth in 2022.

• However, much of this momentum is tempered by labour shortages, global supply chain disruptions, and inflation, which suggest a difficult road ahead for businesses and households.

• All regions except Northeastern Ontario saw positive employment growth in 2021, though several regions have yet to offset the major job losses seen during the first year of the pandemic.

The full report is available on the Ontario Chamber of Commerce website.