Ontario’s economy is expected to achieve a 3% growth in GDP based on the province’s performance this year. Previous growth projections expected a 2.6% increase to the province’s GDP, however favourable conditions enabled businesses to increase their competitiveness and drive sales, both domestically and internationally.
This is just one of the many trends identified in Ontario Chamber of Commerce’s Ontario Economic Update 2016 report. The annual report identifies provincial trends, but more interestingly, the differences in regional economic development. Some of the key performance measurements include population growth, size of workforce, employment rates, the housing market, and GDP.
Ontario small and mid-sized businesses have lots to be excited about moving into 2017. Many of the top barriers to growth are being lifted, including access to skilled labour, new markets, and innovative/efficient equipment. If Ontario businesses use the year ahead to exploit these opportunities, the Ontario economy will continue to strengthen.
How Ontario’s Economy Grew Stronger in 2016
Despite slow growth in northern Ontario, other parts of the province performed quite well and are trending to have another successful year in 2017. Overall, conditions are improving across the province and will encourage continued growth.
“Ontario’s economy is not immune to the difficulties hitting the Canadian economy, but nevertheless, has been a pillar of growth.”
– Marie-Christine Bernard, Associate Director of Provincial Forecasting, Conference Board of Canada
Given trends seen in 2016, there are two reasons to be optimistic about the year ahead:
1. Size and Skill of the Workforce
- Population Growth: Ontario’s population is projected to increase by over 132,000 in 2016 due to high immigration and low inter-provincial outflow of current residents. This could be because of higher confidence in the job market; Ontarians feel they have an opportunity to make a comfortable living in the province.
- Workforce Growth: Ontario businesses may create upwards of 102,000 jobs in 2016. Luckily, Ontario’s growing population of skilled labourers will be able to support this demand for talent. Immigration and Ontario’s network of colleges and universities are supplying more skilled labourers; this reduces talent gaps in many of the province’s fastest growing industries.
- Unemployment Decline: Ontario’s unemployment rate is projected to average 6.6% in 2016, 0.3% less than in 2015. This trend is expected to continue through 2017, where unemployment could fall to as low as 6.3%. This employment surge will create benefits throughout the economy since more people will spend and invest earnings.
2. International Competitiveness and Export Growth
- Export Growth: Ontario’s exports are forecast to hit $16.5 billion (2007 CAD) in 2016, as opposed to just 11.2 billion in 2015. As we approach 2017, Ontario could see the value of net exports increase to $20.4 billion and continue similar growth for years to come. A low Canadian dollar will sustain export growth, particularly within the automotive sector.
Regional Differences Will Cause Varying Economic Success
OCC’s Economic Update report also identified how regional economic performance will vary in the upcoming year. Despite a strong provincial outlook, not all regions of Ontario will experience consistent growth:
- Southwestern Ontario: High growth, led by manufacturing and the information and communications technology (ICT) industries. These organizations will benefit from a strong American economy and increased technology investment.
- Central and Eastern Ontario: Modest growth, sustained by agriculture and manufacturing. Economic leaders in this region will flourish from a stronger domestic economy and demand.
- Northern Ontario: Limited growth, caused by export-driven natural resource industries like forestry, mining, and metal products. These are vulnerable to global prices that could drop further in the coming year.
Thankfully, the government recognizes these regional differences when creating small business funding programs. They also approach economic development on a regional basis, ensuring businesses across Ontario have fair access to funds that will support investment.
Ontario Government Funding for Small Businesses
Ontario small and mid-sized businesses who are making investments in 2017 should consider the grants and loans that are available specifically for their region. Because these programs are regionally-focused, there’s less competition for funds and businesses have a better chance for approval. Some of these regionally-focused Ontario government grants include:
Southwestern Ontario Development Fund (SWODF) Government Funding
The Southwestern Ontario Development Fund (SWODF) supports investments that have a positive impact on an organization’s productivity, innovation, and exports. This includes facility expansions and the purchase of innovative or productivity-boosting equipment.
Businesses in southwestern Ontario may receive up to 10-15% of their project’s eligible expenses to a maximum grant of $1.5 million.
Eastern Ontario Development Fund Business Grants & Loans
Likewise, the Eastern Ontario Development Fund (EODF) supports capital investment projects, just for businesses located in eastern Ontario. The program is administered identically to the Southwestern Ontario Development Fund, and will reduce the cost of projects that bring investment and high-value jobs to the region.
EODF grants provide businesses with up to 10-15% reimbursement for eligible project expenses, to a maximum $1.5 million.
Northern Ontario Small Business Funding
Businesses in northern Ontario have access to several sources of funding for regionally-focused grants and loans. The Northern Ontario Heritage Fund Corporation (NOHFC) and Federal Economic Development Agency for Northern Ontario (FedNor) administer most of the programs.
Northern Ontario government funding often awards economic developments that diversify the region’s economy and add jobs. Funding programs will award activities like capital equipment purchases, development of marketing materials, and hiring a recent post-secondary graduate.
How to Access Ontario Government Funding in 2017
Ontario small businesses should be excited for the economic growth that is taking place across the province. Although not all areas of Ontario will experience the same momentum, government grants and loans are readily available to support a range of strategic investments.
Businesses should consider how provincial and federal grants can be used to optimize their financial strategy. Download the Canadian Small Business Funding Guide to learn more about sources of funding and how to build a government funding plan.
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