Pre-Budget Submission to the Standing Committee on Finance & Economic Affairs of the Ontario Legislature

The Greater Kitchener Waterloo Chamber of Commerce and Waterloo Region – A Profile

The Greater Kitchener Waterloo Chamber of Commerce serves over 1700 members representing all sectors of the Waterloo Region economy. Our membership includes small, medium and large employers in one of Canada’s most progressive and innovative regions.

Our economy is among the most diverse in Canada, with concentration across advanced manufacturing, financial services, automotive, post-secondary education and information technology. Industry analysts have frequently cited this diversity as the fundamental strength of Waterloo Region’s globally successful and entrepreneur-driven business sector.

Economic Projections for Ontario and Waterloo Region

The recent Provincial Economic Forecast from TD Economics1 indicates that nationally, activity is consistent with previous projections that growth will decelerate in all regions of Canada during 2018-19.

In 2017, heavy activity over the first half of the year in Ontario, Quebec, Alberta and B.C. preceded a third-quarter slowdown particularly in provinces that are dependent on exports. However the past year closed with renewed housing activity in Ontario and B.C. and increased manufacturing exports across Ontario.

Any changes to NAFTA present risks to exporters and the auto sector in particular given that significant changes have been proposed. The pace of current negotiations makes it highly unlikely that any revisions will be effective for the current calendar year with 2019 more likely for implementation. Overall, TD Economics observes, the Ontario economy is strong despite some slowdowns.

Similarly RBC Economics2 notes that rising interest rates and an uncertain trade environment with the United States present challenges for Ontario to maintain the strong growth rates of the past four years. Their prediction is that provincial GDP growth will drop from a seven-year high of 2.9 percent in 2017 to 2.1 percent in 2018, followed by 1.8 percent in 2019.

RBC also predicts that heavy investment into infrastructure by all levels of government will continue to fuel provincial growth, primarily through public transit and road projects.

The Conference Board of Canada conducted their 2017 Waterloo Region Business Outlook event in Kitchener on September 7 of last year. The analysis provided by Senior Vice President and Chief Economist Craig Alexander noted that economic growth across Waterloo Region has outpaced the provincial level for ten of the past eleven years. However, growth has slipped to approximately 2 percent annually between 2016 and 2018, down from a three percent average over the previous six years.

Even in the midst of this slowdown, Waterloo Region continues to attract newcomers. Net immigration reached a ten-year high of 4,200 people in 2016 and another 3,600 were anticipated for 2017. Slower manufacturing activity was expected in 2017 with acceleration predicted for 2018.

read the full report here: Submission – Janaury 18 2018oc