Passenger rail service to Peterborough and beyond has cleared another stage toward construction.
Transport Canada announced on July 20 that the Request for Qualifications it issued back in April had concluded and three proponents were selected as eligible to bid on the upcoming Request for Proposals. The project will link Toronto, Peterborough, Ottawa, Montréal, Trois-Rivières, and Québec City with regular passenger rail service on dedicated passenger lines. It will require hundreds of kilometres of new track, refurbishment of old rail beds, new or improved crossings at every road it crosses, agreements with property owners, new stations, and a lot of planning. Creating a proposal for a project of this scale will require significant resources, which is why each of the three proponents are conglomerates made up of large construction and transportation industry companies. The following groups have been invited to move to the Request for Proposals (RFP) stage: • Cadence (CDPQ Infra, SNC-Lavalin, Systra Canada, Keolis Canada) • Intercity Rail Developers (Intercity Development Partners, EllisDon Capital, Kilmer Transportation, First Rail Holdings, Jacobs, Hatch, CIMA+, First Group, RATP Dev Canada, Renfe Operadora) • QConnexiON Rail Partners (Fengate, John Laing, Bechtel, WSP Canada, Deutsche Bahn) Next up will be one of the most exciting phases in the project: Request for Proposals. Expected to launch this September, proponents will be expected to draw up their plan to meet the goals of VIA HFR and Transport Canada with a technically and commercially feasible solution that includes both a business and management plan. The proposals should answer a lot of the big questions about this project, including: cost, where the lines will run, whether there will be high-speed sections, construction timelines, whether any additional towns/cities will get a stop, where the line will connect to Toronto, and whether the lines will twin alongside freight and include much-needed freight line refurbishment. Additionally, the project will be required to meet reconciliation goals, as per Transport Canada: “Advancing reconciliation with Indigenous Peoples is a priority for the Government of Canada, and this is why early engagement with Indigenous communities is already underway. As part of the RFQ process, respondents were required to demonstrate their capacity to work with the government to create mutually beneficial, socio-economic development opportunities for Indigenous Peoples. Indigenous reconciliation is critical to the success of the HFR project and will be integrated in all phases of the project.” The government expects to evaluate the proposal submissions in summer of 2024. Following that, a case will be made to our federal government to fund it. Considering the years and hundreds of millions of dollars that will have already been spent at that point, it should be a choice between different business models and levels of service. Ideally, the business plan will show a high return on investment. Afterall, VIA’s big push for this project and its first dedicated passenger tracks is that they will be able to provide a higher level of service, which should equate to much higher return on investment and push the crown corporation toward profitability. As well, this project promises to move us forward in fighting climate change. The proposals should lay out a case for the amount of emissions they will help us cut while improving intercity connectivity. The rail network should be electric (or at least almost all electric), providing people with sustainable and environmentally-friendly transportation. We still have a long way to go before passenger trains will stop in Peterborough, but we have come a long way in the last few years. If you want to read up a bit more on the history of how we got here, check out our Voice of Business column from March 1. Canada’s labour crunch is showing signs that it’s beginning to ease up.
Labour data from the Canadian Chamber of Commerce Labour Force Survey June 2023 shows a slight increase in unemployment, gains in job growth in Ontario, and the slowing of wage growth. Marwa Abdou, Senior Research Director at the Canadian Chamber of Commerce, states: “Canada’s labour market is turning a corner with June’s data. Coming in at the highest level in over a year, Canada’s unemployment rate edged up to 5.4%. We’re also seeing average hourly wages coming off the boil, with their slowest growth in over a year. However, the headline jobs number was strong, exceeding market expectations with a gain of 60K jobs (vs. 20K consensus), driven by full-time employment. Overall, the market is showing signs of strength and resilience, although wage growth is moderating while still remaining high.” Last summer, unemployment hung at a near-record low of 4.9%. The jump to 5.4% represents a 0.2% increase from May and the highest level in over a year. Meanwhile, the number of people working is increasing with a gain of 60,000 jobs. This job growth comes with an increase in full-time employment. The Labour Force Survey notes that much of the job gains are among men with employment of women largely staying the same through June. The biggest changes in jobs by sector are: • Wholesale and retail trade (+33K) • Manufacturing (+27K) • Health care and social assistance (+21K) • Transportation and warehousing (+10K) • Construction (-14K) • Education (-14K) • Agriculture (-6K) While the jobs gains are welcome news, especially in the wholesale and retail trade sector, the decline in construction, education, and agriculture will be a struggle in those sectors. Only Ontario (+56K), Nova Scotia (+3.6K), and Newfoundland and Labrador (+2.3K) saw increased employment. Prince Edward Island saw a decline of 2,400 jobs while the remaining provinces stayed relatively the same. According to our local Workforce Development Board Eye on the Labour Market – June 2023 report, the top positions being posted by local employers in June were: 1. University professors and lecturers 2. Retail salespersons 3. Other customer & information services representatives 4. Home support workers, housekeepers & related occupations 5. Food counter attendants, kitchen helpers and related support occupations 6. Retail and wholesale trade managers 7. Social and community service workers 8. Cooks 9. Administrative assistants 10. Construction Trades helpers and labourers Unfortunately, labour growth is one of the factors cited by the Bank of Canada in its recent decision to further hike its Overnight Lending Rate by 0.25 basis points to 5%. Sitting at 3.4% in May, Inflation is down from its peak, but not as low as the bank would like. While last month’s labour data is largely positive for most businesses, the current economy and labour market is impacting different sectors and business models disproportionately. Rising interest rates and inflation are putting added pressure on businesses, but hopefully increased access to labour will help ease that burden. The cost of housing is impacting communities of all sizes across Ontario. It’s limiting the buying power of households, impacting businesses’ ability to attract and retain talent, and exacerbating homelessness rates throughout the province.
The Ontario Chamber of Commerce (OCC) recently released Home Stretched: Tackling Ontario's Housing Affordability Crisis Through Innovative Solutions and Partnerships, outlining opportunities for the private, public, and non-profit sectors to explore innovative partnerships and approaches to address housing affordability and supply, and recommendations to build on successful models. The OCC report is in partnership with Desjardins, Cadillac Fairview, and the Federation of Rental-housing Providers of Ontario. It builds on research from a series of regional housing affordability roundtables with a diverse range of housing sector stakeholders. The Government of Ontario has committed to building 1.5 million new homes by 2031 to help mitigate this crisis. This goal will require strategic action and significant collaboration across sectors and all levels of government. It will require the public, private and non-profit sectors to work together. The housing crisis in Ontario has reached a critical point, with significant challenges related to both affordability and supply. Peterborough has not been immune to these pressures, as rising housing costs are impacting many of our businesses' ability to attract and retain labour. At the same time, higher housing costs leave less income available to spend on other goods and services, which directly affects our community’s long-term economic growth. The executive summary from the report sums up a lot about the current situation: While distinct, housing supply and affordability challenges are mutually reinforcing: as mid-high income earners are priced out of the real estate market, they are increasingly occupying market rental housing for longer, contributing to low vacancy rates and rising rental rates. This puts additional downward pressure on the limited supply of more affordable, non-market housing options, where waitlists can reach up to 12 years across the province, further compounding the homelessness crisis. At the same time, social and economic pressures, such as inflation and supply chain challenges, are contributing to rising costs for housing development (which has not kept pace with demand), while hindering mobility along the housing continuum. The OCC report highlights some key statistics: • 211,419 households on social housing waitlists • Provincial rental vacancy rate of 1.8% (3% is considered healthy) • The average house price is now 11.5 times annual household income • Rent has increased by 17.1% over the last year, now sitting at an average of $2,401 • 22,000+ construction job vacancies • 68% of organizations in Ontario continue to report labour shortages in their respective industries • 1.85 million additional units would be needed in Ontario beyond what is already being built or in the pipeline to restore housing affordability The OCC policy brief provides all levels of government and industry with recommendations under the following themes: Labour and Demographics, the Housing Continuum, and Infrastructure and Land Use Planning. The report has 34 recommendations, including: • Continue to establish and deliver on inclusive workforce development and immigration strategies to increase the labour pool needed to build more housing. • Incentivize the development and preservation of affordable housing options along the continuum, including purpose-built rentals, missing middle, student, non-profit, cooperative, and supportive housing. • Support the development and expansion of innovative technologies, data tools, retrofitting, building conversions, as well as mixed-use and climate-resilient green housing. Housing is at the root of a lot of issues we’re facing in Ontario. It’s contributing to the rising cost of living, limiting labour mobility, and leaving people without homes altogether. For the sake of our communities, we need to encourage our governments to work with the private and non-profit sectors to enact a wide range of policies to address our current housing crunch. The Home Stretched report is a good place to start. Technology is continually changing business.
Over the last year, artificial intelligence (AI) has grown in its ability and accessibility to the average person and business. It has caused us to re-think what can be automated, how we shape our customer experience, and how we manage our teams. Many of us have typically viewed automation from a more physical sense. We have machines that weld, paint, and drive heavy equipment by themselves. Now, it seems technology is coming for the creative tasks. At a recent event with local manufacturers and supply chain businesses, automation was a popular topic with a lot of it focused on artificial intelligence taking on administrative and creative work. AI is streamlining training, reporting, and administration. One manufacturing representative noted that there will always be jobs for people that work with their hands — it’s the office side of the business where jobs are being replaced by machines. Chatbots are quickly becoming a regular point of engagement for customers as businesses are looking to save money and improve efficiency. In a time when many businesses are operating with fewer staff than they would like due to challenges attracting talent — efficiency is everything. Hootsuite put together an article for Digital Main Street called 10 Ways an AI Customer Service Chatbot Can Help Your Business. Their suggestions for including AI Chatbots in a business include: 1. Provide customer support in multiple languages 2. Answer repeat FAQs and save your team time 3. Gather customer demographic information 4. Personalized shopping support 5. Convert deals and upsell 6. Anticipate trends 7. Book in-store appointments 8. Improve customer wait times 9. Improve customer retention 10. Provide a consistent user experience The Hootsuite report includes the benefits of using AI for customer support, describing it as: “You can think of AI as one of your star customer support team members — they’re always available, never complain, and are hyper-organized”. Ultimately, AI allows you to support your customers at all hours while meeting their accessibility needs and language of choice, allowing your team to focus on other tasks. The name getting a lot of the attention these days is ChatGPT, but it’s a quickly growing sector with a lot of options and different companies looking to offer the latest and greatest innovation. ChatGPT was recently purchased by Microsoft and included as part of their search engine, Bing, for free. We asked the AI chatbot on Bing how businesses can use AI and it came up with its own explanation: “Artificial Intelligence (AI) has become an essential tool for businesses in recent years. AI can help businesses automate and optimize routine processes and tasks, which can save time and money. It can also help businesses make faster decisions based on outputs from cognitive technologies. AI can help businesses improve their productivity and operational efficiencies by reducing the time employees spend performing a task. This can lead to more work being done in less time, enhancing the company’s overall productivity. AI can also help businesses reach a larger audience and establish long-term customer relationships. This can create customer loyalty, leading to a continuous revenue flow for the company. With time, AI is getting more sophisticated and powerful. So, it’s high time you ditch your legacy systems and integrate AI into your business operations. However, it is important to note that there are risks associated with AI as well. Mistakes can cause massive damage to a company’s infrastructure and reputation…Cyberattacks are extremely common today, so businesses need to be aware of the vulnerability of their systems to cyberattacks.” The availability, accessibility, and accuracy of AI is changing the business landscape. Businesses looking to tap into better use of technology can get free help from our Digital Main Street team. Get in touch with the Chamber and we’ll set you up with an expert. It was refreshing to see three local mayors having an open and candid discussion on local issues last Friday at the Chamber’s Three Mayor’s Breakfast at Lakefield College School.
The Chamber hosted the mayors of the townships of North Kawartha, Selwyn, and Douro-Dummer for a moderated discussion on local business and community issues. As part of the discussion our audience submitted a steady flow of great questions that pushed the conversation ahead on key topics. Finding common ground Most of us can agree on some key local business and community issues. We know our region needs more housing and at a price our local workforce can afford to rent and buy. Businesses in almost every industry are struggling to attract the skills and experience they need from the workforce and we need to get innovative with technology and how we attract and support talent. We need to cut our carbon footprint and preserve the natural environment we love about Peterborough and the Kawarthas. The layers of government One thing the township mayors made clear is that though they may punch above their weight, their size comes with limitations. It’s going to take all levels of government and their affiliated agencies working together to have the most effective and efficient growth. We have a quite a few layers of government locally. We have Townships, which are part of the County, which surrounds the City – both of which are overseen by the Province. We have the federal government, multiple First Nations governments, and school boards. Together, we have close to 70 elected representatives in our region. Just in terms of improving our transportation infrastructure, we have township roads, county roads, and provincial highways. Local issues We can’t have governments working in isolation on important and multifaceted issues. There are a variety of housing needs and different challenges across Peterborough and the Kawarthas, but we need our governments to work together to find efficiencies in the process, attract investment to our region, and collectively deal with some of the barriers. Healthcare is largely provincial in mandate, but we have municipalities actively working to create healthcare facilities and attract medical professionals because our communities need these services to meet the needs of local residents. There is growing discussion about regional bus service through Peterborough and the Kawarthas. We have a pilot project called The Link, which is an example of a successful partnership between the Province, Selwyn Township, Curve Lake First Nation, Community Care Peterborough, and the City of Peterborough. Hopefully this service can be expanded further to help more people get to work and appointments. Employment lands have been an ongoing issue for a while. We are missing out on opportunities because we don’t have enough designated and serviced employment ready to go for prospective businesses to consider for large industry opportunities. It’s unrealistic that any one local municipality is going to be able to satisfy this need on their own. We need to move ahead on this together with a regional mindset. Investing together Many of these issues are themselves intertwined. When we have attainable housing, access to healthcare, and a car-free way to get to work, we can attract more people to our workforce. Our communities are growing. How we grow takes leadership, intentional investment, and cooperation with all levels of government. The workforce crunch has many employers looking at whatever opportunities they can to do more with less, from automation and technology to retraining and upskilling.
One area we can invest is in the mental health of our teams. The last few years have left a lot of people in a situation where they aren’t at their best. The workplace has come a long way in terms of how we talk about mental health and support workers through their journey, but there’s more progress to be made. The Ontario Chamber of Commerce (OCC) and Medavie recently announced a new research project aimed at accelerating health and economic solutions to tackle the surge in mental health challenges since the onset of COVID-19, known as the mental health “echo pandemic.” The Peterborough and the Kawarthas Chamber of Commerce, the OCC, and many other business-focused organizations across the province are committed to supporting investment in the health and well-being of Ontarians, adding to the overall resilience of the economy. As per the OCC: With mental health challenges and illnesses increasingly impacting individuals and communities, the OCC recognizes the urgent need for comprehensive solutions. Through this policy project, the OCC will delve into the socioeconomic impacts of the mental health crisis, from rising health care costs to lost productivity, absenteeism, and presenteeism. The goal is to generate actionable insights and policy recommendations that can guide policymakers, businesses, and the health sector in addressing Ontario’s mental health challenges. “Mental health is a critical component of overall health, with significant implications for individuals, businesses, and the economy,” said Rocco Rossi, President and CEO, Ontario Chamber of Commerce. “By conducting research and collaborating with experts, we aim to identify effective strategies that support mental health, promote health system resilience, and drive economic prosperity in Ontario.” Building on our previous work to tackle the mental health action gap, the OCC is proud to have the support of Medavie, a leading health solutions partner, in this vital project. Over the next several months, the OCC will lead a series of consultations with members and mental health stakeholders to identify specific obstacles, initiatives, and policy recommendations to address mental health and addictions challenges. A policy brief will be published in Fall 2023 as part of our Policy Primer Series, with key takeaways and recommendations for government and industry. “We’ve seen the lasting impacts the pandemic has had on the mental health of individuals and communities,” said Matthew Crossman, Vice President, Operations, Medavie Health Services. “As part of our mission to improve the wellbeing of Canadians, we focus on increasing awareness of mental health and addictions supports and services while aiming to ensure people have access to the care they need, when and where they need it.” We are proud to partner with the Ontario Chamber of Commerce on this initiative in support of the people, businesses and communities we serve.” We are inviting businesses, organizations, and people passionate about mental health to support this new research project. We are looking to create change in the workplace and promote a supportive policy environment that prioritizes mental wellness. To learn more or get involved, contact Sara Beyer, Senior Policy Analyst with the OCC, at sarabeyer@occ.ca. Outside of this OCC initiative, we have numerous resources in our community for people and businesses to work with to address our mental health challenges. People who are getting the support they need will be happier, more reliable, and more efficient. It’s better for our communities and families while helping local businesses thrive. When you think about starting a business, you likely consider many of the same factors as every other business owner; What are your goals, where should you locate, what will you offer, who will you hire? Most importantly though, you will think, how will I fund this?
It’s a question every business owner asks when planning their business. Many entrepreneurs don’t think twice about applying for grants, loans, and other sources of business funding to get started. For those who identify as LGBTQ2+ or BIPOC, however, things aren’t quite so clear. There is a problem in our business world that is systematically creating barriers for business owners that are visual minorities or openly queer; funding is just one of these barriers. According to a study done by the Canadian Gay and Lesbian Chamber of Commerce and Deloitte, 20% of the members of the LGBTQ2+ community face business scaling challenges with financing as one of the top items on their list of barriers. In the same survey, 62% of respondents stated that they would not disclose their LGBTQ2+ identity in official materials or to stakeholders. For those who are BIPOC, there is even less opportunity to hide your identity and therefore even more barriers to business. Another study conducted by The Canadian Black Chamber of Commerce found that 35% of respondents never take advantage of funding programs presented, with eligibility (36%), lack of time/resources (16%), and less than 10 staff members (14%) listed as the main reasons they never apply. Combined, the LGBTQ2+ and BIPOC communities account for roughly 25% of the Canadian population. Together, they are huge contributors to our economic, social, and cultural societies. Preventing LGBTQ2+ and BIPOC businesses from opening or operating at their full potential impacts the community as a whole. These individuals offer so many talents, perspectives, and experiences that are not shared or experienced due to business barriers. When these groups suffer, we all do. In order to address systemic discrimination, there are many things that need to occur. Two main objectives could be:
What can small business owners do?
June is Pride Month and National Indigenous History Month in Canada. Now is the perfect time to unite with members of the LGBTQ2+ or BIPOC groups and declare yourself an active ally. We encourage you to take the next few weeks to learn, grow, and install a plan in your business to become more inclusive. The Peterborough and the Kawarthas Chamber of Commerce held its annual Business Summit last month. Organizations of all shapes and sizes came together to discuss ways they can grow and prosper in the future. Businesses in the community seem to be all facing one common problem: staffing. Businesses are finding it nearly impossible to attract and retain employees.
There may be an untapped resource that businesses may have overlooked: the New Canadians Centre (NCC). Andy Cragg, Executive Director of the NCC, was a panelist at the Summit’s discussion on workforce. Cragg pointed out that many new residents come to Canada willing and able to join the workforce. On top of providing newcomers assistance to settle and integrate locally, the New Canadian Centre also offers employment support. This includes providing information about the local work environment, information on the accreditation and credential evaluation process, and a connection to other support programs and services. “We have approximately 15 adult clients and 15 youth clients, but this number is always fluctuating as new people arrive in our community. Even if someone is not necessarily actively looking, if a good opportunity for them arises, our counselors will still reach out to them; for newcomers especially, it can take some time to make the connections in Canada to secure work that is in line with their previous training and experience,” stated Michelle Nguyen Peterborough Immigration Partnership (PIP) Officer of the New Canadians Centre. Information on Labour and Immigration Statistics: · Employers and governments are increasingly relying on immigrants to fill labour shortages as more Canadians are reaching retirement age · Peterborough faces labour shortages in the healthcare industry, skilled trades, and business and finance sectors · Over 1.3 million new immigrants were admitted to Canada from 2016 to 2021, more than the last five-year period · Immigrants aged 25 to 54 account for 36.3% of all core-aged employment in accommodation and food services; 37.8% in transportation and warehousing, 34.1% in professional, scientific and technical services, and 20.1% in construction · The Workforce Development Board predicts that, between 2019 and 2026, 22.5% of all new workers are expected to come from immigration Nguyen also stated the NCC helps newcomers navigate the process on training into the industries in Canada. Nguyen also stated that the NCC helps newcomers navigate the process of acquiring the training needed to work in specific industries in Canada. “We can help clients pursue recertification or attain new certification through programs we run (CPR/First Aid, Smart Serve, Heights Training). In addition, we've been working to address language barriers for essential/ministry-mandated training with a local health & safety training provider (HRS Group Inc.). Fleming Employment has run promising programs like Pathways to Prosperity but language level is an issue for some newcomers to participate successfully. More generally, we conduct language assessments and refer people, when relevant, to language courses, depending on clients' needs,” Nguyen explained. As well, the Federal Government has introduced the Economic Mobilities Pathway Pilot program. This program would match, “skilled refugees and other displaced people” with businesses to fill “in-demand jobs in Canada”. More information on this program can be found at this link. If you are interested in learning more about the programs offered by the New Canadians Centre, check out their website nccpeterborough.ca There is no shortage of data in this day and age.
We live and work online, we survey and poll, our services run through digital systems — much of what we do is tracked and analysed in some shape or form. Economists often refer to data as the new oil both in terms of its global economic value and in what it means for growing businesses. We get a number of requests at the Chamber for data on a variety of subjects and business sectors. While we can help provide some data and analysis, we also rely on our community and industry partners for raw and aggregate data. Here are a few places to look for free, high-quality data for making decisions for your business: Business Data Lab The Canadian Chamber of Commerce launched the Business Data Lab (BDL) a year ago. It brings together data from a variety of sources to track evolving market conditions and provide Canadian businesses with critical information to help make better decisions and improve performance. The BDL provides timely reports and analysis on things like the economy, workforce mobility trends, and business conditions. The BDL also includes the Business Conditions Terminal, which provides access to real-time data on markets that matter to your business with high-quality, high-frequency indicators. Workforce Development Board Looking for information on local workforce trends? The Workforce Development Board is able to access data that isn’t always available to the general public or can be expensive for an individual business to purchase. They also track local labour activity. With this data, they provide analysis and reports with valuable insights businesses can use to help grow their workforce and figure out what are competitive salaries. Peterborough and the Kawarthas Economic Development (PKED) The website is branded Invest Peterborough and the Kawarthas for a reason — the Data and Resource hub on their website includes information on all things Peterborough, including market information, quality of life data, logistics, talent, demographics, economics, major employers, reports on various sectors and economic development opportunities, and more. PKED is in the midst of their annual Business Count, a comprehensive survey of local businesses that runs through August and provides in-depth tracking and analysis on local businesses. Canadian Chamber of Commerce The policy team at the Canadian Chamber of Commerce (CCC) have put together some comprehensive reports and policy papers on various business issues. Where the Business Data Lab offers large swaths of data that can be narrowed down to specific sectors and geographics, the CCC provides data based on issues like cyber security, international trade, cannabis regulation, supply chains, Indigenous affairs, and more. Ontario Chamber of Commerce Similar to the CCC, the Ontario Chamber of Commerce (OCC) provides a lot of resources, including data, relating to issues with a provincial scope, like healthcare, Ontario’s economy, transportation and supply chain, and cyber security. Their publications include some very in-depth reports, often partnered with other industry associations, on specific topics like tourism and aggregates. Peterborough and the Kawarthas Chamber of Commerce Our website has a Resource Hub where we have compiled resources and information on topics like starting or growing a business, exporting, training, workforce, and research. Some of the information links to work from our partners and some of it will point you to services offered by our members. It’s a great place to get started and find some new places to source information. Statistics Canada If there’s data regarding people and businesses across Canada, there’s a good chance Statistics Canada tracks it. A lot of businesses and agencies, including the Chamber, rely on data from Statistics Canada for our research and reports. They offer raw data and non-partisan analysis. Your own business! When it comes to market research, no one knows your customers and their habits better than you and the technology you use to run your business. Your point-of-sale system, website, social media, customer relationship management (CRM) software, newsletter, and advertisements are all gathering valuable information on who your customers are, how and when they spend money, where they are, what they like, and what motivates them. It can also find people who have similarities to your customers, but aren’t currently spending money with you. If you’re unsure how to fully access the potential of your data, we have a Digital Service Squad member ready to connect and offer one-on-one help for free. Additionally, the Chamber has several experts within our membership and grants to cover some of the cost. This list is nowhere near exhaustive, but is a good place to start. Chances are, there is an industry group with specific knowledge and data on your business sector. There are also a host of businesses, non-profits, charities, and government agencies with data on pretty much any issue and sector. Not sure where to look? Connect with the Chamber and we can help. Unfairness in regulation and taxation is an area of particular concern to chambers of commerce.
One sector where this unfairness is particularly concerning is within alcohol production and sales. Wineries and craft breweries have come a long way in Ontario and contribute to a thriving manufacturing and agriculture industry. But in many ways, cideries and distilleries have been left behind. It’s stifling growth within the sector for businesses across Ontario. For this reason, the Peterborough and the Kawarthas Chamber of Commerce partnered with the Prince Edward County Chamber of Commerce, Port Hope and District Chamber of Commerce and several others to put forward a renewed policy resolution titled In the Spirit of Business. This policy resolution was approved by members of the Ontario Chamber of Commerce and will be part of their advocacy platform for the next three years. Here is our resolution: Currently, the policy regime applied to craft brewery and winery industries is not aligned with the one applied to the craft distillery industry, resulting in challenges for growth and sustainability of the sector as an integral part of Ontario’s economy. Craft distilling is an industry in rapid growth. Distillers are creating jobs and boosting economies in large and small centres. The segment supports 6,000 jobs in Ontario and annually contributes $1.5 billion to Ontario’s Gross Provincial Product, while craft distillers and the spirit industry generate over $2.5 billion in annual sales. The spirits industry works closely with local farmers, connects to tourism and hospitality industries, and contributes to the economic growth of rural areas across Ontario. However, significant challenges still need to be addressed, i.e., tax at craft distillery tasting rooms is 61.5%, which is 10 times what Ontario wineries pay. Additionally, craft distilleries do not receive recognition for using ingredients produced in Ontario. For these reasons the craft distillery industry should be considered in policymaking. The province of Nova Scotia continues to be a leader in the spirits industry since the government opened the door to growth in 2014 by reducing the markup by 60-80% with another 10% mark down if distillers use provincially grown agriculture products. The government cut the license fee from $2,000 to $500, increased production threshold, and introduced a graduated markup based on annual production. These measures allowed craft distillers to thrive. In British Columbia, since the introduction of a graduated tax system, the industry has grown from 17 to 48 distilleries in the province. Craft spirits are considerably more laborious to produce than large-scale industrial spirits and are also marketed at higher prices. Any short-term revenue reductions from lower LCBO markups and tasting room taxes will be surpassed by the increased revenue from higher employment and consumers supporting local premium spirits that will come from a thriving craft distillery industry. In the past few years there has been some movement towards parity with other craft alcohol industries, such as: • Allowing craft distillers to distribute their products to bars and restaurants. • Allowing craft distillers to open “Pop-up” retail stores via Special Occasion Permits; and • The continuation of “The Small Cidery and Small Distillery Program” for a three-year commitment (expires in 2025). Craft distillers believe these changes are a step in the right direction, but additional changes are required to reach parity with other craft alcohol industries in Ontario. For example, the update to “Canada’s Guidance on Alcohol and Health” recognizes that the consumption of beverage alcohol is equivalent across different categories, therefore craft distillers believe it is possible to have all regulations regarding alcohol align to the same standards. This call for change is not only coming from the chambers of commerce and boards of trade but also from Craft Spirits Ontario. We are urging the Government of Ontario to: 1. Approve the continuation of “The Small Cidery and Small Distillery Program” until 2027 and that both industries be considered in tandem moving forward. 2. Remove the LCBO fees applied to sales from craft distilleries and craft cideries directly to licensees and by-the-glass sales. 3. Align the craft distiller's regulations with the craft beer and wine industry by applying a graduated rate to the current spirits basic tax, with a zero percent markup on the first 50,000 litres sold. 4. Lower the LCBO markup on spirits and ciders made primarily with Ontario ingredients by Ontario facilities to be equivalent to microbreweries, graduated by production method and volume. |
AuthorThe Peterborough and the Kawarthas Chamber of Commerce acts as a catalyst to enhance business growth, opportunity, innovation, partnerships and a diverse business community. Archives
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