NEWS RELEASE
TIMMINS CHAMBER OF COMMERCE
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Timmins Chamber has mixed reaction to 2016 provincial budget
TIMMINS - Though there are some measures in the 2016 provincial budget that may benefit Timmins businesses, its lack of long-term solutions for rising costs in electricity, cap-and-trade and pension reform is a concern, according to the Timmins Chamber of Commerce.
The February 25 presentation of the 2016 provincial budget by Finance Minister Charles Sousa proposed several items relevant to the Timmins area, including:
- A commitment of $160 billion in infrastructure spending over 12 years, including increasing the Connecting Links Funding program from $15 million to $30 million by 2018, and increasing the Ontario Community Infrastructure Fund to $230 million by 2018;
- The elimination of tuition costs for college and university students from families of incomes of $50,000 or less;
- A commitment of returning to returning to fiscal balance in 2017-2018;
- A continued commitment to investment in the Ring of Fire, including $1 billion in strategic transportation infrastructure; and
- The continued support for the Northern Industrial Electricity Rate Program, which provides eligible large industrial facilities a rebate of two cents per kilowatt hour.
“While we applaud the provincial government’s efforts to bolster skills training and invest in much-needed infrastructure programs, there remain some items of great concern within the 2016 budget,” said Bigeau. “The proposed cap and trade system is projected to add to fuel costs at a time where electricity prices are skyrocketing, and lingering questions remain about the impact of pension plan reforms. Although some of the announced investments are a step in the right direction, much more remains to be done to protect and grow our economy.”
The government’s commitment to eliminating budgetary deficits by 2017-2018 is encouraging, as this is a priority for 92 percent of businesses surveyed by the Ontario Chamber of Commerce.
As the provincial debt is now roughly $300 million, and as interest payments consumer ever-greater portions of the budget, credit rating agencies have downgraded Ontario’s outlook from stable to negative in recent years.
As such, addressing the deficit is a key priority for the provincial business community.
As a shortage of skilled workers remains one of Timmins businesses’ greatest concerns, it is positive to note that the provincial workforce will be bolstered by the proposed provincial program to eliminate post-secondary tuition for families with incomes of $50,000 or less, said Bigeau.
Another element of interest to Timmins businesses is the recent announcement of increased investment in the Connecting Links program.
This fund assists the 77 municipalities to which the province has downloaded the responsibility of maintaining 350 kilometres of Connecting Links – portions of provincial highways traveling through municipalities; this year, the budget promises to increase its provincial investment from its current $15 million to $30 million by 2018.
While this is a step in the right direction, communities still face considerable struggles to address these additional responsibilities, said Bigeau.
For example, the City of Timmins faces an estimated $100 million of repairs over 10 years for its 24 kilometres of Connecting Link.
Moreover, the budget fails to address several other issues of concern to Timmins businesses, including the continued increases in the price of electricity, which is projected to increase by 13 percent over five years for industrial customers, and by 25 percent for small businesses.
Although existing measures such as the Northern Industrial Electricity Rate program are a positive stopgap, the budget still fails to present any long-term solutions to ever-increasing rates which threaten Ontario’s business competitiveness, said Bigeau.
The 2016 budget also fails to address concerns businesses face regarding the cumulative regulatory burden that may be imposed by the province’s ongoing efforts with regards to the Ontario Retirement Pension Plan as well as the proposed cap-and-trade system.
The government should be seeking to mitigate the impact of these reforms, said Bigeau.
“The Timmins Chamber of Commerce continues to have strong concerns about how businesses are being asked to absorb increasingly higher costs, which we fear will put them at a disadvantage in the national and global economies,” said Bigeau. “We look forward to working with the provincial government to address these ongoing issues and to encourage meaningful engagement with the business community as they further develop regulatory reforms. Dispelling this environment of uncertainty would benefit the province as a whole and provide some much-needed support for our economy.”
The Ontario Chamber of Commerce (OCC) shared similar concerns about the cumulative regulatory burden posed within the 2016 provincial budget, according to Allan O’Dette, President and CEO of the OCC.
“Government needs to work with the business community to shape how the funds in the Greenhouse Gas Reductions Account are allocated,” said O’Dette. “This collaborative approach, working with the business community to transition into this new policy, is the same approach we have called on the government to take with the ORPP. On that front, more needs to be done to ensure that there are no short to medium term negative impacts on GDP and consumer spending.”
In its 2015 report on cap and trade, the OCC had called on government to invest cap and trade proceeds in a way that helps businesses in the transition to a lower-carbon economy.
The OCC notes, however, that the employer community is eager to help shape how the $1.9 billion in proceeds are spent.
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