Trump, Trade, and Technology: What We Heard at the Ontario Chamber of Commerce 2024 Ontario Economic Summit
Every year business leaders, policymakers, and government officials gather at the OCC Ontario Economic Summit to hear from leading experts and discuss the biggest challenges, and opportunities facing the provincial economy. This year’s summit was the largest in its history, and with the recent results of the U.S. election and the potential ramifications for Canada on everyone’s mind, it was a must attend event.
Here is what CPA Ontario heard at this year’s Ontario Economic Summit, and the insights that CPAs need to know:
The U.S. Election Results and What It Could Mean for Canada
Not surprisingly, the incoming Trump administration was a focal point of conversation among speakers, panelists and attendees.
In his remarks kicking off the first night of the summit, Ontario’s Minister of Finance, the Hon. Peter Bethlenfalvy spoke to the need to continue building relationships with all levels of leaders in the U.S. whether that be governors, senators, or chambers of commerce presidents. He discussed the many memorandums of understanding that Ontario has in place with numerous states, to support cross border trade.
The U.S. is our number one trade relationship, and the minister stated the provincial government’s willingness to establish a bilateral deal with the U.S., if necessary, to protect that relationship.
It was a position that was echoed by the Hon. Doug Ford, Premier of Ontario during his keynote address. The Premier spoke to the need to reject protectionism and the importance of free trade for the growth of both economies. However, he also stipulated that this trade should be “fair” and promoting a “U.S./Canada” approach. He talked about his recent meeting as Chair of Canada’s Premiers and the potential of a bilateral trade agreement with the U.S., amid accusations that Mexico has been used as a backdoor for importing automotive parts from China that undercut the U.S. and Canadian auto industry.
On November 26, CPA Ontario will welcome leading U.S. and Canadian political commentator David Frum will sit down with The Munk Debates moderator and organizer, Rudyard Griffiths for an insightful discussion on the impact of a second Trump presidency. The discussion will include trade implications, tax competitiveness, and cross-border economic policies. For more information, please visit the CPA Ontario website.
Given the Summit’s theme of future-proofing the economy through inclusive and sustainable growth, there was an open question as to what impact the incoming U.S. administration might have on the continued adoption of green policies.
During a discussion on how Ontario can navigate this time of economic volatility, Ontario Chamber of Commerce CEO Daniel Tisch, Dr. Gervan Fearon of George Brown and Barbara Zvan of University Pension Plan (UPP) agreed that, regardless of the policy direction that the U.S. takes under the new administration, progress on sustainability will continue. During the first Trump administration, much of the sustainability policy took place at the state and the municipal level. Given the continued interest of investors, and with 80% of global financial regulators already reporting under the sustainability standards set by the International Sustainability Standards Board (ISSB), there will be little interest in moving backwards.
CPAs looking to stay informed on the evolution of standards and regulations in sustainability reporting and assurance should visit CPA Ontario’s Knowledge Hub: Sustainability Simplified.
The same optimistic tone was struck by U.S. ambassador to Canada, David L. Cohen. During his fireside chat, he declared that the relationship between Canada and the U.S. is at a high-water mark, and that it would be a mistake for Canada to look at the presidential election and ask what needs to change.
What we should be focusing on, according to the ambassador, is working to mitigate disruptions of supply chains to demonstrate that we are a reliable economic partner. Cohen referenced critical minerals, and the fact that Canada does not necessarily have the market, financing and private sector investment to get these minerals out of the ground, as well as the required processing and production. Canada needs to make building out a critical minerals supply chain a priority.
The two per cent mark on defence spending, a requirement for NATO membership, is a fixation in the U.S. that Canada should take seriously, as is arctic sovereignty and the defence of the North. Another area of focus should be cybersecurity, where Canada is a world leader.
And in the age of artificial intelligence, that leadership will be critical.
AI-Powered Growth: Opportunity for Emerging Technology
Artificial Intelligence (AI) has generated almost as many headlines as the U.S. election and has the potential to have as substantial an impact to the Canadian and Ontario economies.
Moderator Stephanie Holko, the Director of Project Development at NGen Canada led Dana O’Born, Vice-President, Strategy and Advocacy of the Council of Canadian Innovators, Dr. Joel Blitt of the University of Waterloo and John Wright, National Technology Officer, Microsoft Canada had an open discussion about how Ontario should approach AI as an opportunity for growth.
The panel agreed that while Canadians are behind on AI adoption, workers are using AI even if their businesses haven’t adopted it. The panel also agreed that workers using AI without any guardrails is a risky proposition. CPA Ontario, for example, recently released a case study through the Regulatory Standard on the risks of using AI without the proper policies in place.
And while there has been an explosion in AI governance, many small and medium enterprises lack that governance capacity, and the technological infrastructure, to adopt AI. Last year CPA Ontario released Trust in New Frontiers: Putting AI Governance into Practice, which lays out the case for how CPAs, guided by technical expertise and high ethical standards, can help strengthen AI governance and build public trust.
However, there was also a broad agreement artificial intelligence literacy will soon be a skill that everyone will require, and that AI represents an opportunity for workers who understand the technology and can help their organizations use it to drive efficiency. Likewise, by deploying the technology in health care and education, two public sectors with multi-billion-dollar budgets, it can be used to drive better outcomes for patients and students.
It was an open question about where and how government should be investing in AI. On the one hand, there is the need for computing power, but the federal government’s proposed $2.4 billion investment in infrastructure is a drop in the bucket compared to investment in AI overall.
The alternate position is that we should be investing in AI literacy and helping Canadians understand this technology at every level. Canadians have some of the most negative views in the world when it comes to AI, so there is a clear trust gap that needs to be cleared. Funding could also be used to encourage AI adoption, and to support entrepreneurship in the AI space.
At the same time, AI presents the “sliver of the solution” for Canada’s competitiveness and productivity issues, but it isn’t the “silver bullet” that some are purporting it to be. Americans are producing 50 per cent more than the average Canadian, and while AI presents new tools to seize, Ontario’s productivity and competitiveness challenge calls for more fearless action.
Investment, Interest Rates and Ontario’s Competitive Advantage
That need to be fearless was the message that CPA Ontario President and CEO Carol Wilding delivered through her remarks at the summit.
Many governments in Canada remain focused on pocketbook issues, and the Premier and Minister Bethlenfalvy took the opportunity at the summit to tout their own cost saving measures, such as the gas tax cut and the $200 taxpayer rebate.
However, considering the policy commitments made by the incoming Trump administration on deregulation and taxation, Wilding reinforced the need to start looking at the deeper issues, including our tax competitiveness.
Steve Paikin, host of the Agenda on TVO, moderated a debate on Ontario’s competitive advantage. Participants included Mike Moffatt of the SMART Prosperity Institute, Drew Fagan of the Munk School at the University of Toronto, Flavio Volpe of the Automotive Parts Manufacturers Association and Robin Shaban, Co-Founder of Canadian Anti-Monopoly.
The debate topic was “be it resolved, Ontario is at risk of losing its global competitive advantage.” When the audience was polled at the outset of the debate, 82% responded yes, and 18% responded no.
The province’s slow economic growth, based on weak productivity growth was laid out during the debate. With annual GDP growth expected to be 2.1% on average, on par with the last 20 years, and productivity expected to be stagnant, growth remains the central economic issue. Coupled with low private investment, low business confidence and low real GDP growth, Ontario is looking like it is losing its position.
The alternative view put forward in the debate was that Ontario is not falling behind, merely in the middle of the pack. But more needs to be done to harness our economic strengths if we want to become as productive as the U.S. Necessary measures include cutting regulations to make things more competitive, thinking to the long term beyond the next election cycle, and realizing the potential of investment in the economy of intangibles. Given the strength of the U.S. economy, Canada and Ontario will need to start moving faster.
In closing the conference Doug Porter, Chief Economist at BMO Capital Markets, reinforced that the U.S. economy has been the “big surprise” over the last year.
While dealing with the similar issues, such as inflation, that have hampered other economies, the U.S. has continued its rapid growth. Canada, on the other hand, has been stalled for a decade. More recently, Canada’s labour market has weakened, driven by a softening economy and record-breaking immigration. Ontario’s unemployment rate is around 7%. Porter referred to this past summer’s Canadian National Exhibition, which was looking to hire for 5,000 positions, but received over 37,000 applications, as an example of more people looking for jobs than are available.
However, according to Porter, there are silver linings. With slower population growth and improvements in the economy, Canada could see the unemployment rate drifting back down by late 2025. The Canadian dollar is also expected to stabilize.
Porter expects that the Bank of Canada will lower rates again in 2025, which could mean a weaker Canadian dollar. However, even with the ongoing uncertainty, Porter believes that Canada has passed the point of maximum risk and that interest rates coming down will lift a big weight off of the economy.
The Bottom Line for CPAs
At the end of the debate on whether Ontario is losing its competitive advantage, the audience was polled again. And no surprise, the polling numbers changed slightly in favour of the yes vote: 85% yes, and 15% no.
Confidence comes from certainty, and at the present time there is a great deal of uncertainty as to what the future might hold for the Canadian and Ontario economies, respectfully. From the U.S. election results to Canada’s struggling productivity to the ongoing race to capture the potential artificial intelligence, there are no shortage of new challenges for CPAs. In order to play their foundational role in providing the trust and assurance that investors and capital markets rely on, CPAs must equip themselves with the tools, the expertise, and the strategic insights to help lead Ontario, and Canada, forward.