Thanks so much, Mr. Chair.
Welcome, everyone, and congratulations. It's nice to see everybody around the table. I think it should be a fun session, and we look forward to working with you folks.
I think most of you know that we have 105,000 business owners as members and that we represent independent business. We represent small and medium-sized enterprises. They're 45% of GDP and 60% of total employment. I don't think most of you know, though, that we have 11,000 manufacturing members, which makes us one of the biggest, if not the biggest, representatives of the manufacturing sector. And as Jay pointed out, 90% of the manufacturing sector is small and medium-sized enterprises. So it's not surprising that we have such large numbers.
We want to talk about the challenges facing not only manufacturers but also the small and medium-sized enterprise economy, because you'll find similarities between them.
Corinne and Lucie put together some graphs from several of our reports. You have this package before you, and I'd like you to go to the right-hand side, which is the deck I'm going to be presenting. I would also like you to pull out this...because it is the business barometer I'll be referring to, if it's okay—because it's important.
This first graph is of our business barometer, an indicator we use, and that is also used by the Bank of Canada. We release it quarterly. It's reported by Bloomberg and others around the world. It's an amazing indicator, based on business owners' expectations for their own business. Their assessment of the economy is as good a guess as anyone else's in this room. In their assessment of their own business, they're experts, and that has made them incredibly accurate in tracking the GDP. If you look at the last page of this report on the quarterly business barometer, you can see our indicator and you can see the GDP. It's been amazingly accurate in terms of employment and what GDP is doing. There's a little divergence, probably because of fuel costs and our having another minority government. There are some things here, but by and large the barometer has been incredibly accurate, and that's why Bank of Canada Governor Dodge wants to meet with us two or three times a year to discuss it, because they have a pretty good idea of what's happening.
I also want to refer you to page 2 of this business barometer, because on that page we break out expectations by province and sector. This was done in March, and it includes expectations for the year. If you look at figure 4 and you look at manufacturing, manufacturing is actually tracking up. There are other sectors that are hurting more than manufacturing. Take a look at agriculture; look at wholesale; look at transportation. They're tracking down. So I just wanted to bring that to people's attention.
If I could move to the next graph, we asked our members, who are experts in this, about their employment plans. If I asked you about your office, you could tell me what you're going to be doing in your office; if we ask about their business, they can tell us what their employment plans are. You can see in regard to expectations for employment—anticipated employment plans—that in the entire small and medium-sized enterprise economy, 31% said they were going to increase their employment; 7% said they were going to decrease employment; and 63% said there'd be no change.
We broke out that number for the manufacturing sector, and we found that the manufacturing sector of small and medium-sized enterprises is even more optimistic about employment. This is where we're diverging with Jay. It might be a “large versus small” issue, but if you look here, 40% of over 300 respondents said they were going to increase employment this year, 8% said they were going to decrease employment, and 52% said they were going to stay the same.
We broke out some numbers for you, very quickly, on the dollar. Again, we looked at the general population, and as Jay pointed out again, it doesn't mean there aren't challenges, especially with the dollar. It's for the general population of small business. If you can see the red, 33% said a lower dollar would help them; 19%, in the white, said a higher dollar would help them, or one out of five; and in the yellow, 39% said it would have no effect. Well, if you look at manufacturing, there's no surprise: 62%, or double the full population, said that a lower dollar helps them. So the higher dollar is definitely an issue—though about 15% in the manufacturing sector said a higher dollar helps them. I agree with Jay on this. We've been saying over and over that it's not the level of the dollar, it's the rate of the increase and whether or not they can factor it in.
On the next page, when we asked all of our members, what are you basing your expectations for your business and your employment plans on, or what are the factors influencing you, graph 6 shows that most of the impacts affecting their performance have worsened. The conditions have worsened, particularly for interest rates, insurance premiums, energy prices, and other input prices.
I want to pause for a moment and talk about insurance. We asked this committee, when you sat on different sides, to look at insurance. Even now, when you have been told insurance is not a problem, 55% of our members are saying that cost and access are still a problem. We think this committee should at least look at what's going on with this.
Jay, we delve into this more deeply. In manufacturing, one of their big issues is insurance, its high cost and access to it. I don't see why this committee can't look at this as a non-partisan issue. We have lots of information to bring to the table. This is not to go after the insurance industry at all, but just to understand what's going on, just like you're doing with the manufacturing sector.
If we break out the factors affecting manufacturing performance, you can see that they are very similar to those affecting the general population, but the impacts are even deeper and have become harder. In particular, the impacts of market wages have become harder—much harder than for the general population—and the impacts of energy prices too.
Corinne has broken out some information on that from some of these reports, if you don't mind talking about those, Corinne.