Calgary small businesses wary about future

The Canadian Federation for Independent Business (CFIB) has released an updated look at how small businesses across Canada are feeling about the future.

Overall, the report suggests small business owners nationwide feel slightly more optimistic about the year ahead than they were a month ago, but their short-term outlook has worsened.

The small business confidence indicator registered 50.9 index points in December, up 0.9 points over November. While it is an uptick, it remains at levels usually only seen around recession periods.

Meanwhile, the short-term outlook of three months dropped by more than three points to 40.2.

The new report also suggests that 24 per cent of small businesses in Alberta are at risk of closure, which is the highest percentage in the country.

“Two-thirds of them report carrying an average COVID-related debt of almost $200,000. So, it’s a pretty high amount of COVID-related debt, and every time interest rates go up, these loan payments also go up,” said Jairo Yunis , a senior policy analyst with the CFIB.

“Simply put, small businesses in Alberta are facing significant cost challenges due to a deteriorating economic environment.”

Alberta small business owners feel worse about the state of the economy than owners in other provinces

SUSPEND BUSINESS TAX?

Yunis added that the CFIB would like the see the Alberta government take an approach to help small businesses similar to what was announced this past summer in Saskatchewan when that province temporarily scrapped its small business tax rate of two per cent.

In total, the report found that 66 per cent of small businesses in Alberta are still chipping away at pandemic debt.

Meanwhile, 54 per cent say they still have not yet returned to normal pre-pandemic sales despite the hope that there was going to be a boom in sales at the beginning of 2022.

“Skilled labor shortages continue to be the top factor limited in business growth in Alberta and elsewhere in Canada,” said Yunis.

“As of the third quarter, there were almost 104,000 job vacancies in the province. That’s 20,000 more than at the beginning of the year. So, that’s definitely putting a strain on the hospitality and service sectors.”

Stakeholders in Calgary, like Ernie Tsu, the president of the Alberta Hospitality Association, are hearing those concerns first-hand.

“There are a lot of hospitality businesses that can’t operate at full capacity hours because they just don’t have that labour,” he said.

“We are starting to see it come back, there are lots of positives happening, but there is also still the reality of the last two years.”

Some Calgary restaurants and bars lack the staff to operate full hours

NOT ALL DOOM AND GLOOM

The CFIB report pointed to retail, agriculture and construction businesses as the most common sectors to express a lack of optimism for the province’s economic future.

However, it’s not all doom and gloom. Some retailers, like DUER in Calgary, say they have been able to break away from the trend being felt across the province.

“2022 was an incredible year. We opened up during a pandemic in 2020, and we weren’t sure what we were going to see, and we were pleasantly surprised,” said Zach Matthews, Calgary store manager.

“We are very much exceeding expectation, and we’re very blessed with what Calgary has been able to offer us, and the returning customer base has been strong.”

Now, the Canadian company is looking to continue expanding its product line while looking ahead to what it hopes is another profitable year in 2023.

With files from the Canadian Press.

Leave a Reply

Your email address will not be published.