Earlier this month, we celebrated Small Business Week throughout the country. The week was both an opportunity to celebrate and recognize those smaller enterprises that are the heartbeat of our economy, but also a reminder that their continued existence is highly dependent on continued support from local communities.
It’s never been an easy life to run a small business – rewarding certainly, but not easy. Entrepreneurs are a special breed that don’t mind putting in long, stressful hours in exchange for the freedom that can come with running one’s own operation – but most aren’t getting rich, despite any contrary perception. In the current environment with a growing list of challenges, however, ‘not easy’ is a dramatic understatement.
The Canadian Chamber of Commerce’s Business Data Lab’s analysis of the quarterly Canadian Survey on Business Conditions has found that one-third of businesses have not yet fully recovered from the pandemic. It also found that businesses’ ability to take on debt continues to decline, with smaller firms being most constrained along with businesses in high-contact services, construction, health and social sectors. This will not only further slow recovery, but also limit businesses’ ability to act on potential growth opportunities while in survival mode.
Recovery and limitations on growth are being hindered on a number of fronts, but the three primary and interrelated issues are workforce, costs of doing business and supply chain.
First, workforce. The current labour shortage that is being faced by all types and sizes of businesses is the top issue holding back growth in New Brunswick (and elsewhere, meaning competition will only intensify). Workforce had become perhaps the key issue prior to the pandemic, but since 2020 it has been severely exacerbated for several reasons and the federal government’s current push to expand Employment Insurance will further deteriorate the situation. There has been more movement than usual amongst sectors during the pandemic, which has created gaps, but the larger issue seems to be individuals completely disappearing from the workforce – despite strong population growth.
In 2021, New Brunswick had the second lowest labour force participation rate in the country, with only 60.9% of its population aged 15 years and over participating in the labour force. The workforce is particularly complicated, particularly when considering the role that access to health care and availability of housing play – themselves very complex issues. Health and housing are often the first questions that potential recruits to New Brunswick ask – we need good answers and right now we don’t have them.
Second, the cost of doing business continues to accelerate, starting with the inflationary pressures that we are all feeling right now. On the federal side, the aforementioned EI program is being expanded (while $30 billion in debt, primarily because of COVID relief programs), CPP contributions will also soon be rising, and the carbon tax continues to rise. Provincially, employers have been hit with a $2.00 increase to the minimum wage, outside of the annual CPI-linked increases each April 1st and energy costs continue to rise with NB Power now seeking a 8.9% increase on top of everything else.
Minimum wage increases also have a cascading effect throughout organizations, as other employees will receive similar increases. While worker’s compensation rates will decline again in 2023, employers are concerned that this will be short-lived with WorkSafeNB seeking to increase benefits to levels beyond other Atlantic provinces.
Supply chain is a global issue, but domestically, a lack of people working in Canada as truck drivers is causing disruptions and further contributing to the inflationary environment. The industry must attract, train and retain thousands of new truck drivers over the next few years to mitigate these issues and the current financial support provided for such trainees is insufficient to attract the required number of people to the industry. The lack of an available workforce globally is also a contributing factor here – not only is it harder, more expensive and dealing with longer timelines to acquire goods – the goods themselves are not being produced at previous rates.
These are big, broad problems and sustainable solutions are likely in the medium- to long-term range. In the short-term, small local businesses are counting on local communities and individuals for their continued support – which has been outstanding throughout the pandemic.
Earlier this month, we hosted our annual Business Excellence Awards and I was particularly struck by a common thread throughout the finalists and recipients – their deep connection to the community and desire to give back. Each of them recognized the importance of community support – regardless of the type of business or whether local people were their customers. Support can be given in many different ways. Of course, shopping and dining locally and using local services are the most obvious, but actions like sharing social media posts, giving word-of-mouth referrals, leaving positive reviews and making connections in your field can all have a positive impact.
I walked away from that event feeling hopeful that stories like theirs will continue to be told and that with the support of our communities we’ll be able to grow small businesses into bigger ones and all prosper – our organizational vision is stronger community through business prosperity, and the corollary is also true – community support leads to business prosperity. On behalf of New Brunswick’s businesses – thank you to our citizens for your support and I know we can continue to count on you as the business community continues to navigate turbulent times.
Krista Ross is CEO of the Fredericton Chamber of Commerce, a nationally accredited organization with more than 1,000 members, is an active business organization engaged in policy development and advocacy that affects the competitiveness of our members and the Canadian business environment. The Chamber’s vision is ‘Stronger Community Through Business Prosperity’.