by Tom Thomson
Small businesses are really feeling the pressure of inflation right now, with both price and wage increase plans at all-time highs and growing concern over labour shortages and input costs, particularly fuel and energy. Worse still, they don’t feel heard – only 16 per cent believe the federal and provincial government understands the cost pressures they face. It’s no wonder they are feeling anxious about the future.
The Chamber has been working closely with businesses throughout the pandemic, and this summer has proven to be a solid one for many local businesses. Our recent sector consultations with retail, food and beverage, and builders-developers clearly showed that many challenges still exist, with some of the pressures beyond their control. Those can be read online at https://www.discovernelson.com/news/state-of-the-sectors/.
In a nation-wide survey up to and including July, only 32 per cent of businesses say they are in good shape, while 20 per cent say they are in bad shape. Full-time hiring plans continue to narrow, with 20 per cent of firms looking to hire over the next three months and 17 per cent looking to lay off staff
The major limitation on business growth is by far labour shortages (52 per cent for shortages of skilled workers and 39 per cent for semi- or unskilled workers). Fuel and energy costs have maintained their spot as the top cost constraint currently affecting the majority of small firms (76 per cent).
These indicators should serve as a serious warning to governments that businesses are struggling. They should be factoring this into their economic and policy decisions in the months ahead, as businesses can’t handle any more pressure. The impact of new taxation, or programs that put the onus on business to find money to pay for those programs, is a real challenge.
The good news is the B.C. economy has been performing much better than expected. B.C.’s economic recovery last year was stronger than forecast, with the province’s audited budget numbers showing a surplus of $1.3 billion, in contrast to an earlier projection of a deficit nearing $10 billion.
The April 2021 budget, delivered during some of the darkest days of the COVID-19 pandemic, originally forecast a deficit of $9.7 billion, but revenues improved throughout the year.
Finance Minister Selina Robinson said the improvement can be attributed to reopening the economy and the resultant increase in tax revenue, one-time federal contributions for COVID-19 and disaster events, higher natural resource revenues and higher Crown corporation earnings, especially at ICBC.
She said in a statement the “economic strength” demonstrated by the surplus will be put toward new inflation-fighting measures next month. That is important, but these measures need to include support for business sectors still challenged with getting back to profitability.
The Chamber will continue to work on your behalf, but we rely on data to support businesses
We are continually taking the pulse of the Nelson and area business community, and we encourage all small businesses, Chamber members or not, to join the BCMindReader.com platform.
The Nelson and District Chamber of Commerce has partnered with the BC Chamber of Commerce to get feedback from businesses in greater nelson. We’re asking you to join BCMindReader—an online insight community that gives businesses — like yours — a strong voice in government. To do so, visit https://www.BCMindReader.com/c/r/bc-join.
The BCMindReader.com community comprising 3,700-plus engaged business leaders from across B.C. allows us to consult and gather near real-time intelligence on topics that matter to business, including the cost of doing business, workforce challenges, supply chain challenges, affordable housing and childcare, the need for key infrastructure that facilitates movement of people and products as well as international trade and export readiness.
Be the voice of B.C. business. Help inform our policy and advocacy work. Add your voice and have the Nelson and District Chamber and the BC Chamber of Commerce, advocate for you through our policy work and influence. Together, we want to make sure that Nelson and District has the most powerful voice possible in B.C.
Tom Thomson is executive director of the Nelson and District Chamber of Commerce.