Small business confidence down, as tough economic times continue

The Canadian Federation of Independent Business is an association that advocates for small businesses across Canada and in their monthly Business Barometer Index they found that the confidence of Alberta small business owners went down a point to 45.6 points on a scale between zero to 100 in August. An index number between 65 to 75 typically shows that there's a healthy economy.

St. Paul Chamber of Commerce President Kevin Bernhardt acknowledged the tough economic times that small businesses have faced and will be facing in the future.

“I work with local businesses both day to day in my job, as well as in my capacity with the St. Paul Chamber. I think most business owners acknowledge that 2017 isn't going to be any better than 2016.&”

Lac La Biche Chamber of Commerce President Rik Nikoniuk is highly invested in the area as the vice president of Kingdom Properties, managing partner of Diamond Ridge LLP, and president of CSC Development Group in the area. He said he wasn't surprised to hear about the fall in confidence because of the current state of the provincial economy and taxation rates.

“It does surprise me given the current and projection taxation rates … it's getting hard and it's not making things easier … It doesn't surprise me that confidence fell,&” he said. “We've gone from the land of opportunity to oh my goodness what's happening, what's next.&”

He said he understands why people are concerned about the provincial economy because it has a direct impact on the success of local businesses.

“The provincial economy has a direct effect on us,&” he said, adding that he was aware that of the NDP recent announcement of a $10.9 billion deficit but he's hoping that next year the economy will improve.

Merwin Haight Jr. of the Ashmont area opened a renovation and restoration business in 2010, but was forced to officially shut down on May 31, 2016, after economic conditions worsened.

He says that he was forced to shut down because he was not able to find jobs for his business to take on, as well as a decrease in insurance claims. “People started taking the work on themselves and cash settling on claims rather than getting a crew in to do the work. Sometimes people decide to cancel the claim due to the cost of the deductible and fear of increasing insurance rates.&”

However, the provincial government is facing a huge financial challenge that has reportedly led to officials borrowing $7 billion for operating expenses, but still Amber Ruddy the CFIB'S Director of Provincial Affairs for Alberta says the Alberta government needs to work on increasing confidence.

“Alberta small business confidence remains subdued. The Alberta government can act to inject confidence into the business community by presenting a detailed plan to balance the books,&” she said. “Every quarter we sink deeper into debt, is a missed opportunity to address the small business priority of tackling the ballooning debt and deficit.&”

Ruddy emphasized that the Alberta government should make more of an effort to help small business owners and she thinks that the current government is losing the connection of what small business owners' want.

“When customers aren't coming through the door, the last thing a business owner needs is a higher tax bill or more regulations to comply with,&” she said. “Punitive carbon taxes, higher minimum wages, and new rules for farmers show this government is out of touch with the small business reality. Rejigging government priorities is not only expected, it is a responsible thing to do.&”

The government of Alberta announced recently that the minimum wage will increase to $15/hr by 2018, and paired with the Carbon Tax that was announced earlier this year, Haight believes this will only have a negative effect on small businesses that are having a hard time already.

“It will cause owners to have to layoff employees, cut back on hours by reducing full time workers to part time workers. It will also make it harder for young people who are starting out and looking for a job, as it will be harder for them to attain a position when they have to compete with experienced workers in the trades sector,&” he says.

Like Ruddy, Nikoniuk would also like to see a tax decrease for small business owners but he said he's in favor of paying taxes if the money is used meaningfully.

“I would always be in favor of that but recognizing that's there's a limit on how low you can go … what I don't want to see is wasteful spending, I would like to see thoughtful spending and if that means I have to pay some taxes -no problem.&”

Nikoniuk added that though things are bad right now, he's hoping that business owners will get a chance to turn things around.

“It's hard on people . . . it's hard on all of us but we still live in a damn good province, and I'm hoping that we'll be given the opportunity to make the best of what we've got,&” he said. “I'm the world's eternal optimist.&”

Bernhardt says that although there are trying times ahead, businesses and people have “gotten over the shock of the change to the Alberta economy and St. Paul's businesses are creative and competitive.&” He said, adding that he's “ seen a lot of new ideas come about this year, and I think people realize that it's our creativity that will see us through. We didn't necessarily have the extreme highs of the oil industry here, and we don't have the lows either to the extent that some of our neighbouring communities do.&”

Bernhardt believes that the businesses of St. Paul are resilient and can find their way through the tough times they are facing.

“The downturn is being felt everywhere, and you can't deny that. But, St. Paul keeps going, just look at downtown, there's new business being built vacant spaces are being rented. Let's not focus on the negative, but celebrate the what the town is achieving, and of course in order to make this all possible we need to keep shopping local.&”