Alberta small businesses look ahead to 2023 amid fears of a recession: report
The Canadian Federation for Independent Business (CFIB) has released an updated overview of how small businesses across Canada are thinking about the future.
Overall, the report suggests that small business owners across the country are slightly more optimistic about the year ahead than they were a month ago, but their near-term prospects have deteriorated.
The small business confidence indicator recorded 50.9 index points in December, up 0.9 points from November. Despite being an uptrend, it remains at levels typically seen only in recessionary times.
The three-month short-term outlook, meanwhile, fell more than three points to 40.2.
The new report also suggests that 24 percent of Alberta’s small businesses are at risk of closure, which is the highest percentage in the country.
“Two-thirds of them say they have an average COVID-related debt of nearly $200,000. So this is quite a lot of COVID-related debt, and every time interest rates go up, so do those loan payments,” said Jairo Yunis, senior policy analyst at the CFIB.
“Put simply, small businesses in Alberta face significant cost challenges due to a deteriorating economic environment.”
Suspend trade tax?
Yunis added that the CFIB would like to see the Alberta government take an approach to help small businesses, similar to what was announced in Saskatchewan last summer, when that province temporarily eliminated its 2 percent small business tax rate .
Overall, the report found that 66 percent of small businesses in Alberta are still paying off pandemic debt.
Meanwhile, 54 percent say they have yet to return to normal pre-pandemic sales despite hopes there would be a sales boom in early 2022.
“The lack of a skilled workforce remains the number one factor limiting business growth in Alberta and elsewhere in Canada,” Yunis said.
“In the third quarter, there were nearly 104,000 job vacancies in the province. That’s 20,000 more than at the beginning of the year. So this is definitely weighing on the hospitality and service sectors.”
Calgary stakeholders like Ernie Tsu, President of the Alberta Hospitality Association, are hearing these concerns firsthand.
“There are a lot of hospitality businesses that can’t operate at full capacity because they just don’t have that workforce,” he said.
“We see it coming back, there’s a lot of positives happening, but there’s also still the reality of the last two years.”
NOT ALL DESCENT AND DARKNESS
The CFIB report noted that retail, agriculture and construction are the most common sectors expressing a lack of optimism about the province’s economic future.
It’s not all doom and gloom, however. Some retailers, like DUER in Calgary, say they’ve bucked the trend that’s being felt across the province.
“2022 was an incredible year. We opened in 2020 during a pandemic and we weren’t sure what we were going to see and we were pleasantly surprised,” said Zach Matthews, Calgary Store Manager.
“We are exceeding expectations and we have been very blessed with what Calgary has been able to offer us and the returning customer base has been strong.”
Now, the Canadian company wants to continue expanding its product line while looking forward to another profitable 2023.
With Canadian Press files.