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Home Woman business Nearly a quarter of Alberta small businesses at risk of closure: CFIB

Nearly a quarter of Alberta small businesses at risk of closure: CFIB

New data from the Canadian Federation of Independent Business (CFIB) shows many Alberta small businesses have worsening optimism ahead of the new year, while nearly a quarter are risking closure.

According to the CFIB’s small business recovery dashboard, 24 per cent of small Alberta  businesses are at risk of shutting their doors — the highest in the country.

Manitoba followed Alberta with 20 per cent of its small businesses risking closure, followed by B.C., Ontario and PEI at 19 per cent.

CFIB Alberta director Annie Dormuth told Global News the retail, agriculture and construction sectors have felt the biggest impacts.

“All of these compounding challenges and a slow economic recovery,” Dormuth said. “Every business owner thought the end of 2022 was going to be a big economic boom… that simply was not the case.”

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The data showed 54 per cent of Alberta small businesses aren’t back to pre-pandemic, or normal, revenues.

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Nationally, small business owners have a more optimistic outlook on 2023 than they did last month, but short term confidence is dwindling.

CFIB’s small business confidence indicator showed short-term confidence in the economy amongst Alberta small businesses sits at 44 index points, which is relatively unchanged from last month.  The long-term confidence index increased nearly three points to 52.9 index points.

Dormuth said the lack of short-term confidence amongst the province’s small business owners is due to uncertainty of what the first few months of the year will bring.

“All of this is compounded by challenges, in the form of rising interest rates and inflation,” Dormuth said. “All of that is putting a lot of uncertainty on business owners.”

In Edmonton, that uncertainty has created new challenges for Paul Shufelt, who is the chef and proprietor of Robert Spencer Hospitality.

The group offers catering and owns four restaurants, and has weathered a tough 2022.

“The pandemic seems to be subsiding a little bit, we’re going to get back to normal. Oh wait, now we have major supply chain issues, staffing shortages. If that’s not enough, we’ve got inflation and the cost of everything doubling or tripling — if you can find it in the first place,” Shufelt told Global News. “It’s sort of been death by 1,000 cuts.”

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The business, Shufelt said, is working daily on a delicate balance of charging enough to keep the doors open, while also keeping prices fair for their customers.

While there’s hope January 2023 will be better for business than the year prior, with the now-eased pandemic health measures, Shufelt said there is still concern over a “looming recession” and interest rate hikes.

“It’s apprehension,” he said. “It’s still looking for that light at the end of the tunnel.”

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Confidence among small businesses dropping amid high debt, interest rates: CFIB

However, there is “moderate” optimism at Madame Premier, a retail store in Calgary’s Inglewood neighbourhood.

Its founder, Sarah Elder-Chamanara, said the year was more challenging than expected, but sales improved with a return to normal, especially on Black Friday and during the holidays.

“December is such a critical month for retailers,” she told Global News. “How well we do in December is a barometer of how much strength and confidence we can have going into the new year.”

The business didn’t take on pandemic debt like many others across the province.

CFIB data showed two thirds of Alberta small businesses are still working to pay off debt incurred over the COVID-19 pandemic.

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But Elder-Chamanara noted that support for small businesses is still needed as much as it was over the last two years.

“That was a bit disappointing over the holiday season, because in this return to normal, we lost that focus on the shop local; there was such an emphasis placed on it during the pandemic,” she said. “Now that the world is back open again, that focus on local still has to be there.”

&copy 2022 Global News, a division of Corus Entertainment Inc.

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