Saskatchewan is recording the largest decline in optimism on the Business Confidence Index for the next 12 months, according to the Canadian Federation of Independent Business (CFIB).
The index for the next 12 months fell seven points to 47.6.
“Small business owners are trying to get back on their feet, but increased business costs are holding them back,” said Brianna Solberg, director of provincial affairs for the CFIB.
“The carbon tax increase on April 1, higher insurance and fuel costs, and a persistent lack of demand have negatively impacted their confidence levels for the year ahead,”
The CFIB said tax and regulatory costs were cited as the top cost concern for 76 per cent of small businesses in the province.
He said other reasons behind the decline could be rising insurance costs for businesses and higher tax rates, with 68 percent of small businesses saying this is a challenge for them.
“We have asked the provincial government to consider removing the provincial sales tax on insurance because right now, businesses pay insurance premium tax as well as PST on insurance.”
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Solberg said the biggest decline in confidence came from the agricultural sector, which he claimed was not surprising.
“Part of that may be due to the increase in the federal carbon tax that we saw on April 1 and in some areas, they are not able to afford that cost.”
He said many businesses are cautious about passing on additional costs to their customers, fearing it will affect revenues.
Prairie Proud founder and owner Cole Thorpe said the increased costs for customers means less revenue for his shop.
“The increase in mortgage payments, the increase in the bill at the grocery store, ultimately impacts a local business like ours,” he said.
Prairie Proud, a Saskatoon local business, creates Saskatchewan, Alberta and Manitoba themed clothing and accessories.
Thorpe said property taxes, insurance costs and Canadian manufacturing costs are taking a toll on his business.
“It’s that trickle-down effect that ultimately plays a role in impacting us as the end consumer and as a small business,” he said.
Prairie Proud is celebrating its 10th anniversary this year and Thorpe said they’re in “survival mode.”
“You really have to look at yourself and your budget,” he said. “You have to look at things that are not essential to our business, so it could be additional software that we’re using to help execute certain tasks behind the scenes and just look at yourself in the mirror, “Reducing unnecessary costs in the budget we have.”
Solberg said now is the time to shop local and support small businesses around the province.
“Compassion over convenience can go a long way,” he said. “Businesses are stuck between a rock and a hard place.”
Thorpe echoed his thoughts.
“I know it’s easier to shop at Amazon and Walmart, but ultimately, if you can support a local business, I always try to encourage people to do that,” he said.
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