Small businesses in B.C. called on candidates and parties in the recent provincial election to address payroll and benefits cost challenges, and public safety concerns.
These factors are increasing the financial and emotional burden faced by business owners and their employees, according to those who spoke with BIV.
“The climate is the worst that it has ever been for business,” said Business Improvement Areas of BC (BIABC) former president and board member Teri Smith.
Between June 6 and 28, the BIABC surveyed over 500 small and medium-sized businesses across the province to analyze the current state of the industry and its challenges.
Ninety-seven per cent of respondents indicated the cost of doing business increased over the last five years, with 53 per cent suggesting it increased by more than 20 per cent.
Strikingly, 60 per cent reported a decrease in profit margins, with respondents saying the top contributors to this drop were payroll and benefits, insurance and the cost of goods sold.
Smith, who is also the executive director of the West End Business Association, said the lasting effects of the pandemic and a decrease in public safety were also significant.
Smith said the loss of product through theft, along with property damage, the cost of purchasing preventative measures and an increase in insurance costs were important public safety factors that have been putting upward cost pressure on small business owners.
According to BIABC’s survey, 82 per cent of respondents said that they had experienced increased fear from street disorder, drug-related activity and vandalism. Another 61 per cent said they had invested in safety measures like cameras and alarms.
“The increased fear, anxiety and stress associated with running and operating a business in Vancouver, and trying to ensure their employees are safe, as well as customers, is really an issue,” Smith said.
“It’s just creating this perfect storm for our businesses at the moment.”
Since 2023, 86 per cent of owners have seen an exacerbation of drug and mental health-related activity, while 58 per cent reported increased violence, and 56 have experienced a spike in theft, according to the survey.
Despite the prominence of issues related to public safety, Smith said the biggest factor driving up costs for small businesses is payroll, due to the policy and tax changes that have taken effect over the past few years.
Year-over-year minimum wage increases, the implementation of the employer health tax and the introduction of five paid sick days have negatively affected profits, said Smith. These measures can also help businesses attract and retain employees, and sixty per cent of the BIABC survey respondents support a review of the five-day mandatory sick day policy.
Inflation, meanwhile, has increased the cost of doing business, and passing those costs on to consumers is only viable up to a certain point, Smith said.
Additionally, although the labour shortage is not as pressing an issue as it a couple years ago, the lack of affordability is preventing people from living close to where they work and impacting staff attraction, according to Smith.
She added that expenses have forced businesses to make tough choices and reduce staff numbers because they can no longer sustain payroll and benefits costs.
In September 2024, the unemployment rate for B.C. was six per cent, up half a percentage points on a year-over-year basis, according to a BC Stats report released on Oct. 11.
“Businesses want to be heard; affordability issues are not just on the resident side, businesses are facing affordability issues at the same scale, if not more,” said Smith.
“Having that understood by government when they’re making policies is critical; having proper consultation when you’re putting in place policies that will have a trickle-down effect.”
Small businesses call for support
“It’s a situation that for many has become unbearable—and they will want and expect decisive action by our next government,” said BIABC president Jeff Bray, when the organization’s survey results were first released.
Bray said small businesses aren’t only the backbone of local economies, but also play a significant role in the vibrancy of our neighbourhoods.
He called on B.C.’s new government to listen to and adopt policies that make sense for businesses.
Smith said more investment needs to be put in place to address public safety via treatment, prevention, enforcement and harm reduction.
An important piece missing was providing support and care for those who suffer from substance abuse when they’re asking for it, said Smith.
In September, the BC NDP announced the introduction of involuntary care in extreme cases where those suffering from addiction were suffering from brain injuries.
“We’re looking at all the pillars that are going to help improve community safety for everyone and get people the support and services that they need,” she said.
According to the BIABC survey, 39 per cent of small businesses in B.C. say they believe they won’t be able to continue operating past two years and 52 per cent say they will only be able to continue in business for four years under current conditions.
B.C.’s main political parties factored some small business concerns into their platforms in the lead up to the provincial election on October 19. The Conservative Party of BC said it would
reduce small business taxes to one per cent—and to zero per cent when finances allow. The party also said it would crack down on crime, and cut approval and processing times for building and business permits.
The BC NDP said it deliver more protection and less red tape for small businesses, according to their platform.
Helping businesses avoid the high cost of resolving disputes with landlords, changing PST filing to quarterly from monthly and removing barriers to establishing or growing businesses in B.C. were also promised, along with modernizing liquor laws for food and drink establishments.
