A Small Business Mantra

Maybe this year will be better than the last – Counting Crows lyrics

About 95% of businesses in Alberta are small businesses.  They employ about one third of the workforce. Small businesses in Alberta have had it tough and the Alberta government isn’t helping much.  Severely Normal Albertans shop at small businesses often!

In this Alberta downturn many small businesses have a difficult time making ends meet.  And the recession was ugly GDP was 322 billion in 2014.  It declined to 288 billion in 2016, roughly a 10% drop.

Small businesses that are connected to the capital intensive resource sectors take a hit. Private sector capital spend fell 22.6% in 2015, and declined a further 17.9% in 2016 to $62.1 billion. Construction spending declined by 20.7%.  Public sector investment rose filled part of the gap up 17% in 2015 and 19% in 2016 to $10.7 billion.

Small businesses that provides service are crunched too.  As employment income declined so did discretionary spending:

  • Compared to January 2015 average weekly earnings in Alberta have dropped 4.9%. The construction sector dropped 10% and the energy and professional technical sector 8%.
  • Unemployment rate in Edmonton is 7.9% and Calgary’s is 9.3%.  
  • Alberta has experienced six consecutive quarters of net out-migration.
  • The advocacy groups for small business are critical of government policies.  Increases in minimum wages,
  • electricity policy change,
  • carbon taxes and deficit spending are seen as a drag on small business sustainability.
  • A reduction in small business corporate taxes to 1% and a $ 100 million in subsidies for international trade don’t offset the changes to small business.

And to end on a positive note Severely Normal Albertans should recognize the resilience of businesses. In May there were 3,825 new business in-corporations, up 17% year over year. And in May, Alberta added a net total of 2,100 jobs.