Confidence levels taking a hit as costs rise for local Saskatchewan businesses | Globalnews.ca

Saskatchewan is recording the largest drop in optimism on the business confidence index for the next 12 months according to the Canadian Federation of Independent Businesses (CFIB).

The index dropped seven points to 47.6 for the next 12 months.

“Small business owners are trying to get back on their feet, but increased business costs keep setting them back,” said Brianna Solberg, CFIB provincial affairs director.

“The April 1 carbon tax increase, high insurance and fuel costs, and a persistent lack of demand have all negatively impacted their confidence levels for the coming year,”

The CFIB said taxes and regulatory costs were cited as the top cost concern for 76 per cent of small businesses in the province.

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She said other reasons behind the drop could be rising insurance costs for businesses and higher tax rates, with 68 per cent of small businesses saying it 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 the insurance premium tax as well as the PST on insurance.”

Solberg said the greatest decrease in confidence came from the agriculture sector, which she claimed isn’t surprising.

“Part of that could be due to the increase in the federal carbon tax that we saw on April 1 and in some sectors, they aren’t able to pass that cost on.”

She said many businesses are cautious in passing extra costs onto their customers, afraid of deterring them and therefore revenue.

Cole Thorpe, founder and owner of Prairie Proud said rising costs for customers means decreased revenue for his shop.

“Increased mortgage payments, increased bills at the grocery store, ultimately that does have an impact on a local business like us,” he said.

Prairie Proud, a Saskatoon local business, creates Saskatchewan, Alberta and Manitoba themed clothing and accessories.

Thorpe said his business is being hit hard by property taxes, insurance costs and Canadian manufacturing costs.

“It’s that trickle-down effect that ultimately plays a role in affecting eventually the end consumer and us as a small business,” he said.

Prairie Proud is celebrating its 10-year anniversary this year and Thorpe said they are in “survival mode.”

“You really have to look at yourself and the budgets that you have,” he said. “You have to look at things that aren’t necessarily required for our business so that could be additional software that we are using behind the scenes to help us execute certain tasks and just look at ourselves in the mirror, at the budgets that we have a reducing unnecessary cost.”

Solberg said that now is the time to shop local and support small businesses around the province.

“Compassion over convenience can go a long way,” she said. “Businesses are stuck between a rock and a hard place.”

Thorpe echoed her thoughts.

“I know it’s easy to purchase from Amazon and the Walmarts, but ultimately, if you can support a local business, I always try to encourage that people do that,” he said.

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