Not having the right people to fill jobs means business owners are working longer hours…

On EDGE: Opinion

Amber Ruddy

Confidence levels among independent business owners in the Northwest Territories are on the rise in 2013, according to survey results, even though some say they are foregoing opportunities due to lack of staff. The majority of businesses surveyed by the Canadian Federation of Independent Businesses operate in Yellowknife, so this is good news for local customers and businesses alike.

The Business Barometer index, released annually for the territories, currently stands at 62.2. The index is measured on a scale of zero to 100. An index level above 50 means owners expecting their businesses’ performance to be stronger in the next year, outnumber those expecting weaker performance. According to past results, index levels normally range between 65 and 75 when the economy is growing at its potential.

The survey, conducted on a monthly basis, is at its highest level since spring 2011.

A healthy one-third of business owners say the general state of business is ‘good,’ 54 per cent indicate it is ‘adequate,’ while only 13 per cent are saying it is ‘bad.’

Too often, business owners are achieving success in spite of governments at all levels, not because of them. One major concern often cited by businesses is that more fairness must be ensured in how government contracts are issued and sourced locally. Businesses shouldn’t have to hire a consultant to navigate the complexities of the tendering process.

Even with the optimism among independent business owners, there is still uncertainty in the future, as 19 per cent of employers are planning to decrease full-time staffing levels. That’s more than the 11 per cent who are planning to increase personnel.

One explanation CFIB has uncovered from small and medium-sized enterprises is that businesses are foregoing opportunities due to lack of staff.

Close to half (47 per cent) list the shortage of skilled labour as the number one limitation on sales and production growth. A quarter (23 per cent), also report a shortage in the semi-skilled category. This points to both a skills and labour shortage.

Not having the right people to fills jobs means business owners are working longer hours and face increased labour costs due to generous salaries and benefits they offer employees. To consumers, the end result is deteriorating customer service.

It should be no surprise that the median family income in Yellowknife is $133,670. This is the second highest in Canada after Wood Buffalo, the city encompassing a large portion of Alberta’s oil sands operations.

Campaigns to come north are most welcome, but a comprehensive labour strategy needs to be developed and implemented. Employers need to have the right tools to attract and retain employees. These range from strategies that can be used by individual businesses, to longer term, multi-level government reform; from tapping into underutilized segments of the population – including older workers, aboriginal people, and youth – to reforming the immigration system by making it more flexible and responsive to the needs of employers.

Other factors like rising fuel or energy costs, and wages have an impact on confidence levels. The price of energy faces volatile fluctuations in Yellowknife. With temperatures dipping below minus -40 C in the dark of winter, there are limited options when seeking energy alternatives. In fact, 65 per cent indicate that fuel/energy is their major cost constraint.

Being an entrepreneur in the North is not for the faint of heart. Entrepreneurs say it’s the competitive challenges such as a large geographic customer base, and opportunities in key sectors that keep them going.

It must be something in the air.

Amber Ruddy is the Alberta and Northwest Territories policy analyst with the Canadian Federation of Independent Business. She can be reached at amber.ruddy@cfib.ca.

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