Small Businesses Are Important

Do small businesses have a fighting chance against today’s challenges?

By Richard Woodbury


Source: Originally published in the October 2010 Nova Scotia Business Journal (Oct. 5) — COVER STORY
Do small businesses have a fighting chance against today’s challenges?

By Richard Woodbury


Source: Originally published in the October 2010 Nova Scotia Business Journal (Oct. 5) — COVER STORY

When a second gas station in Amherst announced it was closing its doors due to the border gas wars with Brunswick, it raised a red flag that could not be ignored by small businesses and communities across Nova Scotia.

John and Kittee Baxter, the owners of Steamboat’s Convenience, blamed the closure of their business on the difference in gas prices between the two provinces. “We really tried to make it work, but when there’s such a huge gap in the price of gas there’s no way we can compete,” told Kittee Baxter in the Amherst Daily News. “I’m really disappointed with what has happened, but more than that I’m pretty frustrated because it appears as though this government really doesn’t care about Amherst.” The Baxters’ decision to close came just a couple of weeks after Co-Op Atlantic announced its gas station on Lawrence Street would be shut down, citing the same issues.

Unfortunately, the challenges which ultimately sealed the fate of these gas stations mirror what many other small businesses across the province are facing today.

Small businesses are an important employer in the province. Small businesses with fewer than 50 employees represent 97.4 per cent of the province’s approximately 54,000 businesses and employ almost 29 per cent of the total number of workers in Nova Scotia, according to data from Statistics Canada. StatsCan also reveals that the number of self-employed individuals topped 60,000 in Nova Scotia last year.

Every October, Nova Scotia pays tribute to small businesses and the important role they play in our society and economy during Small Business Week. While it is a celebration of small businesses, it is also seen as an opportunity to raise awareness of the challenges they face.

“Creating an environment where small business can thrive is vital, but, quite frankly, we haven’t done all that we can do to make that happen,” says Charles Cirtwill, president and CEO of the Atlantic Institute for Market Studies.

Cirtwill has been involved in public policy discussions for the last 20 years and he says things are worse today.

“We know our taxes too high, we know our red tape is too intense, we know we are not helpful to our small businesses, yet we continue to do the same things year in and year out,” he says.

With the election of the provincial NDP last year, there was hope for change. The party was elected on the promise of making life better for Nova Scotians. Unfortunately change doesn’t happen overnight and many say the challenges facing small business are an accumulation of things years in the making.

“It’s much tougher, way tougher,” says Lawrence Sawler of Glyda’s Fruit and Vegetables in Western Shore. “There’s no ifs, ands, or buts about that.”

Glyda’s has been in operation for almost 30 years. Sawler says the recent minimum wage increase is only one aspect making it tougher to make a profit. Finding qualified staff is another problem.

And with an aging population, finding qualified labour is only going to get worse.

This will hit small businesses particularly hard for two reasons, says Cirtwill. First, smaller businesses can’t afford to increase salaries the way bigger businesses can to attract and retain talent. The other reason is that small businesses rely on family to a greater degree for their labour pool.

“With families shrinking, so is the labour pool,” says Cirtwill.

One hope for improving the business climate lies with the economic development strategy the provincial government is working on. The strategy should be released “sometime soon,” says Percy Paris, the minister of economic and rural development.

While short on specific details, Paris says the party wants to foster a culture of innovation where people are encouraged to invest in themselves, invest in Nova Scotia and invest in Nova Scotians.

“If there are barriers, we want to know about them and will work together to try to eliminate them,” says Paris.

For many, the tax system is a barrier, especially since New Brunswick started cutting taxes.

“New Brunswick has a far more competitive tax system,” says Leanne Hachey, Atlantic vice-president for the Canadian Federation of Independent Business (CFIB).

She says lower taxes allow business owners to keep more of their earnings, pay employees higher wages, invest in better equipment and offer lower prices. Meanwhile, the tax system in Nova Scotia does the opposite, Hachey says.

“I, we as a government, don’t have any control over what New Brunswick does,” says Paris.

In Nova Scotia, the provincial government strives to find the right balance between taxation and services offered, he says.

“We also understand that we have to live within our means and we can’t go further into this financial hole that already exists for us.”

But the news isn’t all bad for small businesses. Hachey says in a survey of members, the CFIB found members maintained a good work life balance for themselves and their employees. There has also been improvement on reducing red tape. Nova Scotia is considered one of the leaders for its efforts to reduce it.

While Cirtwill appreciates the work done so far, he questions how effective the efforts have actually been.

“When you start with a mountain and you remove two feet a year, you’re going to be at it for a while,” he says.

Looking to the future, Hachey has her worries about small businesses. In talks with the CFIB’s members, she says small business owners use words such as frustrated, fed up and helpless. Some even wonder why they even started a business in the first place. 
And worst of all, “some don’t encourage their kids to start businesses in Nova Scotia,” says Hachey.

As we enter Small Business Week (Oct. 17-23), it’s clear Nova Scotia’s small businesses need help.

“Small business week is nice, but we need to focus on small business year round,” says Cirtwill. Nova Scotia’s future prosperity depends on it.