Labour shortage and rising costs impeding business recovery

Calgary, June 23, 2022 – The Q2 Canadian Survey on Business Conditions (CSBC) indicates economic recovery will be uneven across sectors, with challenges exacerbated by an ongoing nationwide talent crunch combined with continued cost pressures and supply chain challenges. The survey was conducted by Statistics Canada in collaboration with the Canadian Chamber of Commerce.

Nearly 44 per cent of Calgary respondents are worried labour challenges will limit business growth, with 86 per cent of energy-related businesses expressing concern. On rising costs of doing business, 48.4 per cent of respondents anticipate higher operating expenses and only 24.9 per cent expect a boost to operating income.

“While there is optimism around recovery, the latest survey highlights significant challenges, which will require a suite of solutions developed through government and industry working together,” says Deborah Yedlin, President and CEO of the Calgary Chamber of Commerce. “From an immigration strategy to attract skilled workers to post-secondary investments that enhance access to training, we must activate all levers to ensure we don’t leave opportunities on the table. As the global competition for talent heats up, sharing Calgary’s value proposition as a city that consistently ranks near the top of major cities worldwide on affordability and quality of life will also be critical.”

Labour force shortages

Across the country, competition for talent continues to be a pain point for many businesses, with around one-third expecting labour difficulties in the coming quarter. In Calgary, accommodation and food services industries are most challenged, with nearly 70 per cent of businesses feeling the pinch. Larger businesses are more concerned about recruiting skilled employees compared to smaller businesses, with 64.7 per cent of respondents with 20 to 99 employees concerned, and 71.5 per cent of businesses with 100 or more employees concerned.

Several other labour-related challenges also emerge from second-quarter survey data:

• 27.5 per cent are worried about having enough staff, while 33.2 per cent are concerned about recruiting the right skills for the job.
• 64.5 per cent say recruiting and retaining staff is more challenging now, compared with 12 months ago. Only two per cent say it is less challenging.
• 46.8 per cent of construction industry respondents are concerned about labour shortages, with 52.9 per cent concerned about attracting skilled labour.
• 48.6 per cent of manufacturing industry respondents are concerned about labour shortages, with 50.3 per cent concerned with attracting skilled labour.

Proposed solutions

The Calgary Chamber encourages all orders of government to consider short and long-term solutions to address labour challenges:

• Develop and implement an immigration strategy that supports long-term economic growth across sectors.
• Invest in all aspects of the talent pipeline including support for post-secondary and work-integrated learning programs.
• Eliminate barriers to recognizing foreign credentials and facilitate labour mobility across international borders.
• Ensure policies promote inclusive economic growth to encourage equitable education and workforce participation among those historically marginalized and underrepresented.
• Support for higher wages to attract childcare workers and encourage successful implementation of a provincial affordable childcare program.
• Invest in Calgary’s vibrancy including arts, culture, and entertainment, diverse housing options, amenities and services, and transportation infrastructure.

Rising costs of doing business

With the recent surge in energy prices - combined with global events such as the war in Ukraine, the ongoing impact of the pandemic, and related supply chain disruptions - businesses are feeling inflationary pressures across their operations.

In Calgary, 50.7 per cent of businesses are concerned about the rising costs of inputs while 40.7 per cent are concerned about transportation costs. Cost pressures are emerging in other areas as well:

• 30.4 per cent are concerned about acquiring inputs or products.
• 78.9 per cent indicate supply chain challenges have worsened over the past quarter while only 12.5 per cent expect an improvement in the coming three months.
• 38.8 per cent are concerned about the cost of insurance.
• 31.2 per cent are concerned about fluctuations in consumer demand.

Proposed solutions

Similar to labour challenges, several solutions can be introduced to address rising costs and associated supply chain challenges:

• Reduce trade barriers across provincial borders.
• Reduce or eliminate tariff and non-tariff barriers across international borders.
• Introduce procurement supports to help businesses implement new supply chain strategies.
• Avoid introducing additional fees and taxes, including corporate and property tax.
• Prioritize and expedite federal supply chain investments to improve the flow of goods, introduce supply chain efficiencies, and cut red tape.

About the Canadian Survey on Business Conditions

The Canadian Survey on Business Conditions (CSBC) was created in the spring of 2020 by Statistics Canada in partnership with the Canadian Chamber of Commerce to provide timely, relevant data on business conditions in Canada, as well as business expectations and views on emerging issues. The 2022 Q2 CSBC was collected by Statistics Canada from April 1 to May 6, 2022. The sample of businesses in the Metro Calgary survey includes responses from 499 businesses and was conducted via electronic questionnaire, using a stratified random sample of business establishments with employees. Population totals are estimated using calibration weights.

About the Calgary Chamber

The Calgary Chamber exists to help businesses thrive. As the convenor and catalyst for a vibrant, inclusive, and prosperous business community, the Chamber works to build strength and resilience among its members and position Calgary as a magnet for talent, diversification, and opportunity. As an independent, non-profit, non-partisan organization, we build on our 131-year history to serve and advocate for businesses of all sizes, in all sectors, and across the city.

For media inquiries, please contact media@calgarychamber.com or call 403-750-0414.