Q1 survey indicates business optimism rising despite higher cost and labour concerns

Calgary, Alberta, March 23, 2023 –According to the 2023 Q1 Canadian Survey on Business Conditions, conducted by Statistics Canada in collaboration with the Canadian Chamber of Commerce, 55.1 per cent of Calgary based businesses are concerned with rising costs compared to 43.4 per cent in Q4 2022 – well above the national average. Businesses are also grappling with a more acute labour shortage combined with ongoing supply chain issues but have not adopted technology to offset rising costs and limited access to labour. Despite these headwinds, 62.5 per cent of businesses are optimistic about their future, up from 57.5 per cent last quarter.

“Compared to the national average, Calgary businesses are more concerned about rising costs – despite sentiment Alberta will be relatively stable through a looming recession,” says Deborah Yedlin, President and CEO of the Calgary Chamber of Commerce. “Calgary businesses are resilient, but we need governments to double down on some of the key initiatives underway to address rising costs, the skills mismatch evident in a higher unemployment rate, and support technology adoption.”

Rising costs & business profitability

Businesses continue to feel the pinch of rising costs including inflation, inputs, and interest rates. Further, cost concerns are heightened when compared to the national average for Q1, which sat at 46.0 per cent. Concerns over rising costs are impacting business viability, with nearly twice as many businesses expected to close in Calgary compared to the national average.

Recommendations for government

• Use taxation as a tool to maintain Alberta’s competitive advantage, including maintaining the corporate tax and lowering small business and non-residential property tax.
• Reduce fees and licensing costs where possible and provide clarity on processes and timelines to help businesses plan accordingly.
• Maintain and expand existing affordability supports including the fuel tax relief, electricity and natural gas rebates and low-income transit passes.

Labour shortage

The ongoing labour shortage remains a challenge for businesses, however, medium to larger sized businesses are feeling more of a struggle compared to small businesses. In light of rising unemployment rates and upward pressure on wages, a skills gap and affordability concerns for businesses are likely exacerbating the current labour shortage. While it is encouraging to see pressure ease off small businesses – given they comprise approximately 95 per cent of Calgary’s business community – 81.0 per cent of businesses anticipate recruiting or retaining skilled employees will impact their business in the next three months.

Recommendations for government

• Continue to refine immigration systems to increase the size of our labour pool and support accreditation for newcomers.
• Provide ongoing support for upskilling reskilling including increasing investments to post-secondary education for in-demand skills.
• Continue to invest in marketing campaigns such as ‘Alberta is Calling' to advance our reputation and ability to attract skilled workers.

Technology

Few Calgary businesses anticipate adopting new technologies in the coming year. This is a major concern for both the city and the province given how agile and mobile capital is. Over 73 per cent of Calgary businesses – across all sectors and sizes – do not see themselves adopting or implementing any technology in the next year. Governments must work together to encourage technology adoption and investments in new technology.

Recommendations for government

• Advance local procurement and adoption of technologies within government.
• Increase awareness of opportunities to adopt and implement technology within the business community.
• Encourage investments in Research and Development by providing incentives and support.
• Enhance access to capital, invest in local technology pilot programs and attract a robust talent pool of founders and developers.

Supply chains

Canada’s – and Alberta’s – ability to remain competitive hinges on efficient supply chains. In the past three months, 41.4 per cent of Calgary businesses found supply chains have worsened, with 95.5 per cent of businesses finding increased costs to be a major factor while 72.1 per cent of businesses faced increased delays in deliveries of inputs, products or supplies and 71.3 per cent found product availability decreased.

Recommendations for government

• Bolster investments in transportation and supply chain infrastructure, including rail and aviation.
• Work with industry to expand mineral supply chains and provide investment incentives to boost the competitiveness of Canada’s critical minerals sector.
• Collaborate with all levels of government to develop a national battery metals value chain.
• Reduce internal trade barriers such as licensing, transportation and labour mobility restrictions.
• Develop a domestic trade acceleration initiative focused on increasing domestic trade volumes.
  

The Calgary Chamber urgently calls on all levels of government to implement and accelerate key measures that support business viability and sustainability. We encourage governments to keep controlled costs like taxes, fees and licensing low; implement measures to address skills gaps; provide support for new technology adoption and invest in supply chain infrastructure.

ABOUT THE CALGARY CHAMBER OF COMMERCE

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.

Media opportunities

For media inquiries, please contact Shannon Hazlett, Senior Public Relations Advisor, at media@calgarychamber.com.