A recent report by the Canadian Federation of Independent Business (CFIB) sheds light on the significant economic impact of labour shortages on small businesses in Canada. The study reveals that these businesses missed out on more than $38 billion in revenue opportunities last year alone, as they had to reject or delay contracts and sales due to workforce challenges. The report emphasizes the need for comprehensive policy changes to address the multifaceted nature of the labour shortage issue.
The Toll on Small Businesses
Labour shortages impose a substantial financial burden on small businesses, leading to increased work hours for employers, reduced operational hours, and the refusal of services and contracts. Laure-Anna Bomal, CFIB’s economist and the report’s author, highlights that the lost opportunities amount to over $38 billion, indicating a significant share of revenue that could have been invested in business growth or automation.
The construction sector faced the most substantial loss of business opportunities, with a staggering $9.6 billion missed in the last year. This sector, along with manufacturing, suffered the most due to a lack of workers. The consequences of these missed opportunities extend beyond individual businesses, affecting the ability of business owners to pay down debts and contribute to local communities.
Addressing Labour Shortages: A Multi-Faceted Approach
Recognizing that a single policy change cannot solve the labour shortage crisis, the CFIB proposes a collection of measures targeting three age groups: youth (15-24), core age (24-64), and older workers (65+). The recommendations include increasing work-integrated learning in high schools to boost youth participation, refining employment insurance program designs for the core-age group, and revisiting tax policies or introducing tax credits to encourage experienced workers to extend their careers.
Christina Santini, Director of National Affairs at CFIB, emphasizes the urgency of finding innovative ways to increase participation in the labour market across all age groups. As Canada’s population ages, the report underscores the need for proactive measures to prevent worsening shortages and their associated costs.
Nova Scotia’s Labour Shortage Woes
The report also delves into Nova Scotia’s specific challenges, revealing that businesses in the province missed out on approximately $1 billion in potential sales and contracts in 2022 due to labour shortages. Duncan Robertson, senior policy analyst in Nova Scotia with CFIB, highlights that the construction and manufacturing industries were particularly affected.
To address the shortfall of 11,000 tradespeople projected by 2030, the Nova Scotia government is turning to immigration and participating in job fairs. Robertson and others call for a review of the province’s tax system to ease the burden on businesses struggling to attract and retain workers, emphasizing the need for a comprehensive plan to address housing issues, a significant barrier to hiring staff.
In conclusion, the Canadian Federation of Independent Business’s recent report unveils the staggering economic toll of labour shortages on small businesses in Canada. With over $38 billion in revenue opportunities missed last year alone, it is evident that a comprehensive and multi-faceted approach is required to address this pressing issue.
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In collaboration with businesses of all sizes, Directpath Canada Consultation Inc. aims to contribute to the economic growth and sustainability of Canada by ensuring that skilled workers find their way to where they are needed most. As we collectively navigate the evolving landscape of the labour market, partnering with experts like Directpath Canada Consultation Inc. can pave the way for success and resilience.
Jon Eric de Belen, RCIC
