Survey of Metro Vancouver businesses says costs expected to rise and consumers likely to pay more

A survey of Metro Vancouver businesses found nearly half expect their operating costs to rise in the coming months, and the majority expected those costs would be passed on to consumers.

The Canadian Survey on Business Conditions found 48 per cent of Metro Vancouver businesses expect their costs to rise in the next three months.

Of the surveyed businesses, 65 per cent reported they expected to pass any rising costs on to consumers — 37 per cent said they were "very likely" to do so, and 28 per cent said they were "somewhat likely."

"We're seeing higher inflation, higher costs across the board," said Bridgitte Anderson with the Greater Vancouver Board of Trade. Her organization looked at Metro Vancouver data from the survey's cross-Canada questionnaire.

"They're also feeling the impact of increased costs, and they're left in many cases with no other option but to pass off on those costs to customers and to clients."

'We are expecting more increases'

The board, in a statement, reported that the survey found Metro Vancouver businesses' top concerns were inflation, pricier inputs, rising interest rates, expensive real estate and growing costs for recruiting skilled employees.

Judy Reeves, the owner of Edge catering in Vancouver, says she's seeing it already.

While she says her business is doing well, global forces like the pandemic, inflation, climate change and the war in Ukraine have driven up the costs of her business' main input — food.

"We've already seen it, and we are expecting more increases," Reeves said, adding increasing her costs is unfortunate but necessary.

"We have to be on top of it, otherwise we're not as profitable, and in this type of business our profit margins are very, very slim."

Andrey Pavlov, a professor of finance with Simon Fraser University's Beedie School of Business, says governments should act to provide more support for businesses.

He says while governments have spent considerably during the pandemic to keep businesses afloat, underlying issues remain.

"We have not made it any easier to run a business in Canada or in B.C. in any way, shape or form," Pavlov said. "There's no regulation that has been reduced, no red tape that has been eliminated, no taxes have been reduced."

Province says it is taking action

B.C. Minister of Jobs, Economic Development and Innovation Brenda Bailey did highlight government actions in an emailed statement, however — a B.C. Hydro credit for commercial customers, small business property tax flexibility for municipalities, a cap on food delivery fees and increased access to the small business tax rate.

She also said expanded child care and new training opportunities will help more people get into the workforce.

"As a businessperson myself, I have a deep understanding of the challenges that businesses are facing," Bailey said.

"Labour shortages and rising costs for people and businesses are top of mind for our government as global inflation is making life more expensive around the world and here in B.C."

The Canadian Survey on Business Conditions was conducted online by Statistics Canada in partnership with the Canadian Chamber of Commerce between Oct. 3 and Nov. 7, 2022, among 756 employers in the Metro Vancouver area.