Economic pressures proving too much for some small town businesses

Some small businesses in towns and cities around Calgary are struggling to survive in the current economic climate, with some deciding to close their doors for good.

Everything from inflation and the cost of living to energy and fuel costs, twinned with bigger insurance and wage bills are squeezing some stores out of business.

Lindsey Cybulskie opened her locally-focused gift and homewares store, Homegrown House and Pantry, in Airdrie, Alta. in 2018. 

She says a large and sustained drop in sales is forcing her to close.

"Even with COVID, there was a huge wave of shop local so we had a big boom that year, which was surprising," said Cybulskie.

"But in 2021 things started to slow down and then at the beginning of 2022, when things really started getting expensive, that's when things came to a halt here."

Everything in her store is made by Alberta businesses with 175 different vendors supplying her store — 87 per cent of those being female-led businesses.

"Our shopping went down around 20 per cent. We had the same number of people coming in but we weren't getting the same number of sales as before. Everyone was spending significantly less," Cybulskie said.

"Inflation is really high, interest rates are going up, my own mortgage went up and I just know that it's going to continue to get worse for people and it's going to get worse next year with people having high credit card debt."

She says she's not alone in making the tough decision to close and move on.

"I know of a couple that are closing and some of our vendors and other businesses in town have reached out to me saying they're thinking the same," said Cybulskie.

The local chamber of commerce says the cost of running a business is high in Airdrie and it's a big challenge for the individuals and families running them.

"It's heartbreaking for small businesses to close," said Marilyne Aalhus, executive director with the Airdrie Chamber of Commerce.

"With COVID there were subsidies and loans involved but now all of that's gone away, loans are being expected to be paid back and with the employment crisis and the cost of utilities and all of those things, it compounds."

From a business point of view, Aalhus said, there needs to be a lot more done and municipalities need to step up and help their small businesses — saying that they are "the heart of their communities."

Other business owners in towns surrounding Calgary, including Okotoks, are also closing their restaurants and stores as their customers re-prioritize their spending and focus on their own economic survival.

Back in December the Canadian Federation of Independent Business reported that nearly a quarter of Alberta small businesses were at risk of closure — the highest number in Canada.

January's small business confidence indicator for Alberta showed one of the lowest readings of short term business confidence, standing at a paltry 4.35 per cent.

"Small businesses aren't very optimistic in the short term but long term optimism remains relatively stable based of the data we've received," said Andrew Sennyah with the Canadian Federation of Independent Business. 

Sennyah says the biggest cost constraints for businesses in Alberta are energy and fuel, insurance and wages.

He says skilled labour is also an ongoing issue for many businesses, along with weak domestic demand.

"Consumers aren't spending money so businesses aren't seeing a demand for their goods and services," said Sennyah.

As for solutions, he says government has a big role to play in easing some of the pain.

"The government has instituted some affordability measures and to a degree they have helped but what we continue to call on the provincial government to do is to follow the lead of Saskatchewan and temporarily suspend the small business tax rate," he said.

That rate currently sits at 2 per cent. Sennyah says the CFIB would like that cut in half to 1 per cent or suspended temporarily.

The CFIB is also appealing to Albertans to focus on shopping local and supporting small businesses.

He says that can also play a part in helping businesses to stay afloat and survive.