Labour shortages, supply-chain issues weigh on Quebec entrepreneurs


“We knew that the shortage of employees was slowing production, but now it’s clear it’s starting to discourage entrepreneurship.”

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Labour shortages and supply-chain issues are starting to weigh on Quebec entrepreneurs.

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Some 58 per cent of small-business owners in Quebec wouldn’t advise starting a business right now, while a mere 18 per cent would recommend it, according to a new poll conducted by the Canadian Federation of Independent Business. Nine out of 10 survey respondents cited the current scarcity of labour as the biggest reason for growing bearish about entrepreneurship.

“Entrepreneurs are resilient people, but morale is pretty much rock bottom these days,” François Vincent, vice-president for Quebec at CFIB, said in a telephone interview. “We knew that the shortage of employees was slowing production, but now it’s clear it’s starting to discourage entrepreneurship. Quebec has to do something to address the concerns of small businesses in every sector of the economy.”

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Other key reasons cited by small-business owners include supply-chain delays or lack of inventory, cited by 59 per cent of respondents. Personnel issues, pandemic-related stress, administrative burdens and high taxes also made the list.

CFIB polled 548 of its Quebec members between Sept. 9 and 27. CFIB represents about 20,000 Quebec businesses.

Small businesses generate about 30 per cent of Quebec’s gross domestic product while providing about 68 per cent of the province’s private-sector jobs, according to CFIB data. More than half of Quebec businesses have fewer than five employees, while 72 per cent have fewer than 10 employees.

Although Quebec’s economy has bounced back sharply from last year’s lockdowns as COVID-19 cases stabilize, many small businesses are still fragile. More than half of businesses have yet to reach their pre-pandemic revenue level, while average debt now approaches $100,000, CFIB data indicate.

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As Quebec finance minister Eric Girard gears up to present his fall economic update next month, CFIB has put together a 34-page document that includes 28 recommendations aimed at helping small businesses emerge from the pandemic in better shape.

Chief among them are small-business tax reductions and improved tax credits, which CFIB says would allow many of its members to raise wages. Higher immigration ceilings and simplified administrative procedures would also help, the group says.

About two-thirds of entrepreneurs polled by CFIB earlier this year said they would increase employees’ salaries and benefits if they had more disposable income. Forty-seven per cent said they would buy new machinery to improve productivity, while 42 per cent said they would spend the money on training and 41 per cent said they would hire new employees.

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Some 34 per cent of small businesses have had to turn down contracts due to labour scarcity, CFIB’s most recent poll found. That’s up from 26 per cent in January. More than half of small business owners say they’re working more hours as a result of the labour situation.

“This shortage is only going to get worse,” said Vincent. “Quebec’s active population is going to drop over the coming years. We need to help companies now because the more we wait, the bigger the crisis will get.”

ftomesco@postmedia.com

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