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The price of a burger is going up. The price of a beer is going up. The price of romaine lettuce is going up. The price of gas is going up. Your taxes are going up.
You would have to be living under a rock to not notice all the price increases, and expenses going through the roof. It is not just this year, but it seems lately we are simply being piled up on from every corner. There are plenty of reasons why.
The price of a burger at your favourite pub or restaurant may be up due to rising costs due to supply chain issues and distribution fuel tax surcharges for deliveries.
The cost of feeding your family isn’t going down. In fact, inflation has been running high since all the government stimulus was pumped into the economy during the height of the COVID-19 pandemic. It may have been a benefit that assisted with a quicker recovery, but worldwide supply chain issues and a falsely stimulated need to spend due to the extra cash has widespread long-term implications. Inflationary pressures increase on all sides, leading the Bank of Canada to suppress inflation by raising interest rates and the cost of borrowing, making mortgage rates rise back to more “historically normal rates” but making your monthly payments increase dramatically.
For businesses, there is no end in sight. In fact last week, the provincial government announced a nearly seven per cent increase in the minimum wage, moving from $15.65 per hour to $16,75. The move was of course to counter the ever increasing inflation problems. Now there are plenty of folks who will applaud the increase as much needed.
But let’s look at that increase from the eyes of a small businessperson. They have been paying higher wages to retain and attract employees. The Nelson and District Chamber in partnership with the BC Chamber of Commerce and several food and beverage and business associations have been working closely with government on keeping the increase at a manageable number, asking that it take a balanced approach and cap this year’s increase at no more than three per cent.
This sudden increase ignores that minimum wage increases are paid for by businesses who pass costs along to consumers. We estimate this wage increase will cost the average neighbourhood pub in B.C. an extra $1,000 per week in labour costs alone.
Such a large, sudden increase on labour costs while industry is still recovering from the pandemic will have serious consequences. It is very likely that these small businesses will have no choice but to raise prices for consumers or find ways to work with fewer staff.
Since 2020, small business has already absorbed significant government-imposed increases to labour costs, such as: the employer health tax, mandatory five paid sick days, a new statutory holiday, WorkSafeBC premium increases, and significant minimum wage increases to CPP and EI. These constant cost increases hinder our ability to create jobs and sustain economic prosperity.
Faced with the ongoing challenges caused by high interest rates, inflation, and supply chain challenges, B.C. businesses need help. It’s getting increasingly challenging for those small businesses that are at the centre of driving our local economies.
Unfortunately, neither the federal or recent provincial budgets provided very little to get small business excited and certainly doesn’t stimulate entrepreneurship to the degree we were hoping for. The Nelson and District Chamber continues to work through the BC Chamber and with elected officials to make sure they understand the challenges businesses, especially those small and family owned businesses continue to face.
The pressures of increasing costs leading to increased taxation will continue to mount this spring as the City of Nelson and Regional District of Central Kootenay unveil their budget and taxation needs. All indications are that RDCK taxes will be double digits for business, while the City continues to grapple with rising costs that will inevitably be passed along.
Our region is primarily driven by the small business sector that is just coming off three years of struggles and regulations with the pandemic. Now increased costs of doing business coupled with inflation leaves many in a precarious financial situation.
Tom Thomson is executive director of the Nelson and District Chamber of Commerce.
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