Rising costs hit businesses

THUNDER BAY, ONT. — The Canadian Chamber of Commerce has released its quarterly report that reflects business conditions at the end of 2022.

Charla Robinson, president of the Thunder Bay Chamber of Commerce, says the report, which was released in December, is prepared by the Canadian chamber and Statistics Canada and calls attention to challenges faced by businesses.

“The biggest challenge is the rising cost of doing business,” Robinson said. “That was cited by more than 50 per cent of businesses. Then there are things like debt costs because their interest rates are going up. If you’re a business that has loans in order to get your business started or maybe you did some renovations or something and you needed to take out an additional loan, those costs are going up too. That inflation hits across all the things — not only the input costs of what they’re buying but also the cost to pay their debts and their interest on their debt.”

She says labour challenges also continue to pressure businesses.

“Recruiting and retaining employees is really hard. Finding the people that fit what you’re looking for, and then keeping them is a real challenge,” she said. “Supply chains continue to be a problem. They’re certainly improving but continue to be challenging.”

Then there’s the growth outlook. She says because of the rising interest rates and rising costs, there’s been a “fair bit of chatter” from economists about whether we are going into a recession or how big of a recession it could be.

“That has tempered the optimism that businesses have felt about how this year going to be in their opportunity to grow and be successful because again, inflation and a recession impact everybody,” she said pointing out that customers might actually reduce what they’re buying and make choices to pay rising mortgage rates instead of buying furniture or stepping out for dinner.

“That hampers the optimism of business owners because they’re not quite sure how their customers are going to react,” she said.

As businesses struggled through the COVID-19 pandemic, many are still trying to catch up to their pre-COVID revenue and have had to resort to debt to keep their doors open.

“There’s definitely a lot of that pressure being felt,” Robinson pointed out. “There’s this uncertainty around how much should they keep investing or how should they temper by reducing staff or hours. If they can’t get supplies, or the price of the supplies has gone up, then the pricing that they have to charge becomes a barrier to those customers. There’s a lot of uncertainty right now and businesses are definitely feeling the pressure.”

Robinson says these are some of the key issues that they are seeing and are reflected in the report and it will certainly be a “bit of a challenging year” as people continue to work through these problems.

Sandi Krasowski, Local Journalism Initiative Reporter, The Chronicle-Journal