Many Alberta small-business owners, who have been struggling through a prolonged economic downturn, are hoping the next provincial government will bring relief through business-friendly policies.
The Alberta election is April 16 and polls suggest that Rachel Notley’s ruling New Democrats will be replaced with Jason Kenney’s United Conservatives, which have campaigned to scrap the carbon tax and loosen some labour rules that have driven up business costs.
Over the past two years, small-business confidence in Alberta has reached the lowest levels ever recorded in the country, according to the Canadian Federation of Independent Business, which has been tracking the measure for about 20 years.
“Business owners have been through a lot and are feeling very pessimistic about the future,” says Richard Truscott, CFIB’s vice-president for Alberta and British Columbia.
“Whatever party wins, they’ll need to do a much better job of creating meaningful ways to support small business and kickstart the economy.”
Perry Batke, the general manager and a shareholder of two hotels in Leduc, Alta., about 30 kilometres south of Edmonton, has been in the industry for 25 years and describes the past two or three years as “the most difficult and challenging that I’ve ever experienced.” He cites the combination of “dramatically higher costs” from the NDP’s policies and “severe drop in business” as a result of depressed energy prices.
Business at Mr. Batke’s two hotels, the Best Western Premier Denham Inn and Suites and Best Western Plus Edmonton Airport Hotel -- which together employ about 150 people -- has fallen by about a third over the past three years. Meantime, costs from NDP policies such as the minimum wage hike, changes to holiday pay rules and the carbon tax, have led to an additional $200,000 in expenses at each hotel.
“We need a pro-business focus,” he said.
Since the NDP took power in May, 2015, Alberta’s minimum wage rose steadily from $10.20 an hour to $15 an hour as of October. People serving liquor saw their wages go from $9.20 to $15 over the same period. New holiday pay rules require businesses to pay employees on statutory holidays regardless of how long they’ve worked at the company, and even when it’s not their regular workday. The government also raised the carbon tax to $30 a tonne in 2018, up from $20 a tonne, which has led to higher fuel costs.
The government reduced the small-business corporate income tax rate to 2 per cent from 3 per cent in 2017 to help businesses adjust to the carbon levy, but many say it’s not enough, particularly given the province’s continuing economic downturn.
Mr. Batke says he plans to vote for the UCP based on promises to stimulate the economy. Mr. Kenney’s party has vowed to replace the carbon tax and reverse the holiday pay rules. He also plans to bring in a new hourly minimum wage of $13 for workers 17 years old and younger and would look at lowering the wage for alcohol servers, similar to rules in provinces such as Ontario and British Columbia.
Trevor Johnson, president and founder of Calgary-based BullsEye Recruitment Inc., says he’s eager to vote for the UCP based on its business-friendly platform, which he hopes will spur hiring activity in the province and, in turn, business for his company.
“We need to get business back to a growth mindset,” he says.
Gil McGowan, president of the Alberta Federation of Labour, which is backing the NDP in the election, believes small-business owners concerned about the higher costs associated with the NDP need to also consider the economic impact of the UCP’s policies. He argues that rolling back wage increases and making cuts to the public sector will lead to a reduction in consumer spending which, in turn, is bad for business.
“I’m afraid that small businesses are too focused on their costs, which frankly haven’t risen that much under the New Democrats, [and] are ignoring the revenue side of the ledger, which is income coming in from their customers,” Mr. McGowan says.
He also believes some of the cost increases are “greatly exaggerated.” For example, Mr. McGowan says many workers in the province were already making more than the minimum wage before it was increased.
Justin Leboe, a chef and partner at two Calgary restaurants who employs about 75 people, says he’s not sure who to vote for in the election. While the costs at his two restaurants, Model Milk and Pigeonhole, have risen in recent years, he’s not confident UCP will follow through with its promises to ease some of the financial burdens on businesses.
“The business person in me would be lying to you if I said it wasn’t attractive if [the UCP] do rollback some of those policies, but I don’t know that I would hold my breath,” Mr. Leboe says. “Anyone who holds that office for the next four years should be focused on jump-starting the economy.”
The Globe and Mail Small Business Summit will give you practical ideas to grow your business. This year’s speakers include former Dragon’s Den star David Chilton, Kate Ross Leblanc from Saje Natural Wellness and celebrity chef Mark McEwan. More information at tgam.ca/sbs19.