When the economy collapsed in 2008, Kimberley DeLeeuw remembers collecting bottles and cans in order to buy groceries for her family, a searing lesson that has ensured the small business she runs with her husband is better prepared for the current downturn.
"I don't know if we've ever been so scared, financially, in our lives," she said of 2008. "I never want to do that again."
Ms. DeLeeuw is the co-owner of Cornerstone Transport Ltd., a trucking company based in Carrot Creek, Alta., more than 90 minutes west of Edmonton. The company has been struggling with slumping profit in the transportation industry in Western Canada since January, a result of declining oil and gas prices.
The Canadian economy declined for the fifth consecutive month in May, according to a recent announcement by Statistic Canada, and while economists and politicians debate the correct terminology for the current economic state, many small businesses say they are already feeling its effects.
But after the economic meltdown in 2008, Ms. DeLeeuw said she and her husband have been vigilant in managing the company's debt load and now keep an emergency savings fund that has helped them to keep the business running as oil prices continue to plummet.
Ms. Deleeuw said her company is operating at about 25-per-cent capacity. The slowdown is now felt by small businesses in most Albertan communities, she noted.
"Everything is coming to a grinding halt."
The current economic situation is in sharp contrast with the boom experienced by Cornerstone Transport before the start of the new year.
"We could not hire enough people; we could not have enough trucks and equipment," said Ms. DeLeeuw, who started the small business with her husband, Don, in 2001. "We just have a few rigs now, compared to before Christmas."
Though many small businesses in Canada remain unaffected, the recent economic downturn is hitting certain provinces and industries particularly hard, and economists fear that there could be spillover into other areas the economy.
"Certainly the impacts start at a very regional and sectoral level, but as the impacts cycle through the economy, they create their own impacts, and those impacts have other impacts," said Ted Mallett, the vice-president and chief economist for the Canadian Federation of Independent Business.
Mr. Mallett suggests that it is too early to tell which direction the economy will go from here, but is quick to point out that business confidence is nowhere near as low as it was during the economic downturns of 2008 and 1990.
The CFIB's Business Barometer, which measures business confidence on a 100-point scale, dropped to a score of 58.2 during the month of July – the lowest rating since mid-2009, yet is not nearly as pessimistic as during the most recent recession.
"Compare that with 2008-2009: The lowest number we got was 39 on the index, so that was still 20 points below where we are now," Mr. Mallett said.
Michael Burt, the director of industrial economic trends for the Conference Board of Canada, said if what Canada is experiencing is a recession, it's a mild one.
He noted innovative small businesses in Canada can even find new opportunities during times of economic turbulence. For example, expensive equipment is often available at wholesale prices when the economy is slumping, and struggling corporations who are forced to exit the market leave more room for small businesses to fill the void.
Small-business owners are at a greater risk of getting caught up in day-to-day operations, Mr. Mallett said, but "uncertain times heighten the awareness of the need to do these kinds of things … these are all strategic decisions that any business should be doing at any time, whether times are good or times or bad."
With some careful planning and attention to a host of scenarios – "how would you deal with the nightmare scenario of losing a major customer? What are your contingency plans?" – Mr. Mallett said some small businesses may find they can weather the financial turbulence by coming out on top.
"Even though the pie might have shrunk, if that means certain players are exiting the market, then the ones that remain there should be able to benefit and grab a bigger piece of the pie," he said.
Special to The Globe and Mail