A survey of businesses in Metro Vancouver found that nearly half expect their operating costs to increase in the coming months, and the majority expect those costs to be passed on to consumers.
The Canadian Business Conditions Survey found that 48% of businesses in Metro Vancouver expect their costs to rise over the next three months.
Of the businesses surveyed, 65% said they expected to pass on any cost increases to consumers – 37% said they were “very likely” to do so and 28% said they were ” quite probable”.
“We’re seeing higher inflation, higher costs across the board,” said Bridgitte Anderson of the Greater Vancouver Board of Trade. His organization reviewed data from Metro Vancouver taken from the survey’s pan-Canadian questionnaire.
“They’re also feeling the impact of rising costs, and in many cases they have no choice but to pass those costs on to customers and customers.”
“We expect further increases”
The board of directors, in a statement, said the survey found that the top concerns for businesses in Metro Vancouver were inflation, more expensive inputs, rising interest rates, expensive real estate and the rising costs of recruiting qualified employees.
Judy Reeves, the owner of Edge catering in Vancouver, says she already sees it.
Although she says her business is doing well, global forces such as the pandemic, inflation, climate change and the war in Ukraine have driven up the costs of her business’ main input: food.
“We’ve seen it before, and we expect more increases,” Reeves said, adding that his cost increase is regrettable but necessary.
“We have to be on top or we’re not as profitable, and in this type of business our profit margins are very, very thin.”
Andrey Pavlov, professor of finance at Simon Fraser University’s Beedie School of Business, says governments should act to support businesses more.
He says that while governments have spent heavily during the pandemic to keep businesses afloat, underlying issues remain.
“We haven’t made running a business in Canada or British Columbia any easier,” Pavlov said. “No regulations have been reduced, no bureaucracy has been removed, no taxes have been reduced.”
Province says it is taking action
British Columbia’s Minister of Jobs, Economic Development and Innovation, Brenda Bailey, however, highlighted the government’s actions in an emailed statement – a BC Hydro credit for commercial customers, a small business property tax flexibility for municipalities, a cap on food delivery fees and increased access to small business tax rates.
She also said expanding childcare services and new training opportunities will help more people enter the workforce.
“As a businessman myself, I have a deep understanding of the challenges businesses face,” Bailey said.
“Labour shortages and rising costs for individuals and businesses are top concerns for our government as global inflation makes life more expensive around the world and here in British Columbia.
The Canadian Business Conditions Survey was conducted online by Statistics Canada in partnership with the Canadian Chamber of Commerce between October 3 and November 7, 2022 among 756 employers in Metro Vancouver.
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