A new study by the Canadian Federation of Independent Business (CFIB) has found that small business owners in Canada are working an average of 54 hours per week, equivalent to an eight-day workweek, due to staffing challenges. The report highlights the severity of the labor shortage and its impact on small businesses across the country.
The Problem is Getting Worse
According to the study, which was based on a survey of CFIB members in September last year, 59% of Canada’s small and medium-sized businesses are affected by labor shortages. This number has increased from 55% in November 2021, indicating that the problem is getting worse.
Western Canada Affected the Most
The study found that the labor shortage is particularly prevalent in Western Canada, where 76% of small business owners in Alberta affected by labor shortages are working more hours as a result. Manitoba and British Columbia also have high numbers of affected businesses, with 75% each.
Sectors Most Affected
The hospitality sector was found to be the most affected, with 84% of business owners working more hours due to staff shortages. The agriculture sector is close behind, with 82% of business owners reporting the same issue.
Consequences for Business Owners
CFIB economist Laure-Anna Bomal, a co-author of the report, said that small business owners are being forced to work long hours to compensate for staff shortages. "They have to turn down sales contracts, decrease service offerings," she explained. "They are diverted from developing and implementing strategies to their business to improve, to grow their business."
Potential Solutions
Bomal suggested several potential solutions to the labor shortage problem. These include increasing the labor pool of workers by targeting older workers or simplifying immigration processes. She also recommended that policymakers look at reducing red tape or incentivizing productivity through tax credits.
Comparison to Average Employees
According to Statistics Canada’s September 2022 Labour Force Survey, Canadian full-time and part-time employees over 15 typically work 35.6 hours per week. This means that small business owners are working 50% more than the average employee, according to the report.
Conclusion
The study by CFIB highlights the severe impact of labor shortages on small businesses in Canada. With many business owners working an equivalent of an eight-day workweek due to staff shortages, it’s clear that something needs to be done to address this issue. The potential solutions proposed by Bomal offer a starting point for policymakers and business leaders to tackle the problem.
What Can Be Done?
- Increase the labor pool of workers
- Simplify immigration processes
- Reduce red tape
- Incentivize productivity through tax credits
Why is This an Issue?
- Small business owners are working long hours, which can lead to burnout and decreased productivity
- Business owners are being forced to turn down sales contracts or decrease service offerings
- The labor shortage is impacting the growth and development of small businesses
