NOTE: The province of B.C. has once again declared a week in February as Chamber of Commerce Week. This year, it runs Feb. 12 to 16, and the Langley Advance Times worked with the Greater Langley Chamber of Commerce to put together a series of stories to inform people in Langley about the local business organization and what it does to bolster and advocate for companies in this community.
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The rising costs of doing business are felt differently by small, local firms in Langley versus big companies with national or international reach, says Sherrin Western, a director of the Greater Langley Chamber of Commerce.
The owner of a local graphic design and marketing firm, she’s been reluctant to charge her customers more.
“We haven’t raised our rates in 10 years,” Western said.
That’s despite shocks like the COVID-19 pandemic, the supply chain logjams, increases in interest rates, and higher inflation that have all taken place in the last four years.
When you run a small business and know your customers, it’s not as simply as a major corporation raising prices, said Western.
“It’s like you’re asking your friend to pay more,” she said.
That’s one of the struggles facing local businesses, small, medium, and large as the cost of doing business has gone up significantly in recent years.
Inflation in Canada peaked at a rate of 8.1 per cent in June 2022, and the annual rate that year was 6.32 per cent overall. While it’s fallen considerably since then, easing pressure on both consumers and businesses, it remained at around 3.5 per cent as of the end of 2023, above the two per cent the Bank of Canada targets.
To bring down inflation, the Bank of Canada raised interest rates, with its key policy rate now at five per cent, the highest it’s been in two decades.
Unemployment remains low in B.C., at 5.6 per cent – rising, but still below historical averages. While that’s good for workers, it also means that the supply of workers remains scarce, and employers may have to compete on wages to get the staff they need.
Western said that the latest survey by the Canadian Chamber of Commerce on business sentiment asked about the top challenges facing businesses. They were labour costs, taxes, input costs, and interest and debt costs.
Many businesses got through the pandemic with loans and other aid from the government.
But now on the far side of the lockdowns, in addition to the other rising costs, employers are having to deal with a new stat holiday, increases in the minimum wage – which is also tied to inflation – and the addition of a minimum of five sick days for workers.
“One of these things would be quite normal,” she said, and could have been absorbed by businesses.
But the timing of having them all happen in quick succession was disastrous.
The changes come after years of low interest rates that go back to the years of the Great Recession in 2008.
“I never used to pay attention when the Bank of Canada interest rates were talked about,” Western said.
Now she’s alert to any changes.
Many businesses rely on lines of credit to keep operating. Money from customers may not come in all at once, so credit is required to keep the lights on and pay staff week to week. With interest rates so much higher, that credit now comes with a greater cost.
One big thing driving all of these increases is the basic cost of living for so many people, Western said.
“People are painfully aware of how much they are making right now, because we are in such an expensive market to live in,” she said.
The Greater Langley Chamber of Commerce has lobbied for a number of changes to try to ease the pressure on local businesses.
Those include keeping municipal property tax rates as low as possible in Langley City and Township, and for more exemptions for the Employer Health Tax. The tax only kicks in for employers who have a total payroll of $500,000 or more, which means it mostly hits large and medium-sized businesses.
While the chamber represents businesses of all sizes, most of its members are small businesses, and they’re the ones with less room to absorb the various shocks, said Western.
“The impacts are grave on a small business,” she noted.
One of the best things governments could do, if possible, would be for the three levels of government – municipal, provincial, and federal – to coordinate their policy changes to that businesses weren’t hit by multiple cost increases all at once.
“Timing is the critical part,” said Western.