Small business confidence is undergoing a shaky recovery following the blow it took earlier this year, when unpredictable U.S. tariffs shocked many businesses.
In March, small business confidence in B.C. reached its lowest point in 25 years, as measured by the Monthly Business Barometer from the Canadian Federation of Independent Business (CFIB). That’s lower than levels seen after 9/11, the 2008 financial crisis, or the COVID-19 pandemic. But this pessimism speaks to more than just trade troubles—it reveals homegrown challenges that have been holding back entrepreneurs for years.
Small businesses still face uncertainty as President Donald Trump’s mercurial trade policies shift the ground under their feet. According to CFIB’s survey of small business owners, more than a third of B.C. businesses report a decrease in overall revenue since the start of the trade war. Forty-one per cent report reduced profits.
Thankfully, Canada has seen a slight recovery in business confidence since March. But unlike other provinces, B.C.’s business climate has proven volatile. Business Barometer data for July revealed that B.C.’s long-term confidence declined more than five points while the rest of the country saw an increase, the only major province to do so.
In B.C., nearly three-quarters of small firms cite tax and regulatory costs as a major challenge. Over half point to weak demand as their top barrier to growth. Net hiring intentions in B.C. are also declining with more businesses planning to reduce full-time staffing plans than increase them.
Summer is normally the high season for many small businesses, when sunny streets and summer tourism drive traffic to local storefronts and help them pay their bills for the year. It is concerning to see below-average confidence during this make-or-break season.
To address this crisis of confidence, businesses need timely government action. Premier David Eby has recently shuffled his cabinet with the intention to build “a more resilient economy that’s less reliant on the United States.” While it may be tempting to blame all B.C.’s woes on trade turmoil, this new cabinet must recognize that the problems plaguing small businesses today have not emerged overnight. Instead, the trade war has only exposed and deepened cracks in our economic foundation.
Last September, well before the onset of the trade war, CFIB asked B.C. business owners whether they’d recommend someone start a business in the province. Sixty-two per cent said no—more than any other province. They blamed red tape, taxes, and the high cost of doing business.
To better understand the data, I spent a day going door to door with a local CFIB district manager to hear from business owners about their challenges. I can confidently say that the stories I heard back up what is found in CFIB’s Business Barometer.
Business owners told me they are exasperated by the cost of the B.C. government’s five paid sick days, which small businesses must cover in full—making B.C.’s policy the most expensive in Canada.
I heard calls to rebate WorkSafeBC’s $2 billion surplus back to businesses so they can invest and grow. I was also told about WorkSafeBC’s troubling new practice of taxing all “verifiable” tips as part of employer payroll. Seventy-six per cent of businesses with tipping say this will impact them negatively, according to a CFIB survey. It’s not just about the cost—it’s about the time, paperwork, and uncertainty that distract from serving customers and growing the business.
A third concern was public safety, with several businesses describing recent incidents that have impacted their operations and sense of security. These businesses would not only benefit from help upgrading their security systems and repairing vandalism, but government efforts to address the root causes of street disorder.
The challenges shared with me underscore how small businesses’ confidence in B.C. is hampered on multiple fronts. It will require using a small business lens at every level of government to improve it.
That means tackling the combination of taxes, red tape, and high costs that have become all too familiar to small business owners. It also means providing long-term clarity and stability, so entrepreneurs can plan, invest and hire with confidence.
If British Columbia wants to see business confidence return to its historic highs, it’s time to address the root causes of our economic headwinds, not just the symptoms.
Ryan Mitton is the B.C. director of legislative affairs for the Canadian Federation of Independent Business.
