Over 260,000 Canadian small businesses severely impacted by construction in recent years: CFIB
A report by the Canadian Federation of Independent Business (CFIB) called Hard hats and hard times: Public construction impacts on small businesses has revealed that almost seven in ten (68 per cent) small businesses have experienced disruptions due to local construction projects in the past five years, marking a 27 per cent increase since 2018.
Out of those affected, a total of 22 per cent report these disruptions have had a major impact on their business, which is equivalent to 266,953 SMEs across Canada.
The report noted that when public construction projects are extended beyond their timelines, it prolongs the impact of the disruptions.
Small firms, on average, experienced 508 days of construction-related disruptions over the past five years.
“Small businesses face a myriad of issues when local construction projects take place, from traffic congestion and dust and debris, to losing customers and navigating logistical disruptions,” said Emily Boston, senior policy analyst at CFIB and report co-author. “Now, imagine dealing with it for over 500 days! Sadly, this is a reality for too many small businesses across Canada.”
The report also noted that small firms lost on average 22 per cent of their revenues during the most significant construction project which affected them over the past five years. Additionally, they spent roughly $10,000 in extra expenses including cleaning and repairs.
The most common issues affecting 58 per cent of businesses are traffic congestion, dust, debris, and noise. Customers and staff having trouble accessing their business or finding parking, significant stress and lack of notice also impact small businesses in construction zones.
“We’re not asking governments to stop upgrading roads or repairing sewers. Public infrastructure projects are important, but when they drag on for years, it’s difficult for businesses to survive in the meantime,” said Boston. “A large portion of construction costs can be avoided with better planning, execution, and by giving more consideration to the reality of local businesses.”
More than two-thirds of businesses (68 per cent) say they should be compensated by government when a public construction project has a major impact on their business operations.
As a result, CFIB urges governments to support small businesses during periods of major construction by establishing construction mitigation plans. These should include funding to offset costs for impacted businesses, improved planning and communication strategies, and additional clarification on how each level of government will be involved.
“All too often it seems as though levels of government punt the responsibilities of construction projects back and forth. There needs to be a clear directive as to who is responsible for the construction mitigation of projects and what mitigation tools will be used,” said Boston. “Improving how construction projects are handled would benefit local businesses, municipalities, provincial governments and citizens alike.”