Photo: Photo by Elisa Ventur on Unsplash
It may not be a full-blown recession, but the economy in Metro Vancouver is definitely showing signs of stagnation, according to the Canadian Survey of Business Conditions (CSBC), a partnership between Statistics Canada and the Canadian Chamber of Commerce.
Businesses in Metro Vancouver are feeling the pressure of persistent inflation, rising operating costs, rising taxes and labor challenges.
“Consequently, business pessimism in Canada has reached its highest point in two years,” says the Greater Vancouver Board of Trade (GVBOT).
The inflation that economists, central bankers and politicians assured Canadians would be “transitory” has been going on for more than two and a half years.
The Bank of Canada tries to keep inflation at 2%. In April 2021, inflation reached 3.4 percent in Canada and peaked at 8.1 percent in June 2022. But despite the Central Bank's rate hike – one of the few mechanisms that can tame inflation – the inflation rate in Canada in October was still 3.1. Percent.
The CSBC survey found that 53 percent of respondents expect to see an increase in operating expenses in the future and 40 percent expect a decrease in profits.
“This data comes on the heels of the City of Vancouver's 2024 draft budget, which is expected to implement a 7.6 percent increase in property taxes, a 30 percent higher business license fee and several other adjustments, increasing the obstacles faced by small and medium-sized companies in our city, which are clearly already experiencing difficulties”, states the GVBOT statement.
“The data is clear: businesses are struggling with affordability considerations in similar ways as individuals, squeezing their finances and making it more difficult to maintain operations, raise wages or grow,” said GVBOT President Bridgitte Anderson.
A national housing crisis is increasing the pessimism that companies feel.
“The Business Data Lab also found a strong correlation between housing (un)affordability and business pessimism, which is highest in BC and Ontario,” notes the GVBOT release.
“It also highlights why many employers in BC are eager to see bold steps in housing policy result in more available and affordable housing for workers.”