Mario ToneguzziThe Alberta economy may be on the road to a slow recovery but business owners in the province still aren’t convinced.

Small business confidence in Alberta is the worst in Canada, according to the latest Business Barometer index released on Thursday by the Canadian Federation of Independent Business.

“Small business owners are responding to the economic uncertainty nationally with pipeline delays and provincially with further public policy changes on the horizon,” said Amber Ruddy, director of provincial affairs in Alberta for the CFIB. “Business confidence in Alberta is still well below the range of healthy economic growth. With new costs lingering, such as the increase in the minimum wage to $15 effective Oct. 1, there is a huge need for policies that help, not hinder, small businesses.”

The CFIB said the monthly confidence index for the province rose by 0.9 points to 54.8, which is 6.6 points below the national average (61.4).

CFIB says the barometer is measured on a scale of zero to 100. An index level between 65 and 75 normally indicates that the economy is growing at its potential and a majority of owners expect their business performance to be stronger in the next year.

The other provincial numbers were: Quebec (74.5), Prince Edward Island (74.1), Nova Scotia (63.1), Ontario (61.2), Manitoba (61.1), New Brunswick (58.0), Saskatchewan (58.5), Newfoundland and Labrador (56.3), and British Columbia (55.9).

The report said Alberta’s employment picture has weakened with 18 per cent of business owners saying they are planning to cut back on staff (up five points from August), while nine per cent are adding personnel (down four points from the previous month).

“The state-of-business health indicator is muted in September, 24 per cent describe their firms as being in good health, and 22 per cent describe their firm as being in bad shape. Unchanged from last month,” said the report.

Omar Abdelrahman, an economist with TD Economics, said tight labour markets continue to be a constraint to small businesses in Canada, with the shortage of skilled and semi or unskilled labour still being reported as factors limiting firms’ ability to increase production.

“These are expected to stabilize going forward as some wage pressures are passed through price increases. A recent decision to halt scheduled minimum wage hikes in Ontario may somewhat contribute to this stabilization,” he said.

“Sustained increases in oil prices may bring up confidence among provinces that have yet to fully recover to pre-oil-shock levels. This point is corroborated by the recent increase in confidence within the natural resources sector. Risks around trade uncertainty and rising input costs, however, will continue to be a concern.”

Mario Toneguzzi is a veteran Calgary-based journalist who worked for 35 years for the Calgary Herald, including 12 years as a senior business writer.


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