Labour shortages cost Ontario small businesses over $16B in lost revenue
No other province or territory comes close to this figure
Toronto, November 29, 2023 – Small businesses in Ontario missed over $16 billion in revenue opportunities last year because they had to turn down contracts or sales due to labour shortages, finds a new report by the Canadian Federation of Independent Business (CFIB). Ontario topped all provinces and territories in this category, with Quebec placing a distant second at over $8 billion.
“Labour shortages have been an ongoing challenge for Ontario small businesses for several years. When the pandemic hit, these challenges became magnified,” said Julie Kwiecinski, CFIB’s Ontario director of provincial affairs. “While labour shortages are now on the decline, they’re still a major obstacle for many Ontario small businesses. It was important for us to put a price tag on them to define their impact and explain why recovery for many small firms can’t be expected to happen more quickly.”
“We always knew labour shortages came at a high price to small businesses. Staffing challenges cause employers to work more hours, reduce their hours of operation, and decline services and contracts, simply because they can’t find enough staff to fully operate their business,” said Laure-Anna Bomal, CFIB’s economist and the report’s author.
Due to labour shortages last year, Ontario small businesses turned down sales or contracts (25%); postponed the timing of existing contracts (18%); and cancelled or deferred business investment/expansion plans (20%). In addition, business owners (51%) and employees (37%) worked more hours to make up for the shortages.
According to the report, the Canadian construction sector was hit the hardest of all sectors by a lack of employees, losing business opportunities last year valued at over $9.6 billion.
“The significant loss of revenue opportunities across many sectors due to labour shortages is another reason why the federal government needs to extend the CEBA loan’s forgivable deadline beyond January 18,” said Kwiecinski. “Only 34% of Ontario small businesses can pay off their CEBA loan in time to keep the loan’s forgivable portion of up to $20,000.”
For media inquiries or interviews, please contact:
Dariya Baiguzhiyeva, CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small- and medium-sized businesses with 97,000 members across every industry and region, including 38,000 in Ontario. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.