Small Business Negatively Affected by Rail Blockade

Business  Affected by Rail Blockade

WINNIPEG - Nearly a quarter of businesses say they have already been negatively affected by the ongoing rail blockades, while another 48 per cent expect they will feel the impacts soon, according to preliminary data from a new survey by the Canadian Federation of Independent Business (CFIB). Affected businesses report they have lost an average of $60,000 since the start of the blockades.

“The continued disruption of rail service is quickly becoming a crisis for small businesses,” said CFIB president Dan Kelly. “Many business owners across the country are telling us they have already had to suspend operations, lay off staff or ration supplies. Many are in danger of losing important contracts to other international competitors and they worry about how this will hurt their reputation with clients going forward. While there are no easy answers to this complex issue, the risks of inaction are significant too.”

Many small businesses depend on rail service to receive supplies and get their products to market. They typically have limited resources and cash reserves to weather a prolonged service interruption. In fact, 62 per cent say they are very worried about the impacts of the blockades on their business. Nine in 10 business owners say that the federal government should make it a priority to work with the provinces and law enforcement agencies to ensure rail service is resumed.

“This situation could have consequences for small businesses and Canada’s economy as a whole that extend well beyond the blockades,” added Laura Jones, CFIB’s executive vice-president. “In addition to being concerned about their own reputation, 90 per cent of business owners are telling us they worry about how the blockades will affect investor confidence in Canada.”

Small businesses in the four western provinces were affected the most, followed by those in Nova Scotia and New Brunswick. In terms of sectors, agriculture has been hardest hit, followed by wholesale, natural resources, transportation and manufacturing. But all sectors and all provinces report significant negative impacts, including 23 per cent of retailers affected by the blockade.

The survey was sent to business owners on February 21 and is still open. CFIB received 6,802 responses and over a thousand examples of how the blockades are hurting individual businesses:

A business owner who depends on importing and exporting goods has lost over $80,000 and had to lay off all staff as overseas shipping rates have tripled in price.

A sign producer for retailers has missed deadlines and dealt with frustrated customers who have had to open their stores without a sign.

An Alberta company is waiting for $750,000 in equipment from Germany, stalling their operation.

A business reports that shipments of vital medical equipment for patients have been stopped.

Agriculture businesses are unable to get their product to market, get paid, clear space in grain elevators for new product and receive fertilizer for this year’s planting.

A new car dealer in St. John’s, NL has his needed inventory stuck on the rails before it can be put on a ship in Halifax.

A restaurant renovation has been stalled as needed construction materials to finish the job are not moving.

“Ultimately, Canada needs a clear path forward to balance economic development, environmental policy and Indigenous land rights to avoid repeating this situation and restore investor confidence,” concluded Kelly.

CFIB will continue to monitor the situation and will conduct additional surveys with small business owners if the blockades are not resolved by the end of the week.

TOPICS:   Manitoba News

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