A large proportion of Quebec small businesses (SME) still say they have to raise their prices to fight inflation, according to a new study by the Canadian Federation of Independent Business (CFIB).
The survey, published Monday, compares results from January with those from the same period in 2022.
It reports that nearly two-thirds of executives surveyed last month say they are experiencing significant impacts from inflation, up four points from a year earlier.
To cope with the inflationary environment, 73 per cent said they would have to raise prices, a similar proportion to 2022.
However, the survey shows that more Quebec small businesses are now using other measures to cope with inflation than last year.
For example, owners say they will have to work longer hours to reduce labor costs (59 per cent in 2023, compared to 52 per cent in 2022), or temporarily reduce profit margins to remain competitive (43 per cent in 2023, 38 per cent in 2022).
These measures are more likely to be adopted by companies with fewer than five employees, the CFIB study says. These SMEs are also less likely to raise their prices.
Also, according to the study, about a third of executives said they would have to reduce their investments and growth forecasts, compared to 29 per cent in 2022.
“Our data is clear: the situation is worse than last year. It’s true that the peak of inflation seems to be behind us, but current levels are much higher than what we’ve seen,” said CFIB’s Quebec vice-president, François Vincent , in a statement.
He is concerned that SMEs will be weakened by rising costs.
CFIB is also calling on Quebec to support small businesses by limiting government cost increases and reducing taxation. According to the survey, some rising government costs are having a significant impact (44 for small businesses.
This report by The Canadian Press was first published in French on Feb. 13, 2023.