Alberta's small, medium-sized businesses to slash spending: survey

CALGARY -- A new survey shows small and medium-sized businesses in Alberta will slash spending more than expected this year as the oil downturn hits every level of the province's economy.

See Full Article

The government-owned Business Development Bank of Canada says smaller businesses in the province plan to invest about $11 billion this year, 27 per cent less than last year.

That compares with a 14 per cent increase in planned spending in British Columbia, and either flat or modest growth in spending across the rest of Canada.

BDC chief economist Pierre Cleroux says he expected spending to go down in Alberta, but was "surprised by the magnitude of the drop."

The BDC survey heard from roughly 4,000 executives of companies across Canada with between one and 499 employees.

Cleroux said this year will be worse than last year as the reality of low oil prices fully sinks in, with 66 per cent of survey respondents in Alberta saying a lack of confidence in the economy was their main barrier to investing.

"Last year was the first year (of the downturn in oil prices) and a lot of people thought that the oil price would come back quickly," Cleroux said. "I think people are getting used to this new reality."

RefineCo Inc., a business-focused tech firm in Calgary, is one of the many companies being more careful about spending, says company CEO Eric Veenendaal.

"On the capital side, I would say we are certainly being cautious," Veenendaal said. "As a professional IT services company, we are largely at the will of what clients are doing in terms of their own capital spending."

That spending in the oil and gas sector has dropped considerably, forcing RefineCo to look elsewhere for contracts in sectors such as agriculture and the government.

Two years ago, RefineCo relied on oil and gas for 60 to 70 per cent of its work but now it's less than 10 per cent, and Veenendaal isn't betting on any short-term bounce in oil.

"Our plans extending out three years down the road basically don't account for any kind of a spike," Veenendaal said.

The Village Brewery in Calgary is growing well, but co-founder Jim Button says it's still feeling the headwinds of the downturn.

"You used to be able to say beer is recession-proof, but I think "recession-resistant" is the word they've come up with in the last bunch of years," Button said.

The restaurants he supplies have seen overall sales drop by 20 to 30 per cent, cutting into Button's own sales growth. That's been partially offset by people drinking more at home, boosting retail sales, he said.

The company is still going ahead with about $750,000 in capital investments this year to boost efficiencies and quality, but that's down from earlier plans. The company also won't be able to do as much with that money because the equipment it needs is priced in U.S. dollars, and there are no plans to hire more staff, said Button.



Advertisements

Latest Economic News

  • Company sold turf product after learning of defects: report

    Economic CTV News
    WOODBRIDGE, N.J. -- The country's leading maker of artificial sports turf sold more than 1,000 fields to towns, schools and teams nationwide after its executives knew they were falling apart faster than expected and might not live up to lofty marketing claims, according to an investigation by a news organization. Source
  • Montreal-based company sold turf product after learning of defects: report

    Economic CTV News
    WOODBRIDGE, N.J. -- The country's leading maker of artificial sports turf sold more than 1,000 fields to towns, schools and teams nationwide after its executives knew they were falling apart faster than expected and might not live up to lofty marketing claims, according to an investigation by a news organization. Source
  • U.S., China, EU, others fail to reach environmental goods deal

    Economic CTV News
    GENEVA -- Forty-six countries including the U.S., China and European Union nations failed Sunday to agree on a list of "environmental goods" like solar-powered air conditioners or LED light bulbs that could be targeted for lower tariffs. Source
  • Venezuela to issue new bills with current ones worth no more than 2 U.S. cents

    Economic CTV News
    BOGOTA -- Venezuela said it will issue higher-denominated bills as triple-digit inflation and a currency meltdown leave the country's largest note worth just around 2 U.S. cents on the black market. The central bank said in a statement Saturday that six new bills ranging from 500 to 20,000 Bolivars will begin circulating on Dec. Source
  • Six things to know about the bovine TB outbreak: CFIA's chief veterinary officer

    Economic CTV News
    OTTAWA -- More than 22,000 cattle at farms in Alberta and Saskatchewan are quarantined due to bovine tuberculosis, causing hardship for ranchers and millions in compensation payments and other costs. The Canadian Food Inspection Agency is testing cattle to determine the extent of the outbreak and the source of the contagious bacterial infection. Source
  • U.K.'s Boris Johnson downplays EU payment suggestions

    Economic CTV News
    LONDON -- Britain's foreign secretary has dismissed suggestions that London would be willing to pay into European Union coffers following an exit from the bloc, describing the idea as speculation. Boris Johnson's comments to the BBC on Sunday came after Britain's minister for leaving the European Union, David Davis, said that the country might be willing to pay in return for access to the single market. Source
  • Beyond the hippie stereotype: A closer look at the opposition to Trans Mountain

    Economic CBC News
    A conversation about tripling your money on a tech start up might seem out of place at an anti-pipeline march, but not so in Vancouver. When thousands of protestors made their way from City Hall to downtown a few weeks ago, chatter about stock options and where to go for ramen after the rally could be heard alongside the traditional indigenous drumming and chants of "Hey, hey, Trudeau, Kinder Morgan's got to go". Source
  • Using Air Miles for overseas flights? It may not be a great deal

    Economic CBC News
    You've saved your Air Miles for a well-deserved overseas adventure — but don't pack your bags just yet, as you may be in for a surprise. Seventeen million Canadians collect Air Miles reward points on everything from groceries to gas. Source
  • Airbnb drops lawsuit against NYC over new state law

    Economic CTV News
    NEW YORK -- Airbnb has agreed to drop a lawsuit against New York City over a new state law it said could have deterred hosts and impaired its revenues. The settlement was reached Friday. Source
  • France pledges $30 million for wartime heritage protection

    Economic CTV News
    ABU DHABI, United Arab Emirates -- France committed $30 million toward protecting cultural heritage sites during wartime on Saturday, a first step in the creation of an international fund aimed at preventing destruction like that carried out by Islamic State militants. Source