BCBusiness

January/February 2022 – The Most Resilient Cities

With a mission to inform, empower, celebrate and advocate for British Columbia's current and aspiring business leaders, BCBusiness go behind the headlines and bring readers face to face with the key issues and people driving business in B.C.

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small business," says Wells Fargo's John Davis, whose firm typically provides loans and other services to companies with annual revenue north of $350 mil- lion. "And small businesses fell through the cracks a little bit here because they don't have the access to capital that big companies have." As interest rates rise and labour constraints con- tinue, those smaller outfits will face challenges in 2022, he predicts. Because the big Canadian banks have always had trouble figuring out that space, credit unions and other smaller financial institutions have tried to fill the gap, he says. But they want to move upmarket, too, because such loans don't yield much of a return. "I'm wondering if some of the fintechs or non-bank solutions might be the ultimate credit pro- viders and service providers to smaller businesses." 6. Labour pains continue, with a paradox "Without a doubt, the severe skilled labour shortage B.C. is experiencing is our biggest chal- lenge in the next year," the BC Chamber's Fiona Famulak says. "There are jobs out there but not enough people to fill them. This is already impacting businesses and communities both large and small. In addition, the increasing cost of doing business and supply chain challenges are adding to the issues that small and medium-sized businesses are trying to manage." On the labour front, Davis has watched forest products companies hold job fairs to find mill work- ers. "One of our biggest clients is a hotel operator," he says. "Getting people to do that kind of work is incred- ibly hard." Davis attributes some of the shortage to the Canada Emergency Response Benefit (CERB), which made it relatively easy for workers with low-paying jobs to stay home. "It's not just new people," he says of the labour shortage. "It's the people that have left and trying to get them to come back." At the same time, there's still plenty of slack in the labour market, says Ryan Berlin of Rennie Intel- ligence. Before COVID, Metro Vancouver was home to 70,000 people looking for work—a number that has since grown to 100,000. "So there's an excess of 30,000 people above what we had seen pre-pandemic who are wanting to work but can't." Given that surplus, you'd think employers would have their pick, Berlin says. But even with Canada's job vacancy rate at a record high, "they're struggling to connect the skills and people out there to the needs that they have." 7. A distorted employment picture Climbing out of what Peacock describes as a big hole, B.C. saw a 7-percent increase in jobs from January through October 2021, putting it ahead of the rest of the country. But distorting that picture is public sector employment growth, which spiked by about 16 percent, he notes. And remember, employment throughout the prov- ince fell significantly in 2019, Peacock says. "So we went into the pandemic at a lower level of employ- ment, which has made it much easier for B.C. to regain that pre-pandemic level of February 2020 that every- body's been focused on." Peacock sees reason for concern about relatively muted hiring conditions in the private sector. "When I look at some of the additional costs that are being heaped on employers, going back to the employer health tax and then all these costs associated with managing the pandemic, some difficulties and chal- lenges in hiring people and then sick-pay costs added on, one does wonder to what degree we'll see stron- ger private sector hiring activity over the next couple of years." JANUARY/FEBRUARY 2022 BCBUSINESS 51 SOURCES: STATISTICS CANADA, BC STATS, BUSINESS COUNCIL OF B.C. 2022 B U S I N E S S and E C O N O M I C "Access to capital when you're Jimmy Pattison is very different than if you're some small business. And small business fell through the cracks a little bit" –JOHN DAVIS, Wells Fargo "There's an excess of 30,000 people above what we had seen pre-pandemic who are wanting to work but can't" – RYAN BERLIN, Rennie Intelligence INFLATION NATION If these numbers pulled by the Business Council of B.C. are any sign, look for higher prices to stick around Transportation Shelter ALL ITEMS Food Recreation, education and reading Health and personal care Alcohol, tobacco and cannabis Household operations, furnishings and equipment Clothing and footwear Weight in CPI basket 0 2 4 6 8 10 12 YEAR-OVER-YEAR CHANGE TO OCTOBER 2021 15% 30% 100% 16% 10% 5% 5% 15% 4% CPI TARGET = 2% CANADA FACES BROAD-BASED CONSUMER PRICE INDEX PRESSURES

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