News / Edmonton

Entrepreneurs feeling pinch from labour changes, despite survey showing surge in investment

Survey says Alberta entrepreneurs will increase investment into their businesses by about 12 per cent in 2018

Charles Rothman is the owner of Rooster Cafe. Despite a recent survey showing Alberta entrepreneurs plan to ramp up investment in 2018, Rothman said he's wary of sinking too much cash into his newly-opened business due to recent tax hikes and labour regulation changes.

Kevin Tuong / Edmonton Freelance

Charles Rothman is the owner of Rooster Cafe. Despite a recent survey showing Alberta entrepreneurs plan to ramp up investment in 2018, Rothman said he's wary of sinking too much cash into his newly-opened business due to recent tax hikes and labour regulation changes.

A new survey shows Alberta entrepreneurs plan to ramp up investment into their businesses this year, but some say recent labour changes means they’ll wait to make sure they can “walk before they run”.

A recent Business Development Bank of Canada report shows a drastic change in the outlook for Alberta business owners in 2018, who report a planned 12 per cent increase in spending over last year for a total average of $330,000 of investment.

Rooster Cafe & Kitchen owner Charles Rothman said he’s cautious about sinking too much money into his new Whyte Avenue business, which just opened last month.

With a higher carbon tax introduced on Jan. 1, a new statutory holiday policy requiring employers to pay employees whether they work that day or not, and an increase in the minimum wage scheduled for Oct. 1, Rothman said he's wary.

“The changes to Alberta labour laws affect the hospitality industry in particular, because people have a perception of what food should cost. We can’t just pass along higher costs to the customer,” Rothman said. 

“It would’ve been great to introduce these changes when the economy was strong, but it’s happening all at once in a tight environment.”

Rothman is in favour of some changes to the Employment Standards Code changes – such as a rule forbidding employers from deducting pay from their employees for cash shortages or loss of property, he said.

But he contends the change has been too much too soon for small businesses.

“And we’re not hearing a lot of conversation about a plan to help local business and offset some of these changes …. How will I offset costs at a time when the economy isn’t flourishing?” Rothman asks.

Janet Riopel, president and CEO of the Edmonton Chamber of Commerce, says businesses are still struggling in 2018. She points to high unemployment rates (57,000 in Edmonton today versus 52,000 last year) and high business-vacancy rates that, partnered with new government regulations, make this a fragile economy high on the mind of business owners.

“The number one obstacle in investing is confidence. While our entrepreneurs are an optimistic bunch, the recovery isn’t happening quickly. There’s a ‘We have to ride out the storm’ attitude,” Riopel said. 

“And with carbon and property taxes up ... there’s a huge burden on business. The unintended consequence of government decisions may be that businesses have to let people go, or offer fewer training opportunities.”

Even amidst current economic conditions, local entrepreneur Brian Flowers is proving the survey results true.

The owner of Table Top board game Café is expanding his second location on 124 St. with a glass-enclosed patio (thanks to help from an area revitalization grant). He's also planning to franchise his business across the country.

“We took a hit with minimum wage increases—costs went up 13 per cent across the board. But we’re lucky with this business model,” Flowers said. "We tap into nostalgia, and people’s hunger to connect and look up from their phones. The board game industry is booming.”

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