To cope with inflation, a large majority of Quebec SMEs (73%) believe they need to raise prices even more.
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This is shown by a new study by the Canadian Federation of Independent Business (CFIB), which compared data collected in January 2023 with that of the same period last year.
Numbers released on Monday show that inflationary pressures on companies are not easing, on the contrary.
“It is true that the peak of inflation appears to be behind us, but current levels are well above what we have seen. In addition, these ongoing cost pressures are weakening our SMEs, which are still weak from two years of the pandemic and constrained by labor shortages,” said François Vincent, Vice President for Quebec at CFIB.
To counteract inflation, 73% of small business owners said they will need to increase their prices in 2023, a similar proportion to last year.
Just over half (59%) plan to work longer to reduce labor costs (up from 52% in 2022).
Also, 43% of SMEs intend to temporarily reduce profit margin to remain competitive (38% in 2022) and 32% will reduce their investments and growth forecasts (29% in 2022).
According to the report, increasing certain costs by the Quebec government (CPP/QPP contributions, paid sick leave, taxes, minimum wage, etc.) are among the challenges faced by 48% of them in 2022. CFIB calls on government to support small businesses, including tax cuts.
“Quebec is the province with the highest payroll taxes in Canada,” added Mr. Vincent.