Canada’s 2022 Labor Shortages Cost Independent Businesses $38 Billion in Lost Revenue

According to a new report by the Canadian Federation of Independent Business (CFIB) reviewed by Ontario Construction News (12-4-23), small businesses in the province missed out on over $16 billion (CAD) in revenue opportunities in 2022 because they had to turn away contracts or sales due to a labor shortage. The CFIB says Ontario led all provinces and territories in this category, with Quebec coming in second place at over $8 billion.

According to the CFIB report, Ontario small businesses turned down sales or contracts (25%); postponed the timing of existing contracts (18%); and cancelled or deferred business investment/expansion plans (20%). In addition, business owners (51%) and employees (37%) worked more hours to make up for the shortages. Of the $16 billion dollars lost in Ontario, the construction sector reported the largest losses at more than $9.6 billion in 2022.

According to Ontario Construction News, CFIB economist Laure-Anna Bomal wrote in the report:

“We always knew labor shortages came at a high price to small businesses. Staffing challenges cause employers to work more hours, reduce their hours of operation, and decline services and contracts simply because they can’t find enough staff to fully operate their business. In fact, we estimate the business opportunities that small businesses lost in just one year due to labor shortages are worth over $38 billion [nationwide].

While it doesn’t necessarily mean the Canadian economy lost the same amount, it’s still a significant share of revenue that small businesses could have used to invest in automation or growing their business.”