Current Economic Hardship Threaten Survival of Immigrant-Owned Businesses

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Local immigrant-owned and operated businesses work longer hours despite extensive family commitments, yet they make less revenue than Canadian-owned and operated businesses. What impacts these businesses, and what do business experts advise to ease the pressures? 

Ritu Khanna, Executive Director at the South Surrey and White Rock Chamber of Commerce, has seen this impact first-hand. Khanna states that her conversations with local businesses reveal “they have less revenue to pay their staff and other business expenses. Owners welcome customers rather than the staff they hire, yet (they) take less money home for their families”, she says.  

Khanna reveals that the chamber supports businesses by hosting virtual and town hall events to provide business information. To iterate on the importance of assisting local businesses, she says, “everyone needed to pivot [during the pandemic], and those businesses accommodated the major changes like the number of people allowed in their establishments.” At the time of writing this article, there is a four-person limit at D Roti Shak, a Trinidadian-owned and operated restaurant in New Westminster, British Columbia, due to the COVID-19 pandemic. 

Lindsay Meredith, professor emeritus at the Beedie School of Business at Simon Fraser University (SFU), says he expects a dip in the first and second quarters following another COVID hit with the new XBB 1.5 Omicron subvariant. “It could destroy a restaurant or a huge Indo-Canadian function,” says Meredith. He indicated that most businesses seriously impacted are small immigrant-owned and operated companies, and there is a supply and demand issue. “They are sourcing [raw materials] from overseas [and] it leads to problems as you are paying more [as] prices go up,” he says. “A mild recession hurts middle-class Canadians and new immigrants, making life unaffordable.” 

Figures released by Statistics Canada show the primary cause of recent business failures. It states that 60.6 per cent of immigrant majority-owned businesses blame rising inflation caused by the Bank of Canada’s interest rate hike, which means less business and a decrease in revenue, and 52.2 per cent further blame increasing costs of goods and services. Additionally, 39 per cent of immigrant-owned companies indicate that transportation costs impact the supply chain and the delivery of goods and services to retailers.  

Frederic Norry, the owner of Leon’s café, originally from Brussels, Belgium, said, “prices jumped due to rising costs and everything after COVID.” Norry, who has been in Canada for 30 years and in operation for one year and a half, remains steadfast despite being unable to pay himself sometimes. He has not changed his business practices because he wants to offer something different and unique, “I do it because I love it; I import my cheese from Belgium”, he says proudly.   

The analysis conducted by Statistics Canada indicated that 19.8 per cent of businesses majority-owned by immigrants and 20 per cent of majority businesses owned by racialized persons are to expect a decrease over the next three months, along with 18.4 per cent of all private sector businesses.  

Elizabeth Model, CEO of Downtown Surrey Business Improvement Association, shares that many business owners have reset or paused their businesses. “The inflation rate hasn’t been this high since the 90s, and the Bank of Canada will raise rates, according to economists,” she said. However, Model sees some positive signs that the economy is recovering. With restrictions lifted on air travel, the travel industry is gearing up; and the gaming industry is picking up with people using their personal computers.   

Model adds, “(although some) immigrant-owned businesses are going down, we have some great businesses, and shops like hair stores that are ethnically and culturally diverse due to catering to the market, and they will do their very best as they have put their life savings into it”.  

Marshall Ma, the owner of Chicko Chicken, a local franchisee in White Rock, B.C., opened his first business in November 2021, a Korean-run fast food chain in British Columbia and Alberta. He feels optimistic and says, “the bad time has passed. Last year, the price for canola oil was high (by) 47 cents, but now it is dropping a little bit (by) 45 cents”. Speaking from his restaurant in White Rock, he states that since Chicko Chicken is a franchise, he can’t increase the price. Ma says, “I work almost daily because I don’t [like to] lose money.” 

Christina Santini, a senior policy analyst at the Canadian Federation of Business (CFIB), feels businesses can get the help they need. She says 70 per cent of companies have loans which increase their debt. She also shares that as of April 1, 2023, there will be an increase in taxes on carbon from three cents per litre to 14 cents, and alcohol taxes will rise by 6.3 per cent. “What the government can do is delay the taxes as we are coming out of a lockdown,” she recommends. “Businesses are making less profit, and sales are going down.” Santini points to the precarious position many Canadian businesses find themselves in, with 50 per cent incurring a debt of $116,000.  

“(although some) immigrant-owned businesses are going down, we have some great businesses, and shops like hair stores that are ethnically and culturally diverse due to catering to the market, and they will do their very best as they have put their life savings into it”

Elizabeth Model, CEO of Downtown Surrey Business Improvement Association

She states that the Canada Emergency Business Account (CEBA) debt payments are due in December 2023. The CFIB wants to lobby the government to extend the deadline for another year for small businesses. Santini feels businesses have had difficulty, pointing to significant gaps of unfilled job vacancies in retail, hospitality, and construction and general labour shortages. CFIB pressures the government to help and believes businesses need help navigating and connecting to the proper resources. Santini believes more work must be done to help companies to survive the current economic hardship. 

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