Nearly seven in 10 (68%) small businesses have experienced disruptions due to local construction projects in the past five years, marking a 27% increase since 2018, finds a new report released Tuesday by the Canadian Federation of Independent Business (CFIB) titled Hard hats and hard times: Public construction impacts on small businesses.
Of those affected, 22% report these disruptions have had a major impact on their business, which equates to 266,953 SMEs across the country. When public construction projects extend beyond their established timelines, it prolongs the impact of these disruptions. On average, small firms endured 508 days of construction-related disruptions over the past five years, said the national organization.
“Small businesses face a myriad of issues when local construction projects take place, from traffic congestion and dust and debris, to losing customers and navigating logistical disruptions,” said Emily Boston, Senior Policy Analyst at CFIB and report co-author. “Now, imagine dealing with it for over 500 days! Sadly, this is a reality for too many small businesses across Canada.
“We’re not asking governments to stop upgrading roads or repairing sewers. Public infrastructure projects are important, but when they drag on for years, it’s difficult for businesses to survive in the meantime. A large portion of construction costs can be avoided with better planning, execution, and by giving more consideration to the reality of local businesses.
“All too often it seems as though levels of government punt the responsibilities of construction projects back and forth. There needs to be a clear directive as to who is responsible for the construction mitigation of projects and what mitigation tools will be used. Improving how construction projects are handled would benefit local businesses, municipalities, provincial governments and citizens alike.”
The CFIB said small firms lost on average 22% of their revenues during the most significant construction project affecting them over the past five years and on top of that, spent around $10,000 in extra expenses such as cleaning and repairs.
“While each construction project is unique in its duration, scale and disruptiveness, the most common issues affecting 58% of businesses are traffic congestion, dust, debris, and noise. Customers and staff having trouble accessing their business or finding parking (49%), significant stress (23%) and lack of notice (33%) also impact small businesses in construction zones,” it said.
“Over two-thirds of businesses (68%) say they should be compensated by government when a public construction project has a major impact on their business operations. CFIB urges governments to support small businesses during periods of major construction by establishing comprehensive construction mitigation plans, which include funding to offset costs for impacted businesses, improved planning and communication strategies, and more clarification on how each level of government will be involved. ”
