Despite significant obstacles, rural and small-town businesses are growing and their owners are optimistic about the year ahead, says a survey from Statistics Canada.
The fourth quarter of 2024 presented business owners with cost-related challenges from rising prices, Canada’s sinking dollar, and steep competition for workers.
Heading into 2025, the top concern for rural and small-town business was inflation. About 40 per cent of Canadian said rising input costs for labour, energy, and raw materials were a major obstacle, and the price of insurance, interest rates, and debt costs also stood out as anticipated financial pressures.
Though many rural businesses expect a dip in income and cash reserves, 75 per cent said they are “somewhat or very optimistic about their outlook over the next 12 months.” And their optimism is buttressed by some promising statistics.
Employment levels inched upwards in rural areas last quarter, while the national unemployment rate was stuck at over four per cent. Three-quarters of rural and small-town businesses reported having “sufficient cash or liquid assets to maintain operations in the short term,” even though they’d been affected by high interest rates in the last year.
The level of optimism among different sectors also hints at shifting strengths in rural economies.
Among the most confident respondents to the StatsCan survey were businesses in the professional, scientific and technical services, with 92 per cent saying they were somewhat or very optimistic. Only about a quarter of rural and small-town businesses in construction and retail shared this rosy vision of the year ahead.
Kelly Harris-Martin, general manager at Community Futures Tawatina Region, which supports small-town business owners and entrepreneurs, said there has been a noticeable increase in the number of people starting a new business.
The Tawatina region encompasses Athabasca, Westlock, Sturgeon County, and dozens of other communities.
Local entrepreneurs would likely share concerns about rising costs, Harris-Martin said, but these hurdles have encouraged people to start small rather than shelving their ideas altogether.
“People are saying, we're just going to dip our toe in a little bit, and we're going to go for that smaller expansion. Instead of opening up a 10,000-square-foot operation, maybe we're going to try starting off with just 2,500 square feet and see where that goes,” she explained.
Harris-Martin said the last year has seen more start-up activity compared to the cautious atmosphere of the early pandemic period, and signs of the rebound can be seen across multiple sectors.
“I think the appetite is coming back a bit. I just think that maybe the appetite has been scaled a little bit to reflect the current economic conditions that we're seeing.”
