Small Businesses Face Construction Destruction

Small business is offering some constructive advice to municipalities. A new report from the Canadian Federation of Independent Business (CFIB) is calling on municipalities to compensate businesses beaten up by infrastructure projects and major projects.

The new national report had its genesis in complaints from businesses in downtown Halifax decimated by adjacent infrastructure upgrades and major developments. In the summer of 2016, CFIB hired a Dalhousie planning student to look find best practices used by cities around the world to manage these issues. Those findings led to a broader survey of Canadian businesses to understand the scope of the problem. The results weren’t pretty.

Construction mitigation

The research found since 2012, 41 per cent of small business owners have been affected by nearby construction projects, with five per cent affected in a major way. Nearly half (46 per cent) of respondents affected by such construction said their sales had declined, almost one in four (23 per cent) experienced a significant level of stress, and more than one in five (21 per cent) had to draw on personal or business savings. Seven per cent even considered closing or relocating their business.

The Halifax debacle is not unique. Most Canadian cities don’t have appropriate construction mitigation programs and the situation is literally leaving small businesses in the dust. The report showed fully seven out of 10 businesses are dissatisfied with how governments deal with the negative impacts of these projects.

While Halifax did respond in 2017 with a much better construction site management plan, there are other recommendations which would provide a more comprehensive approach.

CFIB is asking for five key components.

  • A compensation program to assist businesses taking major hits over an extended period.
  • A “no surprise” rule to ensure fair warning to local business so they can properly prepare
  • A comprehensive planning or “one dig” approach to avoiding multiple disruptions.
  • An improved contracting process including with integrated mitigation provisions and a bonus/penalty system, especially for early/late completion of the project.
  • A dedicated business liaison office with managerial authority to improve direct communication with affected businesses

Construction is a serious problem for thousands of local business operators who need to see more action around this file, especially in the next few months. With the upcoming Federation of Canadian Municipalities’ annual conference in Halifax, it would be a good opportunity for HRM to show leadership.

Billions will be spent in infrastructure upgrades in the city and around the province in the years ahead. Small businesses are supportive of these improvements and make contributions vital to the fabric of our communities.  Municipalities must be aware of and take responsibility for some of the undue hardships of necessary growth. By taking action now, municipalities can show they value their small businesses by not accepting this collateral damage is just part of the process.

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