Blog Post by Chantel Tesolin
Woe is the current retail world for small businesses. From shifting political landscapes to heightened market competition, small businesses feel every bump in Canada’s changing economic climate. Small business is the backbone of Canada’s economy. Did you know that of all businesses in Canada, 98% are small businesses?1 But in 2024, there was a monthly rate of 5.0% of business closures, the highest it’s been since 2020.2 Unfortunately, we’ve seen these effects in Streetsville as well, as there have been a significant number of closures within the past two and a half years. Andrew Tesolin, Manager of the Streetsville bike store Via Ciclante, states that, “rising costs, shifting demand, and constant uncertainty have taken their toll. Sadly, I’ve seen some of my peers close their doors.” So, why the back pain? Let’s dive deeper into why your business might be struggling. Here are some of the major factors why it seems like shop owners never see the ‘busy’ put in ‘business’.
First off, let’s talk about the labor market. Our trusty source, CFIB, states that vacancy rates for business employment positions have dipped, lowering from 3.7% to 2.9% in 2025. However, 57% of small businesses report a disconnect between what candidates expect in terms of pay and what the business is offering.3 Businesses and employees may align on paper, but shortcomings in employees’ hands-on training cause a mismatch between the job’s description and its practical demands. But, as Mrs. Doubtfire wisely said, ‘Help is on the way, dear!’. It’s a bird, it’s a plane, no, it’s the Ontario government with a grant program! Ontario has a Canada-Ontario Job Grant that allows employers to apply for funding to train their employees and new hires to update their skills, so that you can find the employee that is the metaphorical peanut butter to your business’s jelly.4
Alright! Let’s move to factor number 2, shall we? We all enjoy the flexibility of working from home. Over the past five years, there’s been an increase in WFH opportunities, with many voicing out their approval on the pros this option offers. But, while your home might make you feel snug as a bug in a rug, small business owners’ are facing “snug” pockets. Indeed, downtown commercial strips are reporting higher vacancy rates due to the post-pandemic work-from-home culture and reduced customer flow as a result.5 Tesolin states that, “since the pandemic, we have seen less foot traffic”. Who knew people’s bunny slippers would breed a litter of dust bunnies on business’s shelves?
Factor number 3 – Red, white, blue, and tariffs. Can you guess what country will be the next victim of my critique? The current US-Canada trade war isn’t small businesses’ first rodeo, but it’s certainly a new one. The US’s actions have not been much of a yeehaw for Canadian business, and they certainly didn’t hold their horses on imposing a new 35% blanket tariff last week on goods that don’t comply with USMCA, taking effect August 1st.6 The trade war is exactly what small businesses didn’t need, as the tariff on Canadian goods reduces American demand for Canadian products and their corresponding market share. To pile on the fun, retaliatory Canadian tariffs cause Canadian businesses to face higher operational costs, leading to either lower profit margins or higher consumer prices. Neither of which is optimal for business success. Decreased Canadian exports lead to a worsened trade balance (a.k.a. when there’s more what IN tarnation than what OUT tarnation) for Canada, causing a depreciation of the Canadian dollar. The weakened dollar contributes to higher prices and a lack of consumer spending.7 Tesolin says that, “to stay competitive, we’re actively seeking to source products from non-US-based suppliers and have ordered products directly from Taiwan, the UK, and other European countries …[to] ensure our customers are not paying these tariffs”. This cost of market diversification is yet another downside of the trade war. However, Canadian businesses have one lucky horseshoe yet, and that’s the federal Duties Relief Program. For any businesses that wish to be small distributors, the DRP allows them to import goods without paying duties, as long as they are later exported.8 Put ‘er there, business pardner!
Lastly, but sadly not least, greater trends in market competition have led to the overall decline in small businesses. The opening of big box stores – or should I say, Pandora’s box – creates more issues for small businesses. With the use of everyday low prices, they’ve dictated supply chains and trained Canadian shoppers to expect more for less. Big box stores provide convenience in the form of longer hours of operation, one-stop shopping, and free parking. Additionally, digital big box stores allow consumers to have instant access to product information, adding to this aforementioned idea of convenience.9 However, it’s not all doom and gloom for small biz, as small retailers have one thing that big box stores can’t replicate: heart. Small businesses possess quality over quantity through personalized service, adaptability, and community. In Andrew’s case, stores such as Canadian Tire limit his ability to compete in price in the entry-level bicycle market, so he, “offers specialized bike fitting services that these bigger stores do not”. This is where BIAs step in. Indeed, BIAs focus on enhancing and maintaining their neighborhoods to create quality destinations where visitors can “Shop, Dine, Visit.” The Streetsville BIA offers a variety of initiatives – from marketing and social media to events and beyond – designed to boost both the online and in-person presence of our businesses. For instance, the SBIA’s signature events draw large crowds and increase foot traffic, giving local businesses a valuable opportunity to thrive. As Streetsville BIA General Manager, Barsha T., explains, “We’re always encouraging our businesses to make the most of the increased foot traffic, whether by participating in our events and initiatives or by offering special incentives to attract visitors.” Does your business do anything special to try to get Jack out of the box and into the small business?
There’s no doubt that running a small business is a stressful task – kind of like baking a soufflé – with a multitude of factors that work against small business owners in today’s world. But taking advantage of the BIA’s initiatives and accessing available government programs can be your business’s fairy godmother. The secret recipe for your soufflé’s success is a little effort, love, and a strong business community to support you. And with the right ingredients, your business can rise.
References:
2. https://www150.statcan.gc.ca/n1/daily-quotidien/240926/dq240926b-eng.htm
4. https://www.ontario.ca/page/canada-ontario-job-grant-cojg
5. https://obiaa.com/news/can-canadian-downtowns-find-new-purpose-in-a-post-office-era/
6. https://www.politico.com/news/2025/07/10/trump-slaps-new-35-percent-tariff-on-canada-00448192
7. https://www.bankofcanada.ca/publications/mpr/mpr-2025-01-29/in-focus-1/
8. https://www.cbsa-asfc.gc.ca/import/ddr-red/relief-report-eng.html