This week Alberta went from having six of the top 10 entrepreneurial cities in the country to only one in the top 25.
According to the Canadian Federation of Independent Business, the decline is due to low levels of optimism among the province’s business owners.
The 2016 Entrepreneurial Communities report is the ninth annual look at which cities best enable entrepreneurs and small businesses to start, grow and prosper. It assesses 121 of the country’s most populated municipalities based on business presence, perspective and local government policy.
For the first time in five years the top-ranking city is not the grouping of communities that surround Calgary. Instead, Kelowna takes the top spot and the Calgary periphery becomes the only area in the province that made the top 25.
The Edmonton periphery, which has placed in the top 10 for the past six years, dropped 39 spots in 2016 – from eighth to 47th – despite supportive municipal governments and a strong business presence.
“It’s important to point out that the change in the rankings or Alberta’s cities compared to last year is not due to any major policy changes by municipal governments, but can largely be attributed to the dismal outlook of our province’s entrepreneurs,” said Amber Ruddy, director of provincial affairs, Alberta with CFIB.
The province is experiencing one of the worst recessions in 30 years and confidence has “clearly been shaken” said Ruddy.
In fact, the report recorded the lowest levels of optimism in nearly a decade, with seventy per cent of businesses in the province reporting insufficient demand for their product and one in four are planning layoffs within the next three months.
But there’s more than low oil prices to blame, says St. Albert and District Chamber of Commerce president and CEO, Lynda Moffat.
Wage and regulatory pressures caused by increases to minimum wage and the implementation of a carbon tax are also creating a bleak outlook for the future.
While the results of the CFIB’s report were disappointing, they were not at all surprising said Moffat.
“It’s hard to be optimistic and confident about future growth when you see policies that are hurting you coming down the line,” she said.
Dar Schwanbeck, managing director of the St. Albert-based Northern Alberta Business Incubator, still believes that the Edmonton region is a great place to start, grow and prosper a business, but says businesses need to do more to ensure they are resilient to changes in commodity prices.
“A large majority of small businesses have not asked the ‘what if oil prices do not recover’ question. I call this the oil price hangover,” he said.