In August, entrepreneur Craig Enman opened Distinctive Decor's Treasure Hut at the Confederation Court Mall in Charlottetown. This new retail venture arrives as Statistics Canada reports a contraction in the number of active businesses across the country.
A 400-business dip across Canada signals a cooling market
The Canadian small business landscape is currently navigating what the Canadian Federation of Independent Business (CFIB) calls an "entrepreneurial drought." According to Statistics Canada data, the number of active businesses across Canada fell by 400 in July, landing at 937,821. This decline was driven by a drop in new openings and a simultaneous rise in business closures.
In Prince Edward Island, the contraction was also evident. The source reports that active businesses in the province dipped from 4,195 in June to 4,182 in July. During this period, new openings in PEI fell from 228 to 217, while closures increased from 218 to 226. This pattern suggests a tightening market where the rate of exit is beginning to outpace the rate of entry.
Why commercial taxes and trade tensions squeeze PEI owners
Operating a brick-and-mortar storefront in the Atlantic region involves navigating a complex web of rising expenses. Frederic Gionet, the CFIB's Atlantic director, explains that the cost of doing business has climbed substantially, exacerbated by volatile energy prices and uncertainty in the Canada-U.S. trade relationship.
Beyond trade, local taxation presents a massive hurdle for small retailers.. Gionet notes that commercial property taxes in parts of the region can be two to three times higher than residential rates for similar properties. For the smallest businesses, these tax bills can represent more than 10 per cent of their total operating expenses. When combined with the rising costs of labor, permits, and licenses, many owners find themselves forced to pass these expenses on to consumers who are already struggling with the cost of living.
The 63% of owners planning to exit within a decade
The long-term outlook for Canadian entrepreneurship appears increasingly precarious . A CFIB report released on October 22 found that 63 per cent of small business owners in Canada plan to end their operations within the next ten years .
The motivations for this mass exit are varied. while 78 per cent of these owners are looking toward retirement, 21 per cent are motivated by burnout or stress, and 20 per cent point to high operating costs as the primary driver. This data suggests that the cumulative impact of the pandemic and subsequent inflation is pushing many long-term owners to the breaking point.
Can Distinctive Decor's Treasure Hut survive the Amazon effect?
For Craig Enman, opening his shop in Charlottetown is a personal mission to return to the industry he loves. Enman, who also works as an architectural technologist, previously operated a silver and gemstone jewellery business in Nova Scotia for 15 years. He was ultimately forced to close those locations due to the shifting shopping habits of consumers and intense competition from major retailers like Walmart and Amazon.
While Enman notes that sales for his new collection of fine porcelain and antiques have been steady, his success remains an unproven variable in a difficult economy. it remains to be seen whether the "shop local" movement can provide enough of a buffer against the "belt-tightening" consumers are performing. Additionally, it is unclear if Enman's new shop will be able to maintain its margins as the costs of labor and commercial space continue to climb.
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